What in the heck is Cooking at trillion-dollar Apple?
Whereas Apple used to tell customers what they wanted, now it’s ‘give customers every possible option’
Steve Jobs was fond of an old Henry Ford quote that goes: “If I’d asked customers what they wanted, they would have told me: ‘A faster horse!’”
The point, Jobs said, was that people don’t know what they want unless they see it. The late Apple founder famously derided market research, and decided that the company knew best when it came to product design. Build it, and they will come: and pay for it too.
Jobs’s single-mindedness inevitably manifested itself in its products. Until his death in 2011, Apple only ever produced one model of the iPhone each year. It was not until two years later that the company diversified the line. It introduced the cut-price, plastic-shelled iPhone 5C alongside its premium sibling, the 5S.
Today, that simplicity is gone. Last Wednesday, Apple unveiled a complex, arguably confusing, array of three new iPhones with different screen sizes, features and prices.
The iPhones XR, XS and XS Max are an eclectic mix. The XS is the smallest of the three, yet is more expensive than the bigger-screen iPhone XR. At first glance, all three look similar, but the XR misses out on some features of the other two: its screen has a lower resolution and it lacks the dual-camera system of its more expensive companions.
Naming conventions have made the line-up stranger still: The X is a Roman numeral, pronounced “ten”, while the supplementary S and R are merely letters, and stand for nothing in particular.
To revisit Henry Ford, picking an iPhone has become almost as complicated as buying a car, with multiple variants of the same model. Woe betide the shopper wandering into Carphone Warehouse merely wanting to buy the new iPhone.
This is Tim Cook’s Apple. The company is now sprawling and, for all its polish, complicated. A glance at its website now shows seven different models of iPhone on sale.
Whereas Apple used to tell customers what they wanted, a better representation of its philosophy might now be “give customers every possible option”.
It is difficult to imagine the iPhone XR, in particular, existing in Steve Jobs’s Apple. It is a compromise device, created with cheaper components seemingly to hit a particular market segment that has been identified as unserved by the rest of Apple’s lineup.
“Apple is doing what it does best: incrementally improving hardware and providing a carefully segmented portfolio that provides consumers options across a wide range of price points,” said Geoff Blaber, an analyst at CCS Insight.
None of this is to say Cook’s Apple is going down the wrong path. Since it started diversifying the iPhone lineup in 2013, sales have soared. On Wednesday, Cook said that Apple was close to selling its two-billionth device running iOS – the software that runs on the iPhone and iPad. More than three quarters of those have been sold during Cook’s seven years running Apple.
Under his leadership, Apple has broken the record for the biggest ever quarterly profit three times, and become the world’s first company worth one trillion dollars.
That has been the result of playing a different game. Apple is a less exclusive club than it used to be. Its line of products extends far beyond what it used to, with headphones, smartwatches and home speakers, and different lines of iPad and laptop.
That creates more holes for magic to seep out of. Last year, when Apple announced its HomePod speaker, Cook promised it before Christmas. At the eleventh hour, it was delayed until February.
A year ago, the company announced a device called AirPower, a mat that would be able to wirelessly charge several Apple products at once. It has still not gone on sale, and there was no mention of it at Wednesday’s launch event.
When Apple’s AirPod headphones were announced two years ago, it took months for them to come on sale, and they then faced months of supply shortages. It has not been ignored that product delays have increased under Cook, who was once touted as the master of the supply chain.
This has all provided ammunition for the common criticism that Apple has lost some of its aura of invincibility under Cook. A more realistic explanation is that the world he is navigating is more complicated than the one in Jobs’s day, and Apple has bent to it, rather than bending the world.
Tim Cook’s Apple may be more complicated, and more vulnerable to critics. But it is also worth a trillion dollars.
- © The Daily Telegraph