I don’t know anything about internals at Apple but I have been wondering constantly how they manage to be successful over and over again. If I had to bet, I’d say is this. I’ve worked for many companies where the ego of a product or service line boss always trumped overall strategy. It was about them not the company. Somehow Apple has succeeded in damping down this effect (I am sure it’s there but just on different level than in other companies).
I don’t know how Apple is organized internally but if I may be allowed to speculate, I think the way to avoid these ego issues is by moving people around constantly. If you don’t allow any team to establish a “territory” on a particular product, you may be able to get away with it.
Based on my knowledge of the company, it's pretty heavily top-down led. That would be my guess on why it's able to execute against its strategy.
But I am not sure it's particularly better at it than other tech giants. My guess for the main reason Apple is so successful is its strategy, not their execution of it: Sell expensive top-class products (even if that means being late to market), and establish strongly walled ecosystems between those products.
Yes, I'm guessing margin is everything for Apple. If they can't make 30-40% on a product then they will leave it for someone else.
Somehow, Apple manages to prevent that from happening.
Leaving aside the unique qualities of the Japanese market, I think this depends a lot on your definition of success.
If you believe that a major consumer products company can only be "successful" if they have universal global penetration and a user base in the hundreds of millions, that's certainly a difficult standard to meet. It's also, I'd argue, a very modern standard - nobody would've thought that way in 1995 (or even 2005).
On the other hand, if you define "success" as repeatedly shipping good and innovative products that users love over a span of ~40 years and being (mostly) insanely profitable while doing so, then it's hard to argue against Apple's success.
Apple also has a market cap of $1.5 Trillion, with a T, so there's that.
> Apple also has a market cap of $1.5 Trillion, with a T, so there's that.
The stock market hasn't been representative of real world for a long time now.
Read as: [their revenues] haven’t been representative of real world for a long time now.
Hmm. $260B in revenue in FY2019 and $55B in profit with $206B cash on hand.
I think their (current) $1.5T current valuation is probably fine.
Apple is a fad that got propped up by phones. They're behind all other major computer vendors. They have a very small marketshare for phones. They have the biggest profit margin out of anyone, and it's because of literally a couple of products.
People who go for things with a huge profit margin (overpriced things) do so based on emotional response (a fad) as opposed to logical reasoning. This is why they buy a phone wrapped in glass - it's shiny. That makes them liking your product volatile. A company enjoying 15 minutes of fame on limited SKUs is not a successful company. It's a rich company, that won the lottery from people who like shiny things.
Yes, they do make things that "just work" better than the competition. They limit choice, put you behind a wall, give you no control - and there is that group of people who want that. The problem is, that group will overnight change to some new fad phone vendor that comes out, and apple will become uncool overnight. Same thing will happen to facebook, instagram, twitter, etc.
If you do take microsoft or google for example - they have a thousand eggs in a hundred baskets. This is stability. Heck, even amazon - cloud services and selling goods, book store, mechanical turk - they're in everything. Apple is selling a phone and a computer.
Even if this were true I don't think it would matter because Apple sells a lot of phones, but anyway this is a gross oversimplification of what Apple is in 2020. The services business alone - App Store, iTunes, etc. - is almost $50 billion a year. Apple nets as much money selling digital goods as Samsung does from its entire line of business.
They also make the only smartwatch consumers care about, headphones that have become status symbols, the canonical tablet (everything is an iPad even if it isn't), one of the most popular STBs in the world, and a metric ton of accessories and peripherals.
The money doesn't come from accounting fraud or tricking people; it comes from making really good stuff that lots of people want to buy.
the apple watch? the one that only iphone users have, because they have an iphone?
headphones? who buys apple headphones for their android phone again?
ipad? the thing that runs the os and the store from the iphone, which no one who isn't interested in phones would buy? people who don't like iphones won't buy an ipad. it is literally the same target market. whoever makes the new 'cool phone to have' is going to also make a new pad. phones and pads are tied.
and the accessories for all that - again, dependent on the phone 100%.
lots of people want to buy it (if by lots you mean a tiny fraction of the people). margin is high - it's not tricking people, it's selling the product as 'premium.' that tiny percentage of people agree. it's not actually premium for everyone else, since you don't own the device, and features are limited. when's the last time you chromecast hn to your big tv screen from your iphone again? how about plugging into a friend's computer and grabbing a music folder? he doesn't have itunes, and it's not a mac. how about storing your presentation meetings and some vm images for a product demo you want to do for work - or do you need a usb flash stick for that.
it's not 'really good stuff.' it's 'fad' - who in their right mind would wrap a phone in glass - those things fall a lot. would you buy a car made of glass?
everything you gave as an example is a fad that goes away in a minute when it's not cool anymore. it's no mark of a successful company. it's like calling a guy with a #1 hit a success. do you remember 'who let the dogs out?' so does everyone else. now, the iphone is no dog. it's pretty and shiny. a better example is rico suave. he makes shampoo now i hear.
Can I see source for this claim? Both Samsung Electronics and Apple do $200B+ revenue every year.
Samsung Q419 net operating profit: KRW 7.16 trillion (US$5.92 billion) 
Apple Q220 services revenue (net cost of sales): US$8.6 billion 
Apple services net sales: $13.3B
Apple services cost of sales: ($4.6B)
Apple OpEx, 14%: ($1.3B)
That's ~$7.4 billion in net income from services, which is as close to a 1:1 expression of services' contribution to "operating profit" as you can reasonably get in the five-minute financial analysis I'm willing to perform for an HN comment. For reference, Apple booked $11.25B profit for this quarter overall.
1. Services account for 14% of the total cost of sales, so I attribute the same amount in OpEx.
A stock’s price is theoretically the current value of a long term stream of income adjusted by the risk factor around its growth (positive or negative).
Revenue is interesting but only to the extent that it indicates earnings. This is because any two people can create two companies with a billion dollars in revenue but it is much more difficult to build one with a billion in earnings.
Caveat: "Expected" does not mean fact. But it is understandable why investors believe this.
Yes, this is what I said. Stock markets factor in future potential (a little too much I think) and not just current performance. Hence their growing diversion from reality.
It hasn’t been till the last year where Apple finally broke the market average and squeezed into a low 20 PE ratio. Fir comparison, Amazon hasn’t been below 60 in forever.
>> Windows worked just as fluid as iOS when they finally got it right, but they were there too late.
Of course it was fluid - Apple was already tied down by legacy hardware by the time Windows Phone released, whereas Microsoft had the huge benefit of a higher-baseline due to exponential hardware advances.
MS weren't merely 'late' - they had no vision in this space (see: Windows Mobile pre-iPhone).
>> Apple's success is more of lack of a good competitor more than anything else
Their competitors include literally the biggest company in the world.. If what you mean is that the iPhone specifically lacks a good competitor - even though both Microsoft and Google tried everything to rectify that - then isn't that reflective of Apple's incredible execution of the iPhone strategy and not, as you suggest, that Microsoft/Google/BlackBerry/Palm/Nokia/Samsung aren't good competitors?
>> To me a business is successful when they are big enough in their domain that a new tech doesn't suddenly wipe them out
Even under this subjective definition, Apple view their 'domain' as consumer electronics, not 'mobile' or 'computers' or 'mp3 players' (something they recognised back when they renamed themselves to Apple, dropping 'Computers'). So ironically, Apple don't merely fit the 'success' criteria under your definition, but Microsoft actually don't - they had to exit their once-primary domain - Windows and consumers - and pivot to enterprise and services (which of course has worked out great for them - but by your definition it's not a success as Apple and Google's new tech would've otherwise wiped them out)
Out of curiosity (since you seem to be Japanese) how would you rate companies like Toshiba or Sharp on this scale?
> how would you rate companies like Toshiba or Sharp on this scale
Successful. Because they survived transition from electrical->electronics->semiconductors. Although Sharp may be coming to the end of it's life now because of their LCD tech.
And Microsoft is not alone, Google essentially became MS 2.0 when they launched Android. Following MS footsteps to become successful. Which just further proves Microsoft's model.
Even though that's also approximately as long as Apple has been on its current success cycle anyways? If Apple had been "born" in 1998 would it be a "success" now like Google because the mac era never happened but things took off with the iMac and then the iPod?
This kinda feels like you decided on a conclusion and are now trying to backfill an explanation into it. :P
In fact the Macintosh lineup profits are likely more than the rest of the pc makers combined.
No doubt iPhone got them there more than any other product
So Apple's success is more of lack of a good competitor more than anything else. High end Android phones + Fast, stable, long term supported OS from Microsoft + Developers would have done the same thing to iPhone that PC did to Macs.
It sounds like you're not giving Apple enough credit for good hardware. iOS isn't the reason to get an iPhone, the physical device, the actual phone, is the reason.
If Apple allowed people to install Windows Mobile on iPhone, I think I'd still get an iPhone, and maybe would install Windows on it.
I think the issue is less that Apple did amazing things, than everyone else was being sloppy as hell with supply chain and quality control. If you look at post war consumer goods, many have great Craftsmanship. But the lure of planned obselessence and cheep outsourcing ruined most product design and execution, and Apple somehow realized there wasn't a risk of not getting the benefits of planned obselessence in making a fancier-crafted project while hardware was still improving.
It’s just not in their DNA. That says something
> The "normal" people care more about the aesthetics of the iPhone than the hardware.
That's exactly what I said. iPhone 6 to SE 2020 unibody design is from HTC. They made the same kind of phones on the outside.
The crappy keyboard was Johnny Ive’s idea! The world’s best industrial designer has created a completely unaccounted for liability, Apple has been trying to buy back those shitty computers now through trade ins or hopefully waiting people out, because the whole Mac unit is going to go into the red if there’s no plan to minimize, in a defiantly anti-consumer way, mass keyboard recalls. A mote of dust breaks them!
The HomePod. Apple Music - but maybe all subscription music services are unsustainable and bad. A $1,000 monitor stand and $700 wheels. Aperture. Feedback Assistant. Xcode. Numbers. Messages. A camera that still doesn’t save to DNG? $3 for 100GB iCloud. The overpriced SSD storage that haunts every user in existence. Batteries that bloat; batteries that are not user replaceable; batteries that are drained when the device is using more power than the boxer adapter provides. Security through obscurity, like FaceID and the Secure Enclave. Lack of security - people’s passwords are so easy to guess, and iCloud contains everything. Apple Maps. Siri. iCloud versions of their productivity apps. Remember CloudKit?
These are all from the last decade. As long as the iPhone sells none of it matters.
I am both a developer of "creative" (cross-platform) software, and a participant in several different online audio-software-related communities, I'd say that Apple is currently at an all-time low as far as the happiness within the union of the development and user communities for audio software on macOS.
Apple doesn't have to care ... but this was once a group that they explicitly identified as among their core target audiences. That can change over time, but it would be honest to acknowledge that whenever one is talking about success.
OTOH, despite the level of unhappiness about recent Apple macOS/hardware developments, most of the current macOS user community will keep buying Apple hardware. So ... success? Depends on that Point of View, I suppose.
These sort of communities (and I include HN in that list) are always a giant whinge-fest. I'd take zero notice of that and instead look at some figures you can trust.
Despite all the complaining I've heard here over the last few years Apple's share of the PC market hasn't moved.
it likely started with apple killing firewire (which immediately ended numerous product lines and EOL'ed many people's devices).
it continued with the redesign of final cut, which was clearly done to appeal to new(ish) users rather than people who used it all day.
the arrival of AUv3 has been somewhat half-assed, with poor documentation and inconsistent experiences among developers. developers using higher level audio APIs have also found things changing with no clear reason or announcements.
the mac hardware has continued to become less and less competitively priced if you care about CPU cycles/unit-of-currency.
the demise of connectors on macbooks was hard on many musicians who were performing live with their machines.
continued subtle OS-level changes continue to break many pro-audio/music creation apps in not necessarily deep ways, but the breakages still have to be addressed by someone.
there have been repeated reports of significant worsening of performance of various types of audio interfaces as macOS has moved from version to version. i tended to dimiss these initially, but they are becoming too common to completely write off. the machines are becoming more and more sensitive to the entire state of the USB bus(ses), and although they were never entirely safe in this respect, things have gotten worse just as USB connectivity for audio has become more and more important.
that's a sampling ...
It takes me back to when I was younger and every well polished presentation, jazzed me up like it does, this author.
I remember buying first gen. 27" iMac and marvelling at the resolution - I couldn't see the individual pixels!
Now I'm old and grumpy and not a single announcement from Apple or any other tech company for that matter, has made me giddy in years. Many announcements and ongoing blunders, have jaded my soul, bit by bit :)
I imagine some innovation, not iteration, is around the corner, because it just can't be that this is all we've managed to accomplish with all the opportunity that we've been given.
Does it? Don't you hone your perception and you are able to taste subtle differences instead of getting a kick from its novelty?
It depends what you’re trying to see, right?
Eventually your senses will be saturated by the mundane, physical realm.
True happiness lies in contentedness.
To be content is to have enough; to be full.
Only when we realise we are full—when we see we were born full—are we ready, willing, and able, to give.
Only through giving can we become full.
To give is to be content.
The first iPhone was very impactful. Now everybody has something much better on their pockets and it's just meh.
I hope when I’m on my deathbed I remember to say something like:
I wish I’d spent more time being frustrated at on-screen keyboards;
Most of my best writing went unnoticed.
I don't understand why this isn't waterfall. Because ... sometimes Apple changes their plans?
It may feel like waterfall from the outside because it seems like they do a lot of planning up front and then execute on those plans, but that's too simplistic a view of what actually happens internally.
That does't stop people from doing it, though, and I think he's just trying to make sure that readers don't learn the wrong lesson (eg no course corrections! plan everything and stick to it no matter what!) from this analysis.
It seems to me that the reason Apple succeeds with a (relatively close to) waterfall style approach is the long term planning / strong point of view the author describes. The more the goalposts move, the more agile you have to be.
In the startups that I have worked with, most of them don't give nearly much time to devs.
The iPhone and iPad are so easy to use that a three year old can use them. Which makes them easier to use for ebook readers in schools.
Yes, it's only the one app - but I think that's a win for usability.
It's the video I think of whenever someone on HN is complaining that iOS is hard to use and that things were better in the past.
I'm not sure what a chimp would be able to do at a command line, but I suspect not much.
An 8 year old desktop running Windows 10 or Ubuntu 20.04 is perfectly functional today, and will continue to be kept up to date for many more years in the future. An 8 year old Mac Mini runs either of those OSes pretty well. Now that Boot Camp will no longer be supported, an Apple Silicon Mac Mini bought in 2020 would have to be thrown away in 2028 since it will no longer receive security patches.
This is... not good.
BTW, the author of this article is not ignorant in these affairs: https://en.wikipedia.org/wiki/Steven_Sinofsky
They had two years to get ready for 64-bit only, though the writing was on the wall for more than 5. They didn't. Either they didn't care, didn't find it worthwhile, or they didn't even exist anymore.
>There’s a whole book to be written about the “deal” a company makes to [...] promise compatibility. The reward of success is extremely high, but it is almost a Faustian bargain because you will absolutely cede the right to innovate
No one said that there weren't downsides to Apple's approach. The downsides are well known. And, as a user I'm slightly annoyed about the loss of 32-bit support. But if 32 bit support and backward compatibility is important, there's plenty of options including Windows, Linux or dual-booting MacOS versions .
Personally, I'm willing to suffer the short term pain of lost backward compatibility because I'm excited about the future of computing. As a user and developer I've already lived through 16->32->64 bit transitions (and similar disruptions). They suck at the time, but they're ultimately worth it. You can't stop progress.
10 is better than 7 but not as good as the 15+ years Windows and Linux offer.
Apple should put its efforts into creating the future fir those willing to pay for it, not grumps with 8 year old computers too cheap to upgrade to far better hardware.
* iMac: Late 2009 or later
* MacBook: Late 2009 or later
* MacBook Pro: Mid 2010 or later
* MacBook Air: Late 2010 or later
* Mac Mini: Mid 2010 or later
* Mac Pro: Mid 2010 or later
Most people seem to replace their phones on a regular 2-3 year cadence. Much less so on laptops -- and surely Macs tend to get supported for long period of time; I can run Big Sur on a 6 year old Mac.
Same with iPhones -- iPhone 6S is going to run iOS 14.
As a consumer, if I were to buy an alternative to the iPhone -- which is practically _only_ Android -- then I'm looking at software obsolescence much earlier;
I mean, look at Android 11 & iOS 14. iPhones released in 2015 are still supported but Android 11 goes only as far back as Pixel 2, a phone from 2017.
So it doesn't seem like Apple is a company that is using "planned obsolescence" from a purely functionality perspective.
Sure, hardware degrades in quality overtime -- but that's a function of physical constraints -- not business strategy to get people to buy new stuff; well, at least for the _most_ (some?) part.