(B) In the 90s, many analysts and business scholars suggested, at that time, that Apple should sell its hardware business to an Asian PC manufacturer and focus only on developing and OEMing its software to other PC manufacturers, as Microsoft has been doing since its inception. It goes without saying that if Apple would have not kept its full hardware and software value chain, it will not be the most valued technology company today with Apple shares above $300 this week for the first time.
A few months ago, I bought a new MacBook Pro. After creating my logging and password, it recognized that I have in my home network an Apple Time Capsule on which I had back-ups of all my applications, virtual machines, and data from my previous MacBook Pro. My new MacBook Pro asked me if I wanted to upload my back-ups from my Time Capsule – I did agree with that nice suggestion – and the next day in the morning (it took all night for the transfer because of the large size of my back-up), I had all my applications, virtual machines, and data on my new MacBook Pro. I did not have to install any software application manually and I was ready to go to work! Do you know of any other story where migrating from one computer system to another one is easier?
Steve Jobs has said many times, over many interviews, that he learned earlier in his career that the key to success is to create INSANELY GREAT PRODUCTS! Do not worry about anything else – worry about creating insanely great products! And, that what Steve has been doing over and over since he returned back to Apple in 1996, in particular since 2004 with young kids starting to embrace the iPod and buying Macs only.
Steve’s vision is straightforward: solving the personal computing needs of everyone with Plug & Play products. All Apple products come with elegant and distinctive design and the complete components that you need to work and to play. On any Mac, you can instantly browse the Internet, blog, create your Web site, organize your photos and make a movie without having to purchase any additional software. No learning curve – just go for it!
Steve’ strategy is as simple as his vision: Apple value chain needs to be built to develop, to integrate and to distribute the different pieces of a product: the hardware, storage, O/S, applications, services, distribution. Many analysts and business scholars have said in the past that Microsoft was successful because it was focusing only on software, Intel was successful because it was focusing only on chips and Dell was successful because it was only manufacturing and marketing PCs – based on Microsoft and Intel’s technologies, and therefore Apple business model will never succeed if it develops, manufactures, markets and distributes a full computer product line. Guess what! Steve showed that all those analysts and business scholars were wrong.
In the end, what only matters is to be obsessed with developing insanely great products and get the right people, technology and organization to do so. No technology CEO has better managed than Steve Jobs the art to create and launch insanely great products. Although, Steve had a few product failures such as the Lisa in the early days of Apple or at NeXt with the NeXt workstation, failures that probably are the reasons for his today’s successes. But since 2004, one success leads to another one: from the Mac to the iPod, from the iPod to the iPhone and from the iPhone to the iPad (not to mention iTunes and the Apps Store)! Apple brand is so successful that Apple does not need to spend any marketing dollars to have thousands of people all over the world waiting to get its products from its stores (although it still excels at advertising its products).
And, product innovation is not only in the hardware – Time Capsule, in the application software – iLife, in the service – iTunes, in the mobile apps – the App Store – it is as well in the distribution channel with the Apple Store. Forget about Dell strategy to sell computer only on the Internet. The Apple Store is the America world best run IT department. The Apple Store is the new generation of User Groups. No need to torture yourself all day, all night to make your computer system works. Just go to the Apple Store and get the help that you need. Again everything must be easy with Apple’s vision of personal computing: especially getting help. No wonder why the Apple Store is selling more per square feet than Macy’s.
As Steve will tell you – simply said – the key to business success is insanely great products! Profits will come with great products and so will shareholder value.
Note: The picture above is the Apple Store au Louvre in Paris.
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Categories: Business Strategy