The Apple Way

The Apple Way

by Jeffrey Cruikshank

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Reveals the master plan behind Apple’s revolutionary business model

“We don’t underestimate people....Rather than making a far inferior product for a hundred dollars less, we gave the people the product that they want and that will serve them for years, even though it’s a little pricier. People are smart; they figure these

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Reveals the master plan behind Apple’s revolutionary business model

“We don’t underestimate people....Rather than making a far inferior product for a hundred dollars less, we gave the people the product that they want and that will serve them for years, even though it’s a little pricier. People are smart; they figure these things out.” --Steve Jobs

The Apple Way divulges the secrets and management principles that keep Apple far ahead of the curve. Find out how to implement these and other winning strategies in your organization to trigger a technological and stylistic revolution of your own:

  • Make the customer and the product king
  • Balance manufacturing with delivery logistics
  • Motivate and inspire people outside the company to do your marketing and public relations
  • Invent new distribution channels
  • Decide on your company image and stick to your guns
  • Leapfrog the competition
  • Learn from both successes and missteps

Jeffrey L. Cruikshank is the author or coauthor of numerous books for practicing managers, including The Intellectual Venture Capitalist: John H. McArthur and the Work of the Harvard Business School (Harvard Business School Press). He also played a key role in developing several McGraw-Hill titles, including The Leadership Secrets of Colin Powell and The Essential Vince Lombardi.

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McGraw-Hill Professional
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The Apple Way

By Jeffrey L. Cruikshank

The McGraw-Hill Companies, Inc.

Copyright © 2006McGraw-Hill
All rights reserved.
ISBN: 978-0-07-226233-9



Marvels and Margins

Every prayer reduces itself to this: "Great God, grant that twice two be not four."

—Ivan Turgenev

This is the story of a company that—when it's good—is very, very good. And when it's bad, it flounders.

The good side of Apple Computer, Inc. is its products. They are good because they help people do their work more effectively and efficiently (in the case of the Macintosh computer), or because they help people enjoy life more (the iPod MP3 player), or both. Actually, these products aren't just good; they're great—insanely great—as Steve Jobs famously put it.

The bad side of Apple is that it's not much of a business. "The mistake everyone makes is assuming that Apple is a real company," commented Regis McKenna. "But it is not. It never has been." McKenna was in a position to know. His firm did Apple's PR for 15 years, and—for better or worse—helped make the company what it was.

Apple's strategy has been, consistently, a case of "too little too late." Until recently, its management has been weak at just the wrong moments. Its return to shareholders over time has been erratic, at best. A dollar invested in Apple in 1990 is worth (at this writing) about 75 cents, a 25 percent decline. The same dollar invested in the S&P 500 in the same period is worth about $1.75, a 75 percent increase. In other words, even after all the excitement generated by the iPod, and the associated upsurge in Apple's stock, Apple isn't yet worth as much as it was a decade and a half ago. In 1990, Apple owned 10 percent of the worldwide personal computer market. Today, its market share is under 2 percent:

Apple's apologists point out that luxury automakers like BMW, Lexus, Jaguar, and others command similarly small market share, and no one is predicting that BMW (for example) is on the verge of extinction. So why pick on Apple?

They also point out that Apple is the only integrated hardware and software personal computer company still in operation today. They point to the good things that flow out of that unique degree of integration: simplicity of use, consistency across software applications, and so on.

This gets us back to our starting point: Yes, Apple makes great products. But in the long run, that may not be enough.

Aladdin Meets Casper

The Mac operating system (OS)—the code that runs the Mac computer—is an amazing feat of programming.

The OS is a bit like the genie that comes out when you rub the lamp—and only when you rub the lamp. Or, it's like the friendly ghost that haunts the old Victorian pile that you recently purchased: all-pervasive, but never intrusive. Aladdin and Casper, at your service.

I can cite two examples from my own experience. First example: I purchased my first digital camera several years back. I asked the salesman what else I needed to buy to make the camera talk to my Mac. "Nothing," he said, with a shrug. This didn't seem possible. I had read something, somewhere, about how there was a device called a "dock" that had to sit between the camera and the computer. But, because he didn't seem to want to sell me anything else, I paid for my camera and left.

I took a couple dozen test shots, without much faith in the whole process. Then I plugged the camera into the back of my PowerBook using the cord that came with the camera, turned the camera on, and waited to see what would happen.

First, the little iPhoto icon at the bottom of my desktop screen started bouncing up and down lazily, as if it had just woken up from a nap. Then the iPhoto screen showed up, with the multicolor revolving pinwheel in the middle that tells me to be patient; my Mac is doing something. Then up came a little dialogue box that told me that there was a Canon PowerShot G2 attached to the computer, with 25 images on it; would I like the computer to download those images?

I hit the "OK" button.

Then another dialogue box asked if I'd like the Mac to erase the pictures from the Canon as it went along. Again, I hit "OK." A minute or two later, the photos were downloaded into a date-stamped folder, ready for attention from me, and the camera's memory card was empty—ready for my next photo shoot.

Second experience: My daughter's little white iBook started getting flakey in her senior year of college, after about three years of hard use. Since she was soon to go out into the workforce, we had the discussion that lots of Mac users have had over the years (especially in the dark days of the 1990s, when it looked like Apple truly was on the verge of extinction). Time to switch to a Wintel machine? In other words, is it time to join the 90-plus percent of the personal computing world that takes its marching orders from Windows and Intel?

Since she was then aiming at a teaching job, it didn't seem likely that she'd have to migrate to Wintel for her professional needs. (Schools tend to be Mac- friendly.) Plus, she really liked her iBook: small, smart, fast, intuitive. So, on a given Saturday morning in November, we decided to go buy another iBook.

The CompUSA salesman assured us that if we bought an accessory called a "FireWire," it would be easy to transfer files from the old iBook to the new one. "A snap," he promised. Uh huh, I said to myself. I'm no techie. I was already dreading what promised to be a terrible job—reloading software, moving files, recreating Internet transfer protocols, and so on. Mentally, I set aside the weekend.

When I got home, I plugged the FireWire—basically, Apple's name for an external bus standard called IEEE 1394, which is not interesting for our purposes—into the appropriate hole in the back of both iBooks. (There's only one hole it fits in, and anyway, there's an identical symbol on both the computer and the cord that tells you where the cable goes.) I turned both iBooks on, and held my breath.

Up came a dialogue box on the new machine, which said something to the effect of, "Oh, look. I see another machine just like this one, connected to this one. Would you like to recreate that machine on this one?" After checking two or three times to make sure I was copying from old to new, I hit the "yes" button. The little multicolored pinwheel spun around a few times; then another dialog box came up. It said something like, "This will take approximately an hour and 45 minutes. Please make sure both machines are plugged into an external power source." I did, and then hit "OK." Both machines started whirring quietly. There wasn't anything else to do, so I went for a walk.

An hour and a half later, I came back, and the second machine was an exact duplicate of the first, screen saver and all.

What do these two stories mean? It means that somebody out in Cupertino anticipated exactly these sequences of events, and prewired the computer to handle them in a way that even a technophobe could handle. And there must be thousands of similar stories that could be told. Unless you're a true computer nut, you're unlikely to even scratch the surface of what lies buried in the Mac OS. For example: Mac users tend to use a one-button mouse, because that's what Apple has favored for decades. Windows users are accustomed to a two-button mouse. So, what happens to those brave Windows users who buy an iPod, succumb to the so-called "halo effect," and buy a Mac as an (expensive!) iPod accessory?

Well, they can plug in a two-button mouse, and it will operate exactly as it did in the Windows environment. Why? Again, that's because somebody out in Cupertino prewired it to act that way. They

Excerpted from The Apple Way by Jeffrey L. Cruikshank. Copyright © 2006 by McGraw-Hill. Excerpted by permission of The McGraw-Hill Companies, Inc..
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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