Is Steve Jobs Repeating His Past Mistakes?

One of my very favorite writers, Robert Wright, had an interesting Opinionator post at the NY Times site this week, which revolved around the question of Steve Jobs' alleged lust for power and why he was making the same mistakes with the iPhone that led to the Mac losing out to Microsoft in the late 1980s. I quote at some length:

The Microsoft approach harnessed positive feedback. The more models of Windows computers, competitively priced, the more people would buy Windows computers. And the more Windows computers people bought, the more programmers would write their software for Windows, not Apple. And the more Windows software there was, the more attractive Windows computers would be. And so on. That’s how Windows wound up with around 90 percent of the desktop operating system market.

With the iPhone, Jobs is again forgoing this positive feedback. He’s not licensing the operating system to other handset makers. There’s only one kind of iPhone — love it or leave it.

Meanwhile, Google is following a variant of the Microsoft strategy…. Why is Jobs choosing the same path that, last time around, kept him from conquering the world? I had puzzled over this for months until I had a conversation with tech-watcher Harry McCracken, who suggested a theory that seemed outlandish at first but is making more and more sense to me: Steve Jobs just isn’t bent on world domination.

I think there is some truth to what Wright is saying here—everything that Jobs has ever done in his career has suggested that he loves great products more than market share. (Though I'm sure he's happier with both.) But I think there is another factor here worth considering.

I'm not so sure that Jobs thinks his Macintosh strategy failed. I think the way Jobs looks at it is this: he built a beautiful, revolutionary machine in the Macintosh, attracted incredible hype for it and passionate early adopters.

And then he got fired.

I'm sure somewhere in Jobs' head he thinks that if he had been running Apple instead of John Sculley, the Mac could have out-innovated and out-marketed Microsoft through the late eighties and early nineties, and kept Windows from dominating the planet. In other words, it wasn't that Apple erred in following the closed platform strategy. They erred in that they had the wrong guy running the company. That may well be delusional, but the fact that AAPL now has a larger market cap than MSFT, twelve years after Jobs' return to Apple, has to give one pause. So in Jobs' mind, I suspect it's not that he's making the same mistake all over again. Instead, he's proving that his original decision wasn't a mistake in the first place.

Comments

[Cyndie Gandy]

He is making the same mistake all over again. It's not that he's not bent on world domination, its that he's really not a "numbers" man. He is obsessed with the product itself rather than how much it sells. I am very anti-apple myself and I am very pleased with my Android.

[Peter von Elling]

I think Steve Jobs doesn't care. He and his employees have enough money; they are far more profitable selling quality products than moving junk out the door at high volume; and he still dictates the direction of technology in the market. Apple didn't invent personal computers, digital music players and tablets, but they built products that made them popular. Apple moves the market with 8% share much more than MS does with 90%. He may be willing to give Google 90% of the mobile market, as long as he has enough to push the technology the way he wants it. Apple is elegant in that it just needs a lever to move the mountain, not a fleet of bulldozers.

[fredo]

I am so sick of hearing about Steve Jobs and his motivations. There is other stuff happening in the world!

[T. Faust]

I would love to fail the Steve Jobs way: most valuable tech company in the world.

[Stephen Kirk]

It's a matter of record as Jonathan Ive stated at London's Royal College of Art's innovation lecture:
Apple exists to make really great product - Apple stands for something and has a reason for being that isn’t just about making money...
That's what they do: ease of use & simplicity - that's why I live and work on Apple - it's an authentic tool for life, simple as that.

[Ben]

In a way, Mac failed because they literally stopped improving it, or failed numerous times (e.g. Star Trek project). That's not the case with the iPhone though.

Let's face it, Android won't be the Android you know today without the iPhone.

[Ben]

Another successful example of one OS one manufacture approach is RIM. They are literally untouchable in the smart-phone market.

To regular customers (like my girlfriend), there is the iPhone and Blackberry. Android? it's also an iPhone.

[Justin Reese]

Cyndie:

[...] he's really not a "numbers" man. He is obsessed with the product itself rather than how much it sells.

Seriously? Apple's stock price, operating profits, cash on hand, and market share are at an all-time high. Their profit margins are the envy of the industry. How do they not care about numbers?

I think you mean they don't care about market share, which is true to an extent. Apple cares greatly about anything that increases profits. When increasing market share does that, great, but if it come at the expense of profits, it's a pointless number.

[Scottag]

If Apple had the wrong guy at the helm, then why did NeXT fail?

[joe c]

RIM is barely profitable. So they're successful with their customers and not as a business.

Apple's never been about owning the market. it's just been about making the best most well thoughtout devices out there. So like RIM they started out popular with their base and not so much with stockholders. but then people finally started to come around rewarding them with both respect as well as marketshare.

In retrospect, I'm glad Apple was on the brink back when everyone called it "beleaguered" and also that Microsoft got little more than a slap on the wrist during their monopoly trials. I can just imagine how the Softies would howl and whine nowadays if Apple was doing well because they'd be convinved it was only becaus MS was broken up.

[Woochifer]

It's not the number of units that matter, it's how much Apple makes with each unit that they care about. That's what differentiates the Apple model from what Google and its partners are trying to do with Android.

Apple got its high cap value because it successfully maintains very high margins. With commodified electronics hardware, you can only do that by creating a high level of product quality.

You can make an argument that Android product quality is comparable, but I seriously doubt that the margins for Motorola, Samsung, HTC, et al are anywhere near Apple's. And Google is basically giving away the Android OS, so they don't directly make any money off of it (it's only through the back end with their ad services that they generate any revenues).

[kickstand]

@Scottag: NeXT didn't fail. NeXT got bought by Apple, the NeXTStep operating system became OSX. Essentially NeXT absorbed Apple, although people see it the other way around.

[RidleyGriff]

The problem with the "repeating the same mistake" meme is that we can't really know if his strategy was a mistake or not -- because he didn't get the chance to implement it the first time around.

Maybe his strategy would have been successful; maybe it would have yielded the same result. All we know is that Apple, post-Jobs, followed a path that allowed Microsoft to achieve domination. And it is that domination that has determined their strategy "superior".

If anything, we are going to see a battle between dueling philosophies For The Very First Time.

[Luis Alejandro Masanti]

Steve Jobs learned from its own mistakes!
Remember that he hired John Sculley and give the CEO.
I think he also convinced Gil Amelio to be part of Apple... and then he detroned him.

What he learned! That he must be in the top to be able to fullfil his dreams.

[nojo]

"In a way, Mac failed…"

When? I've owned Macs since 1991. Couldn't be happier.

Or do you mean "failed to beat Windows" or "failed to achieve market dominance"? Well, fine. I don't recall that affecting my ability to earn a living on these critters.

[His Shadow]

"I am so sick of hearing about Steve Jobs and his motivations. There is other stuff happening in the world!

Posted by: fredo"

Is that why you are on a tech blog, actively reading content about Apple?

[His Shadow]

NeXT got bought by Apple and helped make Jobs a billionaire, and NeXT developed software got Dell on the web. And OS X is for all intents and purposes NeXT. Your point?

[David]

I thought it was more that he gained a lot of experience by having to leave Apple.

[David Emery]

Interesting article, caused me to do some serious thinking. A lot of what happened to Apple after Jobs left is that product quality went to hell. I've talked to a lot of people who abandoned the Mac because MacOS sucked (and the hardware wasn't all that great, either.)

But I'm not convinced that Apple with Jobs rather than Scully, et.al. would have been the big success it is now. I really think Steve needed some time in the wilderness to get focused.

But I agree with those who believe that Apple's happy to be an innovator in minority, even niche markets (proof: Apple TV :-) And I'm very much OK with that. There's room for alternate approaches, particularly -quality- alternatives. 'quality' includes both technical reliability (which Linux has achieved) and sufficient usability (still a big weakness for most Linux distributions.) I'm going to enjoy the competition between Android and iPhone, I think it's A Good Thing.

Wasn't it Jobs who said "It's not the Microsoft monopoly that bothers me, as much as the mediocrity of the product."???

[His Shadow]

This article is spot on. Sculley purposefully abused the Mac brand to get the highest possible margins while actively resisting upgrading and moving the hardware forward. Just like a salesman handed a successful brand usually does.

And Jobs called this as well...

http://www.businessweek.com/bwdaily/dnflash/oct2004/nf20041012_4018_db083.htm

"Steve Jobs: Apple had a monopoly on the graphical user interface for almost 10 years. That's a long time. And how are monopolies lost? Think about it. Some very good product people invent some very good products, and the company achieves a monopoly. But after that, the product people aren't the ones that drive the company forward anymore. It's the marketing guys or the ones who expand the business into Latin America or whatever. Because what's the point of focusing on making the product even better when the only company you can take business from is yourself? So a different group of people start to move up. And who usually ends up running the show? The sales guy... Then one day, the monopoly expires for whatever reason. But by then the best product people have left, or they're no longer listened to. And so the company goes through this tumultuous time, and it either survives or it doesn't.

BusinessWeek: Is this common in the industry?
Steve Jobs: Look at Microsoft -- who's running Microsoft?

BusinessWeek: Steve Ballmer.
Steve Jobs: Right, the sales guy. Case closed."

http://www.businessweek.com/bwdaily/dnflash/oct2004/nf20041012_4018_db083.htm

[PXLated]

The other problem with the Apple/Microsoft PC comparison is that back then, computing was "business" computing. The consumer marketplace was very, very small. IBM was business computing, their account reps kept their companies true blue. Once IBM introduced their PC and handed the golden goose to Microsoft the rest was history. Apple, no mater closed or open was not business computing. Within companies it was going to be PCs and once people started buying their own, they generally bought what they had at work. No company (Apple included) stood a chance.

Now things are being directed more from a consumer position and that's where Apple shines. Consumers just want things to work and don't really care about open or closed.

The whole open vs closed argument using history is just a canard.

[His Shadow]

"I am very anti-apple myself..."
Posted by: Cyndie Gandy"

So what?

[Paul]

The PC market in the mid-80s to mid-90s was totally different from the smart phone market now. How many of you were around and interested in tech back then? I worked for a software company and even among my co-workers, personally owned PCs were rare.

Almost all those who bought a PC back then really were geeks (sigh, yes, I know ... there are always exceptions) and wanted something they could control completely themselves. Now, the geek market is about the same size, but the non-geek market is many times that.

My wife for instance is a very intelligent but non-technical person. She is the kind of person who has uses for an iPhone/iPad type device, but she couldn't care less about multitasking or whether she can put apps on it from outside an App store. She just wants it to work without her having to learn anything that might get in the way of her using it.

Despite the impression you might get if you read many tech blogs, most people are like her (maybe not as smart though).

It's not going to come down to "closed vs open". It'll be price and ease of use. And from what I can tell, most people find the iPhone easier to use, and it's not much more expensive (if at all) than the competitors.

[Joe]

In Steve Jobs mind, I'll bet he thinks that if Apple hadn't let Microsoft clone the early Mac OS, then Windows would have taken years longer to come to market, during which time Apple could have solidified their lead

[Kelly]

@kickstand: You're absolutely right. Apple bought NeXT, but in reality NeXT took over Apple, and got paid for doing it.

In a possibly related example -- Disney bought Pixar, but who is now running Disney animation? John Lasseter, the Number 2 guy at Pixar.