“Apple charges too much for its products.”
“Apple‘s not THAT much better in terms of functionality, no matter how slick the outer design may be.”
“Apple’s biggest cash cow isn’t impressive for a technology company — it’s more about a business model than actually inventing new things.”
“Apple is a closed system. They insist that you play their game for both hardware and software.”
[Apparently I didn't make it clear enough in the first go-round of this that these things are what Apple's detractors say.]
Oh-by-the-way, Apple just posted terrific quarterly returns. If you had had the foresight to buy $1,000 of Apple stock at the start of 2005, it would be worth $6,184 as I write this. (Over the same period, $1,000 invested in the S&P 500 would have turned into $901.)
The best quote from that Dow Jones story (just linked) on Apple’s great quarter:
“What it confirms to us is Apple’s proprietary competitive advantages and that customers value Apple products greatly and believe its premium is more than justified,” [Kaufman Brothers analyst Shaw] Wu said.
As a result, analysts are hesitant to transfer Apple’s strong numbers to other electronic makers.
Durn tootin’. Apple’s not a bellwether for other companies; it’s a company that makes its own weather.
Consider that this is true even in the face of an economy that has stymied many consumer brands.
[The detractors can cry about Apple's prices etc. all they like. I'm sure Apple doesn't mind.]
Now, what if we all set aside our complaints about how bad the economy is, about how we can’t be expected to compete toe-to-toe with Company X, about how our industries are different from Apple’s (or Amazon’s, or Cisco’s, et al.) . . . and then we set about the task of making our companies into businesses for which an Apple-like premium is justified?
What would happen then?
~
ADDENDUM: Here’s a story on the same theme from a different industry:
The money quote:
What’s Meredith’s secret to surviving and thriving in such a tough environment?
Patrick Taylor, also of Meredith Corporation, says these titles “do a good job of building their brand” — especially on the Internet.
He says that by creating and maintaining easy-to-use websites, magazines create more exposure to their title. At the same time, they open up another avenue for ads and ways to sign up subscribers.
Simple, right?
~
UPDATE, an hour later: Early comments made it clear that the first version of this was overly subtle, so I added the sentences within brackets, plus quotation marks around the title and opening lines.
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6 Comments so far
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So, um, do you not like Apple? Or want all companies to be like Apple? Apple charges too much for a not-as-good product, but that’s a good business strategy?
Next time you make a provocative headline, you might want to figure out what your point is first.
I like Apple just fine, ryanshow. And I did make my point, right there at the end.
Apple charges an appropriate amount — i.e. what a healthy slice of the market will bear — for a plenty-good-enough set of products that are part of a killer business model. And that is, very clearly, a good business strategy.
My mistake: not making it clearer in the first iteration that the headline and opening objections were offered tongue-in-cheek. These are some of the standard objections to Apple made by its detractors. I fixed it to make the point clearer.
Much better. Thanks for clearing that up — the quotes seemed like they were real and not outlandish enough to be satire. Didn’t mean to sound so rude, but I was really just confused.
I do agree with you about the final point. Apple has an awesome strategy, and hardly anyone is following it. Steve Jobs has a vision and makes the company around it. Everyone else is just chasing the dollar bills in the wind.
Always glad when I can make things clearer, ryanshow.
The downside for Apple is simple, and centers around a question that’s been asked a million times: What happens AFTER Jobs?
I love lines like the one about Apple’s technology being unimpressive, or not being about “inventing new things.” Somebody tell Professor Gadget that there’s innovation on the business side as well as in engineering. The fact that it’s not a new widget doesn’t make it any less innovative.
If Jobs left tomorrow – what would happen if Mark Hurd took his place? Now that would be interesting…
Thanks for the comment, Russ. My friend Renee Hopkins, who writes about innovation all the time, holds that MOST good business innovation comes through innovation in business processes, rather than patent-style technological innovation.
As for your Jobs/Hurd question: my gut reaction is that Hurd would be smart enough to know that being the CEO of Apple would be a lousy fit for him.