Apple and the innovation dilemma
Just how long can Apple run the table in the post-Jobs era? It was simply a matter of time before those whispers turned into a question asked out loud. George Colony, the CEO of Forrester, a research and advisory firm that has followed the company as closely as anyone, is taking a particularly dim view of Apple’s future. In a blog post that was guaranteed to spark a conversation, Colony says Apple’s days as a market leader are numbered; its “momentum will carry it for 24-48 months” and then, absent a “charismatic leader” in the Jobs mold, it will devolve from “being a great company to being a good company.”
Colony doesn’t get too specific about what this means, but we know. It’s not just about market cap, or stock price or any other shareholder metric. Colony is talking about that combination of imagination and execution pixie dust that has made Apple the most significant high-tech company of the moment, and one of the most important ever.
It’s a pretty big statement, especially since Apple is on fire: $6 billion earned on $40 billion in revenues in the most recent quarter, the iPhone selling as briskly in the rest of the world now as it did in the United States for years, 65 million iPads sold in two years, more cash than it knows what to do with, and at least one analyst speculating that it’ll be a $1,000 stock before long.
It’s also not the toughest bet to make, since high-tech companies, in particular, almost always glow hot for only so long, with rare exceptions – especially after the charismatic founder leaves or is kicked out. We’ve seen it at Sony, Polaroid, Disney and even Apple, Colony argues, when Jobs was kicked out in 1985.
But it’s a sucker’s bet. Here’s the easy counter: There is virtually no chance Apple doesn’t have tricks up its sleeve that were developed in the Jobs era. And it’s those tricks, of course, that got them this far. They have something everyone can see: a management team in CEO Tim Cook and designer Jony Ive, handpicked by Jobs more than a decade ago. Indeed, Cult of Mac editor Leander Kahney says Ive is all the proof you need to know that Colony has it wrong:
Apple’s design chief Sir Jonathan Ive – the man Steve Jobs once called his “spiritual partner” and the genius behind Apple’s iconic aesthetic and design language – is still working at Apple. More importantly, as Jobs bragged to his biographer, Jony Ive has just as much operational power at Apple as Tim Cook himself. Cook is only nominally Ive’s boss: In reality, thanks to Steve, they’re equals.
A new iPad, the same iEthics
Several days after the launch of the new iPad 3, HD, or whatever it’s called, we all know about it’s blazing 4G capabilities, including its ability to be a hotspot, carrier permitting, of course. We know about its Retina display, which makes the painful, insufferable scourge of image pixelization a thing of the past. We know about Infinity Blade. We know that to pack all this in, Apple’s designers had to let out the new iPad’s aluminum waist to accommodate some unfortunate but really quite microscopic weight gain. We know the iPad’s battery life is still amazing, and its price point is altogether unchanged. We know Apple has adopted a cunning new strategy of putting the previous-generation iPad, as it did with the iPhone 4, on a sort of permanent sale, to scoop up the low end of the high-end market. (We wonder if this was Steve Jobs’s last decree or Tim Cook’s first.) We know a lot about the iPad.
But what we don’t know: How many of Foxconn’s nearly 100,000 employees will harm themselves, intentionally or inadvertently — or their families or loved ones — in the manufacture of it? And will the developed world ever acknowledge the dark side of these truly transformative technologies, like the iPad, or will we continue to tell ourselves fables to explain away the havoc our addictions wreak on the developing world? Is a device really magic if to pull a rabbit out of a hat, you have to kill a disappearing dove?
Those of us who have been technology journalists have long been subjected to the cult of Steve Jobs’s Apple, and those of us who are fans of technology are mostly well aware of the stark elegance and extreme usability — even the words seem inadequate — that come with using, let alone experiencing, Apple products. But the rumblings about Apple’s manufacturing processes started years ago, and the recent New York Times series on the ignobility of Foxconn as an employer blew a hole in the side of that particular ship of willful ignorance. Few Apple consumers can claim not to understand the human sacrifice behind their glowing screens — the death, diseases, exhaustion, mental and emotional stress, and superhuman expectations placed upon the workers who bring these magic devices to life. It’s not just in the papers — Mike Daisey’s This American Life podcast exposé on Foxconn and Apple is a mere click away, and most mainstream media have given at least passing coverage to the working conditions reflected in the Gorilla Glass on our devices.
Update, 3/16/2012: Mike Daisey’s account of working conditions at Foxconn for This American Life has been retracted by the radio show. Other reporting linked to here describing similar episodes and working conditions has not been retracted as of this update.
To be sure, Apple isn’t the first company to exploit a developing society’s cheap labor. That’s a tradition that proudly goes back hundreds of years, arguably to the first triangle trades, or perhaps to Roman times. Maybe things have come full circle for China, and this is just another version of Marco Polo and the Silk Road. But there’s something insidious about a near-perfect system where the only factor beyond design is the human one. (Especially when those humans decide to jump off buildings.)
Apple has given more than lip service to the problem, and worker suicides appear to be down. But when will American consumers care how their iPads are built? When will they be told how many human hands had to touch the elegant machine, including the last pair that wiped off all the fingerprints with powerful solvents, and how many yuans were put in those hands at the end of the workweek? With technology taking an ever greater place in our culture and our society, when do we consumers begin to demand ethical technology, the way some of us now demand ethical meat and ethical investing?
The apps that run on these devices — not just iPhones and iPads, but Kindle Fires and Samsung Galaxy Tabs — enable social connection and sharing as never before. Communication across time, distance and borders has become free, or just pennies a minute. But few, if any, apps enable any sort of social organizing around things more important than discounted lunches or happy hours. In fact Groupon founder Andrew Mason famously abandoned his social-change startup to focus on the far more popular idea of building a coupon site. We like — love — the social tooling our devices allow us, as long as they cater to our essential selfishness as consumers.
Perhaps when we see a rise in prices something is afoot.
Five 2011 tech earthquakes
By John C Abell The opinions expressed are his own.
Pick a year: It’s easy to look back and convince yourself That Was The Year That Was in tech, partly because the pace of change is so rapid and partly because we so readily embrace and then quickly depend on things that are completely different. Consider this: When the class of 2012 was applying to college, there was no iPhone. Until those students were just about at the end of their junior years, there was no iPad. Both of these nascent devices now define the mobile Internet, which is where all the action is.
But 2011 had some pretty remarkable advances that seem to be the start of inexorable things to come, as well as some surprising and sad examples of demise, whose impact will surely be felt for years to come, in ways that are currently near-impossible to predict.
Some may argue that 2011 was the year of the tablet (redux), because of the spritely launch of Amazon’s Fire and Barnes & Noble’s reboot of the Nook color. I say, it was bound to happen, and that the only really interesting thing is that content companies are giving Apple a bit of competition, and not the hardware bigwigs.
The cloud was big in 2011, but in a way it just seemed to finally achieve escape velocity after Apple created iCloud within its rigorously controlled ecosystem.
Here are five tech events from 2011 that may not seem entirely obvious but which I think will resonate for years.
Siri
@Vidya3049 You are correct, sir. We will all be looking for early cracks. I think, however, that there is enough in the secret Apple pipeline to stay on the crest of the wave for many years to come — we’ll be seeing what was in Steve’s cupboard well past 2013, I would venture to say.
And the Grammy goes to — Steve Jobs!
First it was a bronze statue in Hungary. Now it’s a Grammy.
The accolades for the technology icon who died Oct 5 are still pouring in.
While Jobs is not a musician, his influence on the music industry — good or bad — cannot be denied. And for this, the National Academy of Recording Arts and Sciences is giving the co-founder of Apple Inc a Grammy at an invitation-only ceremony on Feb 11.
A formal acknowledgment of his Grammy — part of the 2012 Special Merit Award — will be made during the regular 54th annual Grammy Awards, to be held on Feb 12 at LA’s Staples Center.
“As former CEO and co-founder of Apple, Steve Jobs helped create products and technology that transformed the way we consume music, TV, movies, and books,” the academy said in a statement. ”A creative visionary, Jobs’ innovations such as the iPod and its counterpart, the online iTunes store, revolutionized the industry and how music was distributed and purchased.”
In 2002, Apple was a recipient of a technical Grammy award for contributions of outstanding technical significance to the recording field.
Honored alongside Jobs were other industry luminaries including musician and composer Dave Bartholomew, and recording engineer Rudy Van Gelder.
I had always suspected that a Grammy was meaningless….this confirms it.
Steve Jobs’ biographer felt lashing of his sharp tongue
Getting off a plane earlier this year, Walter Isaacson got hit with what he called “the thing you least want to see on your iPhone”– six or seven missed calls from his biography subject, Steve Jobs.
Speaking to a crowd at the Computer History Museum Tuesday night in Mountain View, Calif., Isaacson described finally connecting with Jobs, who apparently had just seen the book’s proposed cover and didn’t care for it. Jobs let loose a stream of invectives. “He just started yelling,” Isaacson recalled. “You have no taste. The cover is gimmicky. It’s ugly.”
Jobs, who hadn’t asked for editorial input into any other aspect of the book, said he would withdraw his cooperation unless he could have editorial input into the cover. Isaacson said he agreed in a matter of seconds, and then Jobs spent time choosing the two jacket photos— a recent shot on the front, and a younger Jobs on the back– and making sure the cover looked clean and simple.
Otherwise, the issue of editorial control “never came up,” said Isaacson. “I was stunned.” Jobs told him he wanted the biography to feel “independent” rather than like an “in-house project.”
At other moments, Isaacson said, Jobs reassured him that nobody would read it anyway– not because they didn’t care, but because people don’t read books anymore.
The biggest laugh of the night came from an audience question on film rights and if Isaacson thought George Clooney was right to play Jobs in a movie. Isaacson sidestepped the query by claiming ignorance of all things Hollywood, to the point where he had to download the Pixar movies Jobs greenlighted due to lack of familiarity with them. “It’s one of my blindspots,” he said.
from Stories I’d like to see:
Romney, Sully, Steve Jobs and The Boss
By Steven Brill
This is the first entry in a new regular column, "Stories I'd Like To See." It's the notebook of someone who still thinks like an editor but is over the thrill of managing a reporting staff – or the hassle of dealing with “great” story ideas that crash and burn when someone actually goes out and reports them and learns anew that even the best editors can’t hit much better than the best ballplayers (meaning three or four out of ten story ideas will actually work).
1. Mitt the philanthropist:
If the excellent New York Times story last month about Mitt Romney’s Mormon Church involvement is correct, he is required to tithe 10 percent of his income to the Church or church activities each year. This would amount to an enormous amount of money when he was running Bain Capital during its highly-successful years. It might even make him the most charitable person ever to run for President (or be President). Is this true? Or did he tithe 10 percent of his “taxable income,” which would have been a lot less, given all the deductions and favorable tax-rate-treatment available to a high-income private-equity earner?
2. Mitt the taxpayer:
On the other hand, this raises the issue of what percentage of his gross earnings Romney paid in taxes during his best years, or even last year, when presumably all of his earnings were capital gains and might also have been subject to all kinds of investment tax credit and other deductions. I know he hasn’t released his tax returns (yet), but can’t someone get access to Bain’s investor reports and an estimate of his gross income, and then extrapolate that into what he actually might have paid, given favorable tax treatment of capital gains and of carried interest payouts to private equity fund managers? Or, at least, can’t some pesky reporter simply pick Bain’s best two or three years when he was running it and ask Romney what percent of federal income tax he paid on his gross income?
3. Yankees’ empty seats:
If Romney’s faith strictly compels him to tithe, even as President, does this religious-demand of material (money)constitute a violation of church and state? This issue seems different from, let’s say, an Orthodox Jewish non-work on Sabbath law, because there are always Jewish faith emergency loopholes. Non-work is non-material. A tithe is matrial and is also different from a charitable donation.
Tech wrap: New Nook Color on the way?
Barnes & Noble sent out invites on Monday to a Nook-related event coming up on November 7. Most tech watchers expect the company to use the occasion to unveil a new version of its Android-powered Nook Color tablet e-reader, which could sport a better screen and upgraded hardware.
As CNet points out, the most anticipated question will be how much Barnes & Noble decides to charge for the new device. “With the Kindle Fire on sale at $199 (it ships November 15), there’s some pressure on B&N to come close to matching that price, though Amazon is allegedly losing money on each Fire it sells (our sources suggest the Fire currently costs around $220 to build). With that being the case, Barnes & Noble is more likely to come out with a faster, more powerful Nook Color that costs $249, though we wouldn’t be surprised to see it at $299,” writes David Carnoy.
Netflix has added a slew of new TV show episodes to its streaming video catalogue through an expanded licensing deal with ABC Television Group, a division of Disney. In addition to extending licensing for popular ABC shows such as “Lost” and “Grey’s Anatomy” that it already offers, Netflix added ABC’s “Switched at Birth,” “Alias” and episodes from past season of Disney Channel’s animated series “Kick Buttowski” to its streaming selection. Amazon.com also unveiled a content agreement with Disney on Monday that will let Amazon Prime subscribers stream shows from ABC studios, Disney Channel, ABC Family and Marvel.
A single hacker based in China launched a coordinated cyber attack earlier this year that compromised computer systems belonging to at least 48 chemical and defense companies, according to a new report from security firm Symantec. Computers belonging to these companies were infected with malicious software known as “PoisonIvy,” which was used to steal information such as design documents, formulas and details on manufacturing processes, Symantec told Reuters on Monday. The companies were not identified, but Symantec said the bulk of the infected machines were found in the U.S., Bangladesh and the UK and included some chemical companies that develop advanced materials used in military vehicles.
It’s no secret that Steve Jobs used to enjoy taking the occasional potshot at Microsoft co-founder and chairman Bill Gates. But Walter Isaacson’s new biography of the Apple co-founder, which was released shortly after he died earlier this month, reveals just how harsh Jobs could be in his criticism of Gates. In addition to calling Gates “unimaginative”, “weirdly flawed as a human being” and “fundamentally odd”, Isaacson quotes Jobs as saying “He just shamelessly ripped off other people’s ideas.” When ABC’s Christiane Amanpour brought up the comments in an interview last week, Gates dismissed the criticisms, saying “none of that bothers me at all.” He went on to praise Jobs in the interview. At one point, he even went so far as to claim he helped Jobs invent the Mac.
‘Steve Jobs,’ Steve Jobs, and me
I’m only through nine chapters of “Steve Jobs,” the Walter Isaacson biography on recently-deceased co-founder of Apple Computer. But I am already enthralled, way more excited than, say, the New York Times‘ Joe Nocera (more on that later).
I’m not going to critique the quality of the story-telling, except to say that I am finding it appropriately understated in the way a writer can get away with when the story itself is so compelling. Even though we knew quite a bit about the famously private Jobs, through Isaacson he reveals and confirms things we didn’t know, or only suspected.
This is to be expected in an authorized biography, especially when, as is the case here, the subject approached and then pursued the biographer. It is also to be expected that there would be some tension and mixed feelings on the part of the biographer, even one so studious a journalist as Isaacson. Unless the subject reveals something utterly horrible there is no way to disprove the negative, that you are helping to spin the story, rather than report it.
The Steve portrayed so far is meaner and nastier than I had imagined — and also infinitely more vulnerable.
Steve Jobs was supposed to be published a month from now, as iSteve. The release date was pushed up but it still didn’t reach print before Jobs died, three weeks ago. No matter. Jobs told Isaacson he wouldn’t read the book for six months, or even a year.
Surely, when he said that, even Jobs must have known that this was a bit of a reality distortion field fiction given what he knew and, more importantly, finally accepted about the true state of his deteriorating health.
Almost as I had began reading the book a funny thought came over me. I suddenly could not imagine this bio coming out when Jobs was alive. I am trying to imagine a world where Steve was still with us and this book was out, and I cannot. Not because it contains tell-all details of the Kitty Kelly or even Bob Woodward variety. Nor can I say exactly why that would seem … inappropriate.
Great insights, I haven’t read it up yet but I might check out the iBooks version (forgot that iBooks even existed).
Tech wrap: Samsung, Google scream for Ice Cream Sandwich
Samsung and Google unveiled the first smartphone running on Google’s latest version of the Android operating system, dubbed “Ice Cream Sandwich”, which combines software used in tablets and smartphones, as they step up competition against Apple. The high-end model Galaxy Nexus was unveiled at an event in Hong Kong, after being delayed last week as a tribute to the late Steve Jobs. “This will be our strategic product for year-end holiday season, as (Apple’s) iPhone 4S just came into the market,” Samsung’s JK Shin said.
The Galaxy Nexus features a 1.2GHz dual-core processor, super AMOLED HD 4.65-inch display, face recognition to unlock its screen,the ability to share content by tapping another phones equipped with a Near Field Communication chip, a camera boasting no shutter lag, and even a barometer. The global launch kicks off in November.
Twitter is looking for a director to bolster its board’s business credentials and diversity, and candidates include a former Google executive, a person familiar with the matter said. The search is in its early stages. But some names that have come up include Mariam Naficy, chief executive officer of paper goods company Minted.com, and Sukhinder Singh Cassidy, chief executive officer at fashion retail site Joyus and the former president of Google’s Asia-Pacific and Latin American operations, the person told Reuters.
EBay reported quarterly revenue that rose 32 percent and profit that matched analysts’ expectations. The operator of the largest online marketplace reported third-quarter net income of $490.5 million, or 37 cents a share, compared to $432 million, or 33 cents a share, a year earlier. Excluding stock-based compensation expenses and other items, profit was $628.2 million, or 48 cents a share, in the latest period, the company said. Revenue climbed to $2.97 billion.
The Kindle Fire tablet may be the hottest selling gadget this holiday, pressuring Amazon.com’s profit margins but giving the world’s largest Internet retailer potentially millions of new high-spending customers. Since Amazon CEO Jeff Bezos unveiled the tablet at a lower-than-expected price of $199 on September 28, some analysts have increased their sales estimates for the device. John Paczkowski at AllThingsD reported on October 6 that Amazon is selling over 25,000 Fires a day, citing unidentified sources close to the company.
The U.S. is pressing China to explain why its “national firewall” blocks so many U.S. companies from providing their services, according to a letter obtained Wednesday that is another sign of growing trade tension between the world’s two largest economies.”Having a presence on the Internet that is visible in China is increasingly a critical element for service suppliers aiming to reach Chinese consumers and business,” Ambassador to the World Trade Organization Michael Punke said in a letter on Monday to his Chinese counterpart.
Tech wrap: Apple misses, Intel beats quarterly expectations
Apple reported a rare miss in quarterly revenue after sales of its flagship iPhone fell well short of Wall Street expectations. The September quarterly report was Apple’s first under new CEO Tim Cook, who took over in August after co-founder Steve Jobs resigned. The company reported a net profit of $6.62 billion, or $7.05 a share. That fell shy of expectations for earnings of $7.39 per share.
One analyst blamed lofty expectations for the miss. “The reality is their business is not an annuity. They have to sell their quarter’s worth of revenue every 90 days. They had a big upgrade cycle with the iPhone, the numbers came in weak. They need to set records every time they report to keep the momentum”, said Colin Gillis at BGC Partners.
Intel forecast quarterly revenue above expectations, defying concerns that the growing popularity of tablets and a shaky economy are eating into demand for personal computers. Intel said revenue in the current quarter would be $14.7 billion, plus or minus $500 million. Analysts on average had expected current-quarter revenue of $14.23 billion, according to Thomson Reuters I/B/E/S. Intel’s processors are used in 80 percent of the world’s PCs but the company has failed to gain traction in mobile gadgets like Apple’s iPad and Google’s Android smartphones. It also increasingly depends on China and other emerging markets to make up for weak sales in the U.S. and Europe.
Yahoo’s net revenue and profit slipped in the third quarter, as the Internet company struggled to revive its online advertising business. Yahoo’s net revenue — which excludes fees paid to partner websites — was $1.07 billion, compared with $1.12 billion at this time last year, and in line with Wall Street expectations.
RIM said it will introduce souped-up operating software for its BlackBerry smartphone and PlayBook tablet designed to make both more formidable competitors to Apple and Google devices. RIM, which made the announcement at a developers conference in San Francisco, said it would install its new BBX platform in next-generation devices but provided no timetable.
Apple plans to shutter U.S. retail stores for several hours on Wednesday so employees can take part in a company-wide celebration of co-founder Steve Jobs’ life, a person familiar with the celebration said. Store employees in the U.S. will use that time to view a live broadcast of the event, which is being held at an outdoor amphitheater at Apple’s headquarters in Cupertino. The celebration — which will be held from 10 a.m. PT to 11:30 a.m. PT — follows a private memorial service for the late tech visionary at Stanford University attended by Silicon Valley luminaries, politicians and celebrities.
