By RenΓ© Carayol, 22 April 2004 15:40
COMMENT Forget the success of iTunes or even the iPod. The lesson to take from Apple is all about an organisation and leader that can learn from its past, says Rene Carayol.
Are Apple - and its charismatic leader Steve Jobs - the ultimate reformed act? I want to look at the good, the bad and the ugly at this company, focusing on the good that has seen a tremendous turnaround, and what lessons that delivers.
Go back a few years and it is clear Apple had become a cult not a business. If you didn't use one you weren't part of the hippest religion in town.
I say that as I oversaw a big community of Apple users. The company has long been strong in the media, publishing and creative arts, as well as education, of course. When I was IT director at IPC Media we had lots of Macs.
They were fantastic products for the creatives but esoteric. They were also three times more expensive to maintain than the PCs we had to get in the experts all the time to help out. Unsurprisingly, the company hit the buffers.
But as it became the norm to predict death at the end of a slow demise, back came co-founder Steve Jobs, for a long as interim CEO, then as full-on leader. That was a good move. We were about to see a new Jobs.
And so we eventually arrive at the birth of the little Apple, what I'm calling the iPod. Again the company has cult status - in a good way - again it is cool.
Check out those ads. My only criticism is those white earphones. Consumers asked if Apple would change them. Apple didn't want to - they're cool too. Only they're a mugger's delight. Is it cool to be mugged? That's the ugly side of the resurgent vendor.
But the good - and here Apple has been very good - is not only in riding a new wave in personal technology but just how it's done it.
Unlike other sellers of legitimate tracks online, Apple knows it won't make mint from iTunes. Instead, it realises that service drives sales of its iPods, the must have gadget of last year and maybe this year too.
The figures speak for themselves. The company's second quarter revenues were up year-on-year to $1.9bn. Profits tripled to $46m, largely driven by iPod sales.
Apple was a 'fuck you' company. It wouldn't change, even if change was its best option in most cases. It - and I'm guessing Jobs - learnt that no man is an island. Critically iPods are compatible with Windows machines. Really they had to be to get any kind of market share.
A recent piece on silicon.com, from writers in Silicon Valley, questions whether the iPod will go the way of the Mac - poorly licensed and eventually beaten into a distant second place by PC clones that were often not nearly as capable.
I'm not sure that will be the case. The best lesson to learn from Jobs and co is that this is a company which has now put its business hat on. The iPod and iTunes - which makes little money but furthers the cause - are a marketer's dream.
So there are now around two million users. Will it go down in history as ground-breaking? I'm not sure that's what I'd like to draw from all this - better to remember a company that learnt from its past and is now once again hot property.
Comments
There are 18 comments. Join the discussion
1. j.j.richters
It is documented that Jobs did some traveling in his younger years. India I believe. It looks like he has developed a Bhuddist/Taoist mindset towards business: It is not the final product that is important, it is the path towards a solution that is. That's why he will not be distracted by Real or opening up the OS or iTunes (as proposed in yesterday's Guardian). Changing the business ways to what the majority does (intel/msoft) is not interesting. That would only make Apple a clone of the others. Apple/Jobs is finding its way. Whereto is not sure and not important.
2. anonymous
"They were also three times more expensive to maintain than the PCs we had to get in the experts all the time to help out."
Wow... something was definitely wrong at IPC Media. Did they develop core competence in dealing with Macs, or did they pass it off to outsiders each time a problem had to be solved? Study after study points to lower cost of ownership on the Mac platform overall. This comment lends one to believe either Macs are hard to maintain (false) or IPC Media didn't want to bother maintaining the Macs themselves (more likely).
With Mac OS X, Macs are even easier maintain - they also easily integrate with many platforms, especially if there already exists some UNIX/Linux experience. Even still, IT support still has to learn something about the systems for which they are tasked to maintain.
3. will
wow this guy needs to learn how to write. that was the most incoherent, awkwardly phrased article ive ever read.
4. Melangell
3X more? Wow. As another has said here, there has been many studies concluding that the Mac platform has a much lower cost of ownership than Wintel. These were conducted before Mac OSX. I've been a Mac user since 1994 and have never needed outside help with my personal systems and networks. Oh well.
5. Michael Fischer
If Ren?eren't so well known, I'd suspect a Microsoft plant here. When Ren?as IT director of IPC (1995-1998), Jobs had just returned towards the end of that period, taking control in 1997.
His comment about it costing "three times more" to support Macs would suggest that he was not a very good IT director, given that at the time Windows support costs were reckoned by most independent surveys of industry to cost between 1.8 and 2.5 times more than Macs, which was down from Dos costs of well over three times more. Performing up to 9 times worse than the industry might explain why he was kicked upstairs to CEO.
His comment about "Apple not changing" is also odd, given what Apple is being compared to. The only problem Apple did have over that time was trying to 'change' to the prevalent model and licensing their operating system only to find they were cannabalising their own sales.
So, as far as learning from its past ... the critical event at both ends is Jobs ... he left (was ejected) and the company went down, he returned and it goes back up. Not so much learning from the past as regaining the past.
6. Joe IT
"They were also three times more expensive to maintain than the PCs we had to get in the experts all the time to help out."
There is something wrong with this statement.
Is it possible the writer of this article (He did say he was IT Director) knew nothing about macs and got ripped off?
"Unsurprisingly, the company hit the buffers?"
This must have been because they had macs, right?. Or maybe was it because they hired IT people that could not even administrate the easiest and most inexpensive computer to keep running?
Sounds like more of the same incorrect statements about the mac that people who don't know like to pass on.
7. Ex IPC IT
3 times more expensive rene,, Really....
Could have fooled me. If that was the case why did ipc have less than 8 mac engineers for the 2000+ macs and 10 pc support engineers for the less than 500 pcs not including the 30 odd y2k team of consultants (Just for the pc users mind. as y2k went largely unoticed on the mac side)
So tell me again just how where the macs more expensive, and don't say because the mac support staff cost more because you know for a fact you paid us less than the pc support guys.
For the Record I Worked on IPC's Help desk for 4 years between 1997 - 2001 so i know of what i speak unlike Rene.... Whom i doubt ever atcually used a Mac (He certainly hadn't last time i saw him)
We Suffered,, We where there...
8. Johnny Marr
wIll frum iOwwa,i know yore american, but shurely the irony hear hardly need pointing out, -
"... wow this guy needs to learn how to write. that was the most incoherent, awkwardly phrased article ive ever read. ..."
Hahahahahahahahahahahah!!!
9. Nick
Rene's comments about Apple, Macintoshes, iPods, iTMS and support costs reflect a long trend on Silicon.com of only publishing articles that denigrate Apple, predict their demise or serve up misinformation about them
As a "former IT Director" I'm sure Rene will understand what I mean when I say he's talking bollocks
And the comments above from a former IPC helpdesk worker would seem to confirm this
10. Owen Linzmayer
Apple and Jobs have clearly learned from past mistakes are are not likely to repeat them now that the firm has been pulled from the brink of disaster. Readers of my latest book, "Apple Confidential 2.0: The Definitive History of the World's Most Colorful Company," can learn about decades of screw ups in Cupertino, but the recent history of the company is one success after another. When the time is right, Apple will embrace other music formats for the iPod. There are no major technical barriers to doing so, as there were in making the original Mac compatible with Windows.
11. David Wright
Having worked with Mac's, PC's, minis and mainframes from the 80's on, I have to dispute the costs issue that Ren?ntroduced in his article. Like the others who have commented here, we found that they were relatively cheap to support - although they were about twice the price of PC kit to purchase in the first place!
I started working with Mac's in '87, we found they needed very little support. Apart from the occassional hardware failure, I don't think we ever used the helpdesk. As I was the sole PC user in our office for a long time (everybody else programmed on VAX, IBM 3070 or ICL and used the Macs for WP and presentations), we didn't have any PC support issues either. Once we had been taken over and the new parent company had an anti-Apple stance and we switched over to PCs, the support calls sky-rocketed.
As stated in my opening, my only real complaint about Apple's Macitosh was the inital purchase cost - and the cost of supporting peripherals. This meant that they were very hard to justify compared to PC's on a capital cost front (and TCO wasn't a well defined topic back then).
In Europe, Apple has always had a strange way of dealing with exchange rates, while PC kit went from $1,000 in the US to around £600-1000 in the UK, Apple had a tendancy to get confused with exchange rate calculations, so a $1,000 Mac in the US would cost £2,000 in the UK.
And they don't seem to have improved much, I was looking at the new G5 Mac's that came out recently, and looking at the US prices in the press releases and their on-line store, I was very tempted, until I got pushed across to the German store, where they are still much more expensive than in the States.
Looking at the Apple US and Apple Germany sites today, gives the top of the range G5 as costing 2,522 in the US and 3,246 in Germany...
And an entry level system (G5 1,6Ghz, 256Mb RAM, 80Gb, nVidia FX5200) costs 1517 in the States and 1970 in Germany. A Fujitsu Siemens Scaleo Athlon 64 3200+ with 1Gb RAM, 250Gb HD and the same video card costs 999.
It takes an awful lot of support calls and wasted time to make up that other 1k for a lower spec Mac. Upping the spec to the equivalent, ignoring processor speed, boosts the costs to 2.481 in Germany. (all prices exclude monitors, speakers etc.)
It is a shame, I love Mac's, but at those sort of prices, there is no justification I can make to have one at home. I can make a small network of Linux and Windows XP machines to develop on for the cost of 1 Mac :-(
12. Rory Choudhuri
Hey folks, don't rise to it. Silicon.com, while a good resource in many ways, suffers from an enduring anti-Apple/Macintosh bias that surfaces in every single article they write about the company.
Hey silicon.com - you just had a comment posted by Owen Linzmayer, who's a well respected author in the Mac world. Next time you need to write a piece about Apple, why not be brave enough to choose someone like him?
Got the guts to try it?
(Ed note. Why would it take guts to talk to Owen Linzmayer? Not quite sure we get your point - or agree with the assertion that we are 'anti-Apple' in any way - it couldn't be further from the truth. The pro-Wintel lobby keep telling us we're anti-Microsoft and too pro-Apple. The pro-Apple lobby tell us we're anti-Apple - so perhaps we're just balanced - so neither opposing side gets to see plaudets handed undeservedly upon their beloved company. Don't forget it was only a matter of months ago that we awarded Steve Jobs the accolade of most important man in IT... I'd hate to think how nice we'd be to him if we weren't so 'anti-Apple' Rory... check out http://www.siliconagendasetters.com/list1.html )
13. anonymous
Macs are not anywhere near as expensive to maintain. In all the years I've been using macs I have not needed to spend any money on maintenance because they are so easy to understand. Compare that to the new PC's I'm having to look after. Temperamental, unpredictable, sullen, unco-operative, secretive and stupid.
14. David J. Howe
3X???...I run a mixed environment of Win and Macs...my Macs outnumber the Win boxes 12 to 1 and my support costs are the same for either platform in dollar outlay...numerous studies have shown the Mac to be cheaper to support ...fact checker on holiday???
15. Gus the Kiwi
Like many others, I am amazed at Rene's comment about the cost of supporting Macs. It simply does not ring true - and I am typing this from a PC!
I worked as an independent IT consultant for many years, and my 'bread and butter' was the PC work. Although my clients had a similar number of Macs to PCs, the Macs rarely required support. A fact I saw regularly borne out by the ratio of support staff to machines on sites I worked at: PCs: c. 1 FTE to 25 machines , Macs: c. 1 FTE to 45 machines.
I do not kid myself that Macs are perfect - they're not. Nor can I do everything I want to do on a Mac. But the fact my Mac at home stays on 24 hrs a day, is used intensively, and has not needed maintenance for 18 months speaks for itself.
I think I've figured out why Rene is no longer an IT Director...
16. Geoff Norman
Macs have always been cheaper to maintain than PCs - by anything from two to one to five to one. Also the price may be higher than a PC but the cost of ownership has always been less - i was involved in a detailed study in the late 1980s - we proved that the mac was so much more rpductive that you buy a a Mac and be given a PC and the mac would still save you money over less than three years.
The article was really poor and you should set higher standards than this.
17. anonymous
I've used Macs and PCs for over 15 years and have found Macs to be much more reliable and cheaper to maintain. If you factor resell value into a Mac, it is actually cheaper than an equivalent PC. I've sold five year old Macs for real money. Try selling a five year old PC.
18. Eric
3x more for incomepent IT personnel. Raytheon did a reserach project and found they could support three times more Macintoshes than PCs per IT staff member. But we're taking competent staff members.
This author needs to read a bit more.
And what's with that comment "I call the iPod?" Did Steve call you up for advice? You should meet Peggy Hill dude. She's just your type.