
What’s Apple’s competitive edge going forward? - wslh
http://blogs.harvard.edu/philg/2016/01/26/whats-apples-competitive-edge-going-forward/
======
josephpmay
Apple's major competitive edge right now is supply chain and economies of
scale. They are able to source materials far better than basically anybody
else. This has always been Tim Cook's strong suite.

Another competitive edge is chip design. Apple's A9x has a custom PowerVR
implementation that blows its competitors out of the water in terms of power
and efficiency. They seem to be consistently ahead in this regard.

Apple's major R&D investments right now are in Music, VR/AR, and the car
project. They're working on some cool things in music that I can't talk about,
but IMO music is too small of a market with too small margins, and Apple is
putting way too much effort into it. Apple has made some really good VR/AR
hires, but Facebook, Microsoft, and Alphabet have better teams. Who knows how
the car project will turn out.

Apple is currently investing more in R&D than they ever have before. This
scares me because their successful projects have almost always been on the
thin side investment wise. Apple has traditionally launched products with the
bare minimum of features and built up from there. People hate them for it, but
it works. I hope they're not moving to a more monolithic model.

Lastly, Apple seems to have had a collapse in quality in the past year or so,
especially with phones. This is anecdotal as I haven't seen any actual data on
it, but I know so many people who have gone through numerous iPhones (for the
most part 6s's and 6s Pluses) that have had one problem after another. I've
been pretty lucky, but I have a 6, not a 6s. My previous 5s, however, barely
lasted a year.

~~~
Nr7
Supply chain was one of Nokia's competitive edges when they were big and it
didn't do much good to them in the end.

~~~
nodamage
Absolutely. Supply chain doesn't mean anything if no one wants your products
anymore.

------
tim333
Apple's competitive edge going forward is probably much the same as it's been
in the recent past - well designed products, strong brand, high profits
through premium sales and economies of scale keeping costs down. I'm not sure
that much has changed.

Their sales may have levelled but they are pretty profitable. News from summer
15:

>Apple Inc. recorded 92% of the total operating income from the world’s eight
top smartphone makers in the first quarter, up from 65% a year earlier

With Samsung being the other profitable company. Since then:

>Tim Cook, Apple’s CEO said in a statement. "Our revenue grew 30 percent over
last year to $74.6 billion

and:

>Samsung Electronics warned that its profits could fall again this year, as it
announced a 19 per cent fall in net profit for 2015. The drop was largely
driven by a 31 per cent operating profit decline for its IT & Mobile division
– dominated by the mobile phone business, which has continued to lose market
share to Chinese rivals

Which suggests Apple may be making over 100% of phone industry profits. Not a
bad competitive position.

------
jevgeni
Let me rephrase the title: "What Might Apple's Competitive Edge Be In The
Future?"

Abstract: A guy fuels the brand war using a "harvard.edu" domain, some hand
wavy anecdotes, and ugly English.

------
dijit
reading the topic and not the article, my gut feeling is high quality
products, whether it be phones or laptops. But, -especially- laptops.

I've been looking for a replacement for my x201 thinkpad for about two years,
for me, it's the last high quality laptop that exists with linux support.
Taking OSX is fine because it's widely used and has a POSIX backend/bash/etc

So, if you want high quality hardware and a POSIX OS then OSX/Apple is
definitely where you go.

and it runs linux better than most laptops /anyway/.

~~~
dagw
A related aspect of this is that Apple focuses on just a handful of models
while companies like HP and Dell seem to have hundreds, making it even harder
to choose.

Let's say I read that the HP Xbook 2788Q is the greatest laptop ever and has
perfect Linux support, and want to buy one. First of all since HP has so many
different laptops, finding a store that actually carries a particular HP
laptop is very tricky so it's basically impossible to get a hands on look at
the laptop before buying. Then it turns out that HP doesn't sell the Xbook
2788Q in my country, they sell the (visually similar) 2789P instead. Are there
any major differences? Is the reviews for the 2788P relevant? There's no easy
way to tell, making it very difficult to compare and buy laptops.

Apple makes it easy, a MacBook is a MacBook all around the world so I know
exactly what I'm getting.

~~~
wwkeyboard
I think that simplicity of their product line drives some of the corporate
sales as well. If I tell some random IT department to get a macbook, there is
only so bad of a machine they will pick for me. HP, Lenovo, and Dell have some
really shoddy machines at their cheap end. At a startup you can specify
exactly what model you get, but when it's a large IT department saying
"generic windows machine" is much more of a risk than asking for "a mac".

~~~
dagw
_HP, Lenovo, and Dell have some really shoddy machines at their cheap end._

Which is another problem as well. Everybody has plenty of experience with
terrible machines from HP/Lenovo/Dell making it more difficult to accept that
this particular machine might actually be awesome. Almost no one has used a
terrible Apple computer.

------
tluyben2
TL;DR laptops have been hit/miss for me but phones/tablets are miles ahead.

I am no Apple fan per se; I loved their laptops but I got burnt; I forgot the
English/American term for it; monday laptop or something I think it is?

The best laptops I had before Apple were Fujitsu... And the warranty. US/EU
companies should be so ashamed. For not paying more they would get the laptop
from my home and give me a new one mostly, no questions asked. Dropped, water
damage, whatever. They still do that for company laptops but they are not so
interesting anymore. They were then (8 years ago?) for me, especially the
P1510/20 series. Panasonic took that over but they are a lot more expensive.
My last P1510 works fine still. Brilliant stuff. Anyway.

After that;

My first 2 Macbooks were magic. I dropped an entire pot of tea on my 2nd one;
it was before the moist sensors and it was under warranty so they replaced it.
Very nice. While it was in 'repair' I needed to work; I bought a Macbook Pro
and it was horrible. I got the old Macbook back and the Pro which should be
faster was slower. Brought both to Apple (in Amsterdam) and they said it had
something to do with my software. Yeah. VIM. It's super heavy. Very nasty
experience. Battery life on the Pro was not there either but they couldn't
find anything so I had to suck it up.

I bought an Air 11 inch. What a GREAT machine. Excellent battery life (I USE
VIM 90% OF THE DAY FFS), light, looks good.

A friend told me the Macbook pro is excellent. So I gave the Air away to a
friend and bought a kitted out Pro. The misery. No battery life and it was
slow with max mem and cpu. Slower than the Air on everything. Again; Apple
says it isn't. I won't mention Vim again.

Having said all that; smartphones. I want to use Android. I want to believe in
Android and Android phones. I have tried all top phones for Android. But no,
it doesn't work; iPhone really feels so much better. And tablets there is no
comparison; iPad wins hands down. The MS stuff starts to get somewhere but i'm
not using tablets for productivity as it still feels annoying and without
productivity iPad really feels so nice. Maybe it happens (I'm trying) one day.

When I leave home on long trips I bring an iPhone, iPad and Lenovo X220 (18
hours battery). There is currently nothing that works better for me.

Edit: X220 is with Ubuntu; I cannot get into Windows for the past 33 years; I
went from Basic -> CP/M -> MS DOS (very shortly) -> Unix (forgot the flavor)
-> SunOS/Solaris -> Linux; Windows feels distinctly alien. It is not hatred or
anything else than that I really cannot into it or see how I could work
efficiently with it.

~~~
coldtea
> _I bought a Macbook Pro and it was horrible. I got the old Macbook back and
> the Pro which should be faster was slower. Brought both to Apple (in
> Amsterdam) and they said it had something to do with my software. Yeah. VIM.
> It 's super heavy. Very nasty experience. Battery life on the Pro was not
> there either but they couldn't find anything so I had to suck it up._

Are you implying there was some hardware reason your Macbook Pro was slower
than an older Macbook?

And contrary to all CPU/HD/Memory specs and benchmarks and reviews for the
respective models?

I'd be surprise if it was not software related.

And while you might "only" use Vim, that doesn't mean much. I'm pretty sure
you also browse, check email and do other things, so you do use many apps, Vim
is just what you use most frequently.

In any case, all it takes is a single rogue app to make a machine crawl --
some haxie you installed that provides some third party functionality but
don't consider an app you use because you don't interact with it, or even
Spotlight with a corrupted index.

> _A friend told me the Macbook pro is excellent. So I gave the Air away to a
> friend and bought a kitted out Pro. The misery. No battery life and it was
> slow with max mem and cpu. Slower than the Air on everything. Again; Apple
> says it isn 't. I won't mention Vim again._

It's not just Apple saying those machines are faster.

I can't understand how a developer (since you use Vim) can make such
statements. It's not very difficult to compare the specs of the baseline
configurations of the two models.

I've done heavy graphics, 3D, 4K video editing and DAW work on Macbook Pros
and Airs -- while recent Airs are decent, there's simply no comparison. And
it's trivial to show it in all kinds of benchmarks and tests.

~~~
tluyben2
First; I run the same software on all my computers for around 15+ years; some
libraries etc have been added ofcourse but basically I develop with vim in
python, c#, java, c/c++, haskell, haxe, ruby, perl, php etc and the Chrome
browser since it was out. The software on the Air would be completely
identical to the software on the Pro. So not sure how it can be 'my' software;
it's software for sure, but what I don't know.

I am making statements of what I observed. If benchmarks show that the Pro is
faster but _to me_ it feels slower would that matter to me? Not really. I do
not do 3d work or video editing and maybe it is faster in that; to _me_ while
coding it just does not feel as snappy and I can just show the beach ball to
you on the pro while I have never even seen it on the air during work.

But that is nothing compared to the battery life; this is not subjective; I
just get a few hours out of my macbook pro's battery while, again with the
same config, my air did basically all day (6-8 hrs) and my x220 does 12-13
hours. OpenPandora does an easy 10 hours. The 2015 pro is _by far_ the worst I
have while for me battery life is more important than speed. I really don't
need speed for what I do even while devving games (2d).

Whatever the issue; I will never buy that again; Apple did do nothing to help
even though I showed them, in person, the issues. I might buy an air again
though ; especially if the battery life improves to 12+ hrs.

~~~
coldtea
> _First; I run the same software on all my computers for around 15+ years;
> some libraries etc have been added ofcourse but basically I develop with vim
> in python, c#, java, c /c++, haskell, haxe, ruby, perl, php etc and the
> Chrome browser since it was out._

So, clearly, unless you SSH, you also install all kinds of stuff to support
those languages (compilers, runtimes, linters, the whole of cabal, etc).

> _I do not do 3d work or video editing and maybe it is faster in that; to me
> while coding it just does not feel as snappy and I can just show the beach
> ball to you on the pro while I have never even seen it on the air during
> work._

Well, I'm a coder too, and I use Vim too (also ST3, Eclipse, XCode and Idea
for different stuff) and I've never seen the beach ball while coding with vim
on my MacBook Pro. So what now?

In any case, I don't think a support team in a company is the one to solve
such software issues. They are just some random guys (not even CS degrees)
with general knowledge of computers, that mostly run through "customer
service" scripts.

Given that it's 100% a software issue (and not e.g. a faulty HD causing
slowdowns), the best way for someone who is a programmer is to go down and
trace the root cause themselves. Try booting from another drive. Run dtrace
(or what's called on the Mac). Check Activity Monitor. Etc.

Whenever I have such issues, on OS X, Windows or Linux it's just a hour or so
to find the culprit. At worst, a day, after you already have a strong clue.

The battery life seems to be of the same origin. Increased CPU usage depletes
the battery faster. I get 6-7 hours from my MBP, with Chrome and programming
and mail and stuff going on, and it's a 2 year old machine.

------
leonatan
The author mentions one thing which perplexes me. Do Not Disturb turns off
automatically every morning, eve if I manually enable it during negotiations
the day. His example makes no sense.

~~~
hatsix
Yeah, that's scheduled mode, not the default 'Manual' mode.

------
MaysonL
Throw out the iPhone business. Value it at $0. What is the P.E. ratio of the
whole company, taking only the non-iphone profit into account? ABOUT 30!

------
melted
>> My iPhone 6 Plus became unstable in its 6th month of life

Take it to the store, you dummy. People are so used to the complete lack of
customer service from everybody else that this doesn't occur to them.

The whole point of paying more for Apple stuff is that they make and sell high
quality gear. On the rare occasion when there's a quality issue, you just take
it to the store and they fix it right there and then, or if it can't be fixed
there, in 2-3 days.

As to what the advantage is, they're the only ones that know how to make easy
to use, high quality computing devices. They could easily go for the
marketshare, but that's not the game they choose to play. They choose to own
the profits, not market share. Perhaps an old fashioned way of doing things,
but I like it.

It's great to be the only one who knows how to do stuff properly. Netflix is
the only company that knows how to properly run a streaming video business.
Amazon is the only one that knows how to properly sell stuff on the internet.
FB is the only one that knows how to do social networking. Google is the only
one that knows how to do search. Tesla is the only one that knows how to
properly make a luxury electric car. And so on and so forth. When you're the
only one that knows how to do stuff, your lead is nearly insurmountable, since
the competitor has to not merely be as good to win, it has to be twice or
three times as good, which is impossible to do in some markets.

------
MaysonL
Culture, retail, people, and organization.

------
fleitz
Eleventy billion in cash.

~~~
adventured
*two-eleventy billion dollars in cash

All joking aside, they have a net of something like $165 billion in cash.
That's a very large competitive advantage indeed, even if they had to take a
large tax hit on it in the process of repatriating. Basically every other
phone maker except Samsung has to be careful not to make a big mistake from
one generation to the next, or it might be their last.

------
sytelus
Apple really really need to focus on starting new product lines. The biggest
mistake companies often make at this stage is "it's not for us if it's not
going to be billion dollar business" mindset. Apple should just go after every
product that it can produce at significant improvement. Everything from
kitchen microwave to digital picture frame to 3D printers to quadcopters to
children's toys is a fair area to explore. This will require balancing
resources between mature products and new products, aggressive talent
acquisition and product life cycle management that scales to 100s of products.
Companies with cash flow like Apple should be announcing new product every
quarter. Instead of trying to optimize for one product and get all possible
thud for once-a-year event they should spread out their events over more eggs
in the basket. Some of the products will only sell few million and may not
move the needle but as long as Apple had good return on their total
investment, it should be ok.For example, they can easily spin up team of just
10 people to produce digital photo frames and it's not going to be billion
dollar market but if it makes revenue in access of 10 million, it's prett good
ROI. Eventually the long tail of small products should be much more anti-
fragile and sustainable for large margins.

This is exactly opposite to what Jobs wanted (focus on 2 or 3 things). I think
Jobs philosophy was necessary as long as there was one super good guy who
needed to make all the calls. This is extremely fragile system. A much better
system is 100s of product designers working on 100s of internal experiments
and 10% of those passes internal scrutiny on quality and advancement of art to
finally face the market except that not every product is expected to become
billion dollar market. Just 10s of million dollar market supported by small a
team should be good enough. Create a long tail instead of keep looking for
that lucky unicorn.

~~~
gareim
The day I notice them doing this is the day I sell any shares I own in Apple.
Maybe it works in the short term, but going into "100s of products" dilutes
not just the brand, but the attention to detail as well.

When I walk into an Apple store, I see the three main product lines and I see
a few others scattered. I see a great staff (35 floor employees on a Thursday
afternoon!) helping people with new purchases, teaching people how to use
their Macs, and occasionally a tutorial on a specific subject. In your vision,
I would be walking into a Walmart.

~~~
sytelus
You will be very likely forced to sell your shares in their current model much
more faster :). The rules of economics detects that fat margins are not
protectable over long run. Eventually competitors will meet minimum bar and
start eating away your market share. That is exactly what's happening. The
iPhone sales are on declining trajectory and iPad sales are already 25% down.
Tablet market is actually booming but people are just buying cheaper ones that
are good enough instead of twice expensive and better than good enough. The
market for luxury goods have never been large and often ends up becoming
niche.

Your assertion about brand dilution and attention to detail are incorrect.
Good brands have been able to scale historically. GE - in their heydays - was
worshipped for its ability to deliver countless appliances designed with very
high quality, innovations and care. HP in its heyday had 100s of products
known for its innovation and quality. Microsoft in its heyday had dozens of
products that were either in top or close second in their category. Pepsi Co
currently produces 100s of products under different brand names, many of them
huge market leaders. Google has dozens of products (Email, maps, news, book
search, scholar, docs etc etc) - all of which are pretty high quality and
either in top or close.

Eventually companies don't sell product, they sell their philosophy and
culture. Only anti-fragile way for long term survival is ability to scale and
embed this philosophy without single braking point and by creating a long
tail.

Apple's strength is to apply design to make superior products. They need to
scale this strength to work on every aspect of life instead of just 3 devices.
You should also read Talib's book on anti-fragility. Apple's (and Jobs)
strategy is anti-thesis of that philosophy. Businesses are rewarded because
others can't copy them easily. Apple will be rewarded if they can scale their
design philosophy and process precisely because others have failed to do so.

PS: it's pretty bad form to down-vote because you don't agree with opinion.

~~~
DanBC
> PS: it's pretty bad form to down-vote because you don't agree with opinion.

Ignore single downvotes; they're often mistakes and usually corrected.

Also:

[https://news.ycombinator.com/item?id=658683](https://news.ycombinator.com/item?id=658683)

> IIRC we first had this conversation about a month after launch. Downvotes
> have always been used to express disagreement. Or more precisely, a negative
> score has: users seem not to downvote something they disagree with if it
> already has a sufficiently negative score.

[https://news.ycombinator.com/item?id=117171](https://news.ycombinator.com/item?id=117171)

> I think it's ok to use the up and down arrows to express agreement.
> Obviously the uparrows aren't only for applauding politeness, so it seems
> reasonable that the downarrows aren't only for booing rudeness.

> It only becomes abuse when people resort to karma bombing: downvoting a lot
> of comments by one user without reading them in order to subtract maximum
> karma. Fortunately we now have several levels of software to protect against
> that.

There's another one from pg saying the same, but I can't find it at the
moment.

But he did also say this:

[https://news.ycombinator.com/item?id=1057347](https://news.ycombinator.com/item?id=1057347)

> My plan for dealing with downvoting is just not to display points on
> comments any more. The hard part is that to make that work, I also have to
> come up with alternative ways for people to find the comments they're most
> interested in on big threads.

I agree that people should avoid downvoting for disagreement, but it's
probably more important to avoid accusing someone else of downvoting you for
disagreement.

