Leopard's Delay is a Leadership Failure
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by
April 17th, 2007
"You do not lead by hitting people over the head - that's assault, not leadership."
- Dwight D. Eisenhower
On April 12th, Apple announced that Mac OS X 10.5, Leopard, will be delayed from the original "Spring 2007" ship date. Now it won't ship until October.
Considering that Apple had until June 21st (1806 UT) to ship Leopard, this is only a four month delay. In terms of OS releases, in general, this is no big deal some have said.
Well, yes it is.
It's actually a big deal because Apple had it within its power to avoid this setback. The press release gave a hint why something like this delay came to pass.
OPEX Bugaboo
Apple, despite being a large and wealthy company these days with likely more than 18,000 employees, is actually a very lean organization. And that lean configuration has been maintained, even though the demands of the iPhone, the Apple TV and Leopard would have suggested a moderate increase in staffing.
Despite all better judgment, Apple hates to ramp up to meet these kinds of expansions in the product profile. There are several reasons.
First, Apple hates to increase what's called operating expenses, "OPEX". You'll hear Tim Cook talk about this at Earnings Calls. It's a Silicon Valley obsession that as OPEX goes down, profits go up. Wall Street loves this. Investors love it. CFOs love it.
The effect is that it's virtually impossible for an Apple manager to significantly increase their staffing based on their own judgment. Instead, each year, managers are asked to figure out ways to maintain or reduce their OPEX.
As a result, when a product comes along, like the iPhone, that's based on Mac OS X, human resources remain constant while the demands of coding and QA grow and grow.
Secondly, there is a well-known industry adage that if you want to double the time it takes to finish a coding project, double the number of coders. That's not a humorous aphorism; it's been shown to be true in numerous projects from the past.
However, in this case, the Apple statement reveals more elements of the truth. It's not OS coders that were required but Quality Assurance testers. When a company wants to ship a quality OS, letting the customer be the beta tester is simply unacceptable.
So what's wrong with hiring testers? It's a boring job. Not many people are qualified to be professional, patient, ingenious code testers. It's the bane of software development.
Even so, who wouldn't want to go to work for Apple just to test the greatest OS ever developed by man? Professionals who can do the job are rare, but they're out there in Silicon Valley.
If only the managers had the hiring authority. They don't.
Leadership
There was a time when Apple was in that famous, flat, $6B Valley of Death in total sales. It seemed to go on forever. Apple was, around 2001, a niche company with a niche product line. It was fairly depressing, and everyone at Apple was waiting for millions of customers to someday wake up and realize that Mac OS X was the best OS on the planet and stampede into Apple's arms.
It didn't happen.
It didn't happen because everyone was so happy to have Apple rescued by Mr. Jobs that nothing else got done in terms of preparing for the future. It was if all would be well. Besides, Mr. Jobs has a history of being allergic to secondary managers who are powerful and capable. That ended up hurting Apple.
Then Apple got very lucky. They stumbled onto a product called the iPod that just happened to create a whole new market in which Apple could turn the tables on Microsoft. Market momentum didn't have to be overcome. Instead, good old fashioned business savvy by smart people was sufficient to trample Microsoft.
The iPod success further delayed any suspicion that solid leadership at the ordinary VP level was missing.
On the other hand, with the Macintosh, it was Game Over. There was no action Apple could take that could raise its Macintosh market share from single digits into healthy double digits. Even today, Apple suffers from cyclic sales from month to month, quarter to quarter. Up one month, down another quarter. While sales generally go up over the long term, a fabulously successful company like Apple appears to have no reasonable justification for not having continuous, sustained incremental growth in the computer market. It's a symptom of constrained resources for constrained middle management.
With the iPod, Apple has been able to supplement their income considerably and hide these effects. In 2007, they've assumed the trappings of a consumer electronics company. Consumer electronics companies, live by different standards in the market place.
While Apple Macintosh proselytes have patiently walked through the fire pit, consumer electronics customers are of a different breed. It's great that Apple has restricted choice and simplified the integration between Mac, iPod and Apple TV. But it's not so great that Apple is trying to reinvent two industries with staff that are constantly exhausted and constrained by marketing and finance groups. Product delays in CE are not well tolerated and result in defections in a fast moving market place.
Worse, in an age of partnerships, it isn't really an option to tell AT&T, sorry, the iPhone is going be late and your own investors and customers are going to raise hell. Welcome to the CE industry.
And yet, Apple's organizational structure didn't change to meet these new challenges. The assumption was that whatever worked in the past must be good for a consumer electronics company as well. In short, Apple has pretty much the same organizational structure that weathered the $6B Valley of Death during which the executive team longed for salvation.
Apple could have avoided this Leopard delay with good old fashioned management leadership. They could have allowed themselves to grow and mature a little. They could have empowered their key VPs to figure out what it would take to ship Mac OS X/Leopard on time, with excellence and exercise some authority. Unfortunately, many of Apple's key VPs aren't Lieutenant Generals. They're Lieutenant Colonels.
The Fallout
Now, Apple is going to take some serious hits from analysts, investors, and even the PC camp.
Confidence that Apple is putting the pieces into place to become a major consumer electronics giant is being shaken.
PC customers who may have been tempted to move to Leopard, touted as the salvation of the PC customer, will now start to get the idea that all modern OSes suffer from these symptoms.
No good can come from Apple's failure to plan ahead, ramp up, and allocate its money and resources more vigorously.
Climbing out of the Valley
Alas, Apple's psychology and operating style is trapped in the $6B Valley of Death syndrome and not moving into a 21st century consumer electronics company that's poised to move from $25B to, perhaps, $40B in just a few years.
To get there in good shape, Apple will have to spend some money on something besides a half billion dollar new campus, forget the ghosts of the Michael Spindler and Gil Amelio eras, empower their VPs, and let their VPs become responsible for their own products, staff and OPEX.
Every individual has his management limits based on skills, temperament, and experience. Any guy or gal can start a home business and manage $250K a year. When the business grows to $1M, outside expertise is often required. A manager who can run a $10M private company is out of his league as the CEO of a publicly held $100M company. And so on, up the scale.
In a few years, Apple could be easily six times bigger than it was in 2000. It's high time for the kinds of people, organization and authority that is calibrated to that size consumer electronics company.
Let me put it more bluntly.
Leopard will be late. It's stuck in the Valley of Death. It's going to require some cast-iron, sonofabitch, take-no-prisoner "Generals" on the product teams with power and authority to make sure this kind of failure doesn't happen again.
If Mr. Jobs will allow it.
John Martellaro is a senior scientist and author. A former U.S. Air Force officer,he has worked for NASA, White Sands Missile Range, Lockheed Martin Astronautics, the Oak Ridge National Laboratory and Apple Computer. During his five years at Apple, he worked as a Senior Marketing Manager for science and technology, Federal Account Executive, and High Performance Computing Manager. His interests include alpine skiing, SciFi, astronomy, and Perl. John lives in Denver, Colorado.
Hidden Dimensions Archives.
Observer Comments
but there are two sides to the coin, and as an investor, I'm glad I don't take this grim view.
Is it a snag? Yes. Is it "life threatening" for Apple? Heck no. A 4 month delay for what is actually a very SMALL company at 18,000 (compared to Apple's rivals that number in the 100s of thousands), this isn't that big. In fact, Apple still is a niche player. Probably THE niche player as it goes. It does try to be all things to all people, yet doing so on a lean budget and OPEX.
Apple doesn't have to aspire to greatness, it's already there in terms of products. It will have to continue to grow some in personnel it expects to keep up with the demand for products.
Talk about a bad growing pain? Awe, darn!
How long did Apple fiddle around with Copeland until they finally went with OS X based on NeXt? Years?
I'm still using OS X 10.3.9. How important are new OSs to a HARDWARE company? What compelling reason is there to finish Tiger other than they said they would? To fix the security and useability problems? Oops, that's that OTHER company which is a SOFTWARE company not a hardware company...
Maybe John isn't aware, but Apple is a hardware company. Tiger is software. iPhone is hardware. If I were primarily interested in selling hardware, where put I concentrate my resources? hmmmmm...
I couldn't agree more. The danger for Apple is not just the health of its' CEO, but the CEO himself. He has been and still is a good man for the company, but the danger is that he becomes Apple. I think Microsoft suffers a lot from the same syndrome with their Chief Great Software Architect or whatever the ludicrous, North-Korean style title Mr. Gates has given himself. When he retires and that chair-throwing bully does likewise, Microsoft may well be the innovative company so many have been led to believe it has been, instead of the corporative bully it is, smart only when it comes to business tactics.
Mr. Jobs is probably still stuck in the times he went in clinch with the Invincible Omniscient Software Architect of God's Mercy, but he should realize that the times they are a-changing and that it is about time to find the ones he should delegate responsibility to. He should be wise enough to do so. Let us hope he will realise the need for it.
While this article provides some valuable insight, I think it makes assumptions that do not necessarily apply to the case at hand. First, it assumes that because Apple could not meet its schedule that the reason was that not enough staff was hired to perform quality control.
That is a very big assumption. The case could be that Apple effectively planned the utilization of its resources, however, something occured that was not planned. For instance, my theory is this: Apple did not plan to announce the iPhone at Mac World. If correct, a lot of things makes sense and follows from this.
The evidence: First, Apple like never before was hit with rumor sites, analyists, and respected publications, like the Wall Street Journal, acting as if it was a sure thing that the iPhone would be announced at the January show. If Apple hadn't released something, Apple's stock, which built up for the expectation, was going to take a big hit. Think what you want, but Apple, like all companies, want to protect their stock price. Especially at a time when the company is being investigated by the SEC. Second, Apple's pre-announcing the iPhone was highly out of character for Apple. The reason Apple stated does not make sense: namely it pre announced because of its upcoming FCC filing. Fact is, companies like Apple can and do have various means at there disposal to hide their names for such filings. Third, when Apple announced, Cisco was very surprised that Apple abruptly ended what up until that point had been harmonious negotiations. Why would Apple suddenly do this, when Cisco and Apple quickly worked out a deal after Apple pissed Cisco off. Certainly, it could have worked out a similar, or even better deal before announcing. Fourth, contrary to Apple's claim that the iPhone was largely completed, most reviewers noted that the OS still needed work and Apple closely supervised the reviewer's time with the iPhone.
Assuming, Apple unexpectedly pre-announced the iPhone because of market pressure, or some other unthought of reason, Apple would have had to suddenly shift resources from Leopard to the iPhone because the same engineers would be creating the development of the OS on both products. Apple now would be under tight time constraints because it had two pre-announced products when it only originally planned to publically announced a shipping time frame for Leopard. Now that APple announced both products, Apple understands that the market would forgive Leopard being late, but not the iPhone. It is also possible that engineers thought when both products were announced that the deadlines could be met.
If Apple pre-announced unexpectedly, or under advice from the engineers, poor staffing management is not the issue. For instance, when I plan to go to work, I usually leave myself an extra twenty minutes to account for unexpected delays. If my vehicle was suddenly hit by another car, and I thus became unable to make it to work on time despite my responsible time management, you would not say I managed my time poorly. Similarly, if Apple faced a signifcant enough unexpectancy, poor staffing mangement would not be to blame.
Keep in mind, Apple likely would have had the proper staffing to meet its needs if it did not pre-announce the iPhone because it could have limited resources on the development of the iPhone's OS and pushed back the internal ship date since it would have been an unannounced product.
Wow John, usually I think you're spot on, but I don't agree with most of this.
I work at another fortune 500 company that is also pretty 'lean' compared to our revenue. (Software company with around 5000 employees) and the situation you describe because of OPEX is VERY common. It's a consequence of how a publicly traded company that is ultimately beholden to the shareholders and the whims of wall street analysts, for better or worse, operates.
Let's put the Leopard delay in perspective:
1. For everyone that is complaining that 'this looks bad because Apple has ragged on Microsoft about delays, etc..' Microsoft delays YEARS. AND then UNDERDELIVERS. This has been a pattern for well over a decade. Apple has been on an incredible roll for underpromising and overdelivering. If a delay of 4 months for something as critical to the use of my Macs as the OS ensures that it works as advertised is nothing. Now IF it's delayed 4 months and then there are massive problems, THEN you have a call for some of your points.
2. Why is everyone so impatient for Leopard? For the features that we know of (Time Machine, Spaces, new iCal, etc...) a lot of these are really cool, but their absence isn't keeping the majority of Mac users from doing anything. And as for the super-secret features, well we don't know what they are. We can't honestly be held up by things we don't even know are coming. Tiger is still years ahead of Vista. It does everything I need it to do. I started out on Apples (II+, IIe & original Mac) but I was a PC user for a very long time. Until I just couldn't take the instability, viruses, spyware and just all around crap quality. I'm also a musician and video artist and let me tell you, you don't understand stress and fear until you gig with a windows laptop. (Nothing quite as bowel shaking as a blue screen of death in the middle of a performance let me tell ya). Ever since I switched to Macs (And since 2005 I've bought a G4 mini, Powerbook G4, Mac Mini Core Duo and MacBook Pro. As well as bought a few old G3 iMacs off of eBay that I repaired and I'm replacing my main recording system next year with a Mac Pro) I have NEVER had any problems with the exception of one bum hard drive and one aftermarket RAM module. Tiger does what I need it to do, reliably. I can wait a few months for Leopard.
We already know that M$ zealots are going to try to seize on this, but they need to rebutted with a sane perspective on this (See point 1). And some analysts are going to bitch too. (Though many already have stated their agreement with the decision). And of course we know the M$ Press drones (Dvorak, Thurott, etc...) are all going to point and spew as usual. But I really would not have guessed you of all people would add fuel to the fire.
Leadership failure? Time will tell. But let's leave the sensational headline to the drones shall we?
Tue Apr 17, 2007 9:16 am Subject: Surprising analysis - That was me
Sorry, didn't realize I wasn't logged in and I don't like to post anonymous.
One additional comment to point 2 is that I think a lot of the community complaining about this is we like our new shiney Apple toys. So anytime one gets pushed out that we already know about, we complain. But again, put that in perspective.
-Mobi
A string of assertions, each having some (or little) truth-value, does not a cogent argument make.
You could assemble these same factoids into the opposite conclusion: by keeping a tight rein on hiring--ill-advised ramping-up, by the way, is the beginning of the end for *any* company foolish enough to try it--and by prioritizing the release of the higher-profile, consumer-oriented iPhone--knowing full well that Tiger is an extremely capable OS--Apple is doing everything right: the OS X base is going nowhere; there'll be minimal impact on Mac sales; the on-time delivery of the iPhone will cause a rather pleasant bunch of "synergies" whose fruit Apple will reap for a long time to come.
Is this any more cogent than Chicken Little's argument? No; but it's at least as plausible. When did journalism substitute whining for intellectual rigor?
The standards for Apple are WAY higher than for many others. Plus, fear that the old "beleaguered Apple" is just one bad quarter away from a death spiral cause people to jump out of windows when a VERY PUBLIC company has a relatively normal resource leveling problem.
MS delays for months and years, and then ships a buggy product. People then wait for the service pack to fix the bugs, when the service pack should have been the actual final release product.
I think the only mistake Steve Jobs made is promising "secret" features. All of the Apple fan-boys (myself included) want to get our hands on the secret stuff ASAP. So we are disappointed. And that is the main problem.
I have to agree with Terrin. For me, it seems obvious, that Apple knew that after being forced to pre-announce the iPhone, that as a consumer electronics item; the iPhone MUST ship on time. Transferring resources from OS X to work on the OS X operating system for the iPhone was necessary; and far better to have Leopard be delayed than iPhone.
I'm disappointed that Leopard won't ship in the summer, but all in all, its not that big of a deal. After a few years of continuous, annual upgrades, it feels nice to have a bit of a breather. That doesn't dampen my excitement for Leopard any, but does allow me to think, maybe I'll buy that new laptop in Sept/Oct rather than Jul/Aug. Only downside, I see to the delay, is that Apple couldn't time it to match up with the beginning of new school year. Releasing Leopard during back to school purchases would be cake.
iPhone is the CE product, Mac OS X Leopard is still software. Apple making the decision to not delay iPhone in favor of Leopard, tells me they have their heads in the right place; even if I agree that they do have to grow a bit more.
Your columns are usually worth reading because they're a departure from the typical drama that accompanies stories like this. Unfortunately, this time you chose to make an exception and contribute to the hype.
Leopard being late is not the end of the world. As an investor in Apple, I think they made the tough, but correct choice here.
So Apple's problem is that they need more empowered management leadership? That's very specific. Very insightful. I assume the shortage of talent in Northern CA was taken into account here? As others have pointed out, this is all just assumptions based on opinions which are obviously based on limited information.
I agree with the Guest who talked about keeping tight control over hiring. Your comment about doubling release times if you double your engineers typically results from hiring a bunch of idiots. The key is to take your time and only hire talented individuals. This shows that quality (both of your products and your organization are a priority). I appreciate those who take that approach. Beware the types that would hire anyone just to say they met their staffing requirements. Beware the types that would push crap to market before its ready just so they can say they met their target date.
I guess what I am trying to say is that MY opinion is that this shows Steve is still in control and willing to do what it takes to strike a balance between AAPL's business goals and keeping quality as a top priority. In other words, the Leopard delay shows the STRENGTH of Apple's leadership. But this isn't based on any inside knowledge of Apple, so take it with a grain of salt.
Articles like this, whether you agree with the author or not, are always going to be subject to debate due to the lack of transparency that Apple exhibits at all times with regard to what is going on behind their closed doors. What's going on in there from day to day is just not something we're ever going to have access to, so we're all just going to be sitting around and reading and rereading the few explanations that Apple does provide and scratching our heads and wondering just what is going on. So we all might as well not dwell on things and go for a nice long walk if the weather is good or pick up a book and learn something new and when Apple does something it will be a nice surprise.
First, Apple's costs have been increasing. From 2Q03 to 2Q05, it was in the $119-125M range. From 3Q05 to 4Q05, it was in the $145M range. From 1Q06 to 1Q07, it's been in the $175-185M range. That's significant growth in employees since 2Q05. So I think you're wrong.
There's lots of other things that could've happened (mentioned by others here or on other web sites) to cause the delay that you didn't seem to account for.
So since we're just speculating, I think it's highly possible that Apple made two decisions based on information since Jan that made them favor the Leopard delay:
1. Open up the iPhone to more developers so as to have more software available upon release, thus requiring more support from OS, including QA, engineers.
2. Spend more time to get Leopard more fully developed and debugged because Vista has turned out to be relatively insignificant competition (in other words, no big jump over XP). And by more fully developed, I mean, those "top secret" features that Jobs didn't introduce.
This is so bogus - why are people running around like chicken littles? Leopard has been worked on since Tiger was released, just about 2 years ago. A 4 month delay in something taking ~24-28 months is not unusual. I think people are only shocked because of late Apple has delivered software on time for every OSX release. This is so not a big deal.
I would like to see the author back up some of the underlying assumptions being made here. He paints a picture of a "stuck" apple, going nowhere before the iPod hit, when all other research I have seen suggests a steady year by year rise since the introduction of OS-X. He maintains that it's quality assurance failures, management failures, and (as usual), the particular management style of Steve Jobs, all with the scantest of evidence.
I'm not saying he might not have a point in some respects, but he simply presents no evidence of this. Since what he is pushing here is a rather "alternative" view of things, there is a requirement for something more than opinion.
Clearly, Apple has had some small (and so far very rare) problems with goal fulfillment in 2007, but to categorize it as some kind of endemic or systemic problem on basically no evidence is going a bit far. If you take into account the sheer number of products they are doing this year that alone is ample explanation for the slight workload problem we have seen.
Finally, judgments made about how fast Apple "should" have grown in the market that don't even mention the competition from Microsoft are specious at best. Coming from relatively zero in 2001 to challenge the 95% or better market leader (MSFT), for key market segments is a *success* story, and one that was accomplished with the exact management style and leadership that they have now. If one is to argue that this same management style and leadership is now failing them, something more than just "that's the way I see it" is required for the argument.
....With the title. Some of the assumptions in the article are debatable and highly opinionated. But if you simplify the whole situation, it boils down to:
"The dog ate my homework."
Apple didn't start working on the iPhone in January... they have been working on it for over 2 years (Steve claimed when he announced the product). Leopard has been in the works for likely just as long. How is it NOT a leadership failure to get products released on time? Isn't that what leadership is all about? They knew what they were up against, even if the rest of the world was in the dark about the iPhone until January.
I don't think the sky is falling, but blowing a product release date by that far is a pretty big deal in just about any company, and it is a sign of poor planning IMO.
1. Apple was inherently required to let the cat out of the bag when it went to the FCC, due to the FCC's mandatory public disclosure rule. IMHO Apple made the only sensible decision - control the information by pre-announcing, considering the only alternate was to let the FCC do the pre-announcing.
Patent filings are public too, and a lot of the iPhone technology was already revealed through that channel. The FCC filing was simply supplying the device that was using the patents.
2. What appeared to have happened is that two major independent product groups happened to be completing at the same time. This is more the case of the iPhone moving along quicker than expected than anything else, would be my guess. When you're dealing with a major, game changing product, completion times are rather hard to predict. And clearly the came changer takes priority and will be given everything it needs. Apple's focus here indicates, IMHO, that it is focused on growth, and leaving the 6B Apple behind.
I am also struck by the fact that Leopard has taken longer than other releases of OS X. Is this because Avie has left? Perhaps, altho for Apple's sake I hope not. Maybe its because there is more to Leopard than prior releases? And that Leopard is going to really push the envelope with its secret stuff? After all, there is competitive pressure from Vista, finally - what a great time to move the goal posts.
3. Apple now has a situation: should they have two major product announcements at the same time, which invariably diminishes the buzz and reduces market focus or should they drag them out?
In other words, I don't think it was as much about staffing as it was about managing the buzz. I have no doubt that staffing was somewhat of an issue, but I can't believe that Apple would be so foolish as to not hire the people it needs, once a reasonable case was made, regardless of the OPEX effect. If the case is a big deal to make, that is a good thing - you want to avoid overhiring.
4. Why would Apple be so silly as to even try to do this (two major products at the same time), once it realized the iPhone would be ready at the same time as Leopard?
One word: Vista uncertainty. Now that Vista hasn't set the world on fire (Microsoft's marketing effort has been a surprising failure/surprisingly little), so Apple now has more time, and can afford the luxury of stretching out its product releases for maximum effect.
I am certain that Apple will be using the 4 months to pull in a few more things that would have been in OS X 10.6 and stuffing them into 10.5. Plus, Apple has been saying all along that there was secret stuff - now that pile of stuff simply got bigger because it could.
5. In practical terms, its more about the marketing than about anything else. Leopard will be revealed, completely, at WWDC - surely Apple is not going to slip in a few features without testing.
Yes, the QA folks at Apple will have only one major product at a time, as will the marketing folks and Apple's customer base. And that is good - everybody keeps busy and doesn't get overworked, and the customer keeps getting new stuff every few months, keeping Apple in the news.
Tue Apr 17, 2007 11:22 am Subject: Incisive Analysis - Well Done
As a close follower of Apple news and views, I have not read an article this interesting or telling of Apple in years. I read up on things Apple daily.
Remember folks this is only an indication of what Apple has come clean on in terms of what has fallen off their plate.
They are behind in almost all of their major computer product cycles. Pro laptops and towers are all seriously overdue for a product refresh. Pro laptops should have received a form factor refresh last year and now the towers are overdue. Apple didn't come clean on this one but the community silently and collectively has cut them slack. Apple's banked a lot of karma over the past decade but they are spending it wildly right now. John Martellaro's article here is the first I have seen that gets right at the core of the matter. Superb analysis John. Be prepared for the kind of vitriol that is reserved for John C. Dvorak. Jobs is probably pounding his desk right now maniacally yelling "Fire that bugger, FIRE HIM!!"
John's assessment is accurate and parallels the situation in numerous corporations - think of where you work, if not self-employed. If self-employed, have you ever wondered how you're gonna get it all done?
You learn to hire intelligently, train and delegate. Then, under promise and over deliver.
Many questioned Mr. Jobs health after the last keynote. Who is slated to take over? Could Mr. jobs relinquish enough control to act only as an adviser/consultant? He's earned some time off.
How many people think that MS gave Apple a copy of Vista to work on all these years? I don't. And Leopard's secret feature (full integration of Vista), combined with all sorts of compatability issues, likely shifted the timetable. Could this have been preventable? Possibly, but not without have extra engineers sitting on their hands this whole time (which doesn't sound like something any growth company would do).
Tue Apr 17, 2007 11:45 am Subject: I tend to agree with the article
Especially since John has worked at Apple and does have some insider insight of the company. Add the well known fact that Steve J does drive his employees hard to make the best they can, has a reputation of being a very tough negotiator and the article makes sense.
It is time, I believe, for Steve J to start moving the company to where he can be successful when he is no longer around - I doubt if he will work until he's 80. While I know that Apple can't rapidly increase the size of their engineering and software divisions I would like to see the VPs being allowed to hire exceptional people when they become available, which would require considering OPEX only as a percentage of revenue and not a specific dollar amount.
On the iPhone side, Apple has a huge contractual commitment with ATT and that has to take priority over Leopard. Since the iPhone is the first major product where Apple doesn't control the whole widget I wouldn't be surprised if part of the problem might be on the ATT side, with Apple needing to make some rapid responses to make everything work.
As for the January announcement of the iPhone - I believe it one of the smartest things Apple has done. Unlike the iPod, someone wanting the iPhone will need to be "out of contract" with their current carrier. For people on a 2 year contract that 6 month pre-announcement allows 25% to move to a month-to-month basis so they can buy an iPhone when it comes out. Double that percentage for those on a one year contract. retailers call this Open to Buy and it is a new and critical factor for Apple to address.
The iPhone commitment makes Leopard a secondary priority until the iPhone release. Not a great situation, but unavoidable for now. I have no doubts that Leopard will ship in October, even if a Secret feature or two is withheld until later.
John's talking about the whole widget. The article targets the *why* behind the delay, not the implications of the delay. I agree that any delay is bad for business (even if the ultimate effect is not so bad) because of the underlying perception. Just look at the stock price languishing to see perception turned into tangible reality. Future delays can be reduced or eliminated by analyzing this particular delay, and addressing the underlying *why*. In this case, it's what we call "span of control" in the military. Apple is covering a $25b business with a $6b span of control leadership structure.
Tue Apr 17, 2007 12:04 pm Subject: Hiring more coders, Making hard decisions
QuoteBiff wrote:
I agree with the Guest who talked about keeping tight control over hiring. Your comment about doubling release times if you double your engineers typically results from hiring a bunch of idiots. The key is to take your time and only hire talented individuals.
Not really. The effect in software engineering (and many other projects) is well-known. If you hire more coders/software engineers, no matter how good they are, the engineers who were already working on the project will have to spend time helping bring the new people up to speed, decreasing the time they have to spend working on the project. More people also means more time spent in communication, in general. Even hiring new people takes time away from the project for managers who have to interview and choose employees, who then may not start to work for weeks. Also, the new people will be less productive to start with, so the cost and manhours spent on the project will increase.
So, John is correct in that regard. However, I suspect that the same principle applies to QA and testing as to coding, as it has little to do with specific skills or tasks. The principle, while discovered in software engineering, applies to any development and testing project. It also applies, though to a lesser degree, to manufacturing, though the limitations there can also be equipment and facilities.
Biff's overall point was quite good, nevertheless.
Quotebrett_x wrote:
I don't think the sky is falling, but blowing a product release date by that far is a pretty big deal in just about any company, and it is a sign of poor planning IMO.
First, you don't know that. As others have said, John's article is based on speculation. Neither he nor any of us knows what really goes on in Apple--nor in most corporations, for that matter.
Second, it is impossible to plan for every possible factor. If one tried to do that, nothing would ever get done. There are always significant unknowns, including, to paraphrase Rumsfeld (a great example of incompetent leadership), the unknowns you don't know about.
Leadership is not tested when things are going according to plan but when something goes wrong. That's when the difficult decisions have to be made. If Apple was faced with problems, someone had to decide where to put limited resources (which cannot be increased quickly). Apple decided to concentrate on the iPhone, perhaps for the reasons that others have explained well. (This is also probably one reason that Apple is so loathe to announce products until they are ready to ship. The Apple TV was delayed--why, we don't know for sure, perhaps because of manufacturing delays outside of Apple's control, but it is a lesser product compared to the iPhone.
I, too, spent some time as an officer in the US Air Force--22 years, probably longer than John did. I was one of the lieutenant colonels that John sneers at. I don't call myself a "senior scientist"--my three degrees from MIT don't include a PhD and I haven't done research in a long time.
I have been on the receiving end both of the "do more with less" syndrome and the backbiting post-hoc analysis by people who weren't there and/or who didn't understand the situation. I headed the test and evaluation phase of a multi-billion dollar development project. It was not unusual to have a test delayed--for a few hours up to weeks because of stuff no one can "plan" for and which can't be mitigated without huge increases in cost. A critical piece of equipment on a test aircraft goes down, for example. Do you send 3,000 people to fix the aircraft? No, you let the technicians who know how to fix it do their job. Do you insist that the test proceed on time, regardless of the problem, or do you accept the delay? If the delay is going to be 6 hours, do you decide to cancel the test and try again later, or do you keep people and facilities standing by, running up costs? Those are minor decisions compared to Apple's situation, but the backbiting afterward can be just as bad, though limited in scope.
I've also seen what appeared to be "bad" decisions from higher levels. Some, of course, really were bad. I spent enough time at the headquarters of the Air Force Systems Command (then the research, development and test arm of the Air Force) to know that there are many factors, many competing programs, and constraints that lower-level people (and the press and public) are not aware of.
There's also a question of leadership style. Different styles work better in different situations and different organizations. "Kick ass" leadership is not always the best approach. Patton would have been a disaster in Eisenhower's job, for example.
Tue Apr 17, 2007 12:40 pm Subject: Interesting theory
You definitely have the Mac market share story right. As a customer, it's fine to be part of a 5%-ish elite. But apparently for Apple, catering to that elite as a first priority isn't a business plan. I have hoped that the consumer products, like iPod and Apple TV, would be easy applications of Apple's design expertise, allowing Apple to quickly get new revisions to market and dominate in a way that would give them more flexibility to eventually take serious aim at desktop OS market share. However, I can easily see the iPhone being a spectacular failure that will force the company back to the Mac for solid revenues. And that would preclude gambling on licensing because the hardware revenues aren't there.
I agree wholeheartedly with John's analysis. I wrote a bit very similar to it over at Macintouch. Unfortunately, the Appkle apologista will continue to try and vindicate Apple's actions without looking at the big picture like this article does. I think that 2007 will ultimately show if Apple is up to the task of moving into the CE space without sacrificing the momentum is has generated with the Macintosh, and its future.
One slip, like the one with Leopard, is not necessarily a death knell for the company. But follow that up with slips in Mac hardware refreshes that were tied to Leopard, and it could get ugly. Delayed updates to Apple TV functionality and iPhone features that are dependant on Leopard will add to the problem. Mac hardware is getting awful stale, and with a company like Intel pushing our products right and left, if Apple doesn't stay on the leading edge of delivering products based on them, you can bet that the PC manufacturers will. And that will really hurt Apple.
The $6B Valley of Death mentality will not work in the new competitive PC environment that Apple has placed itself, using Intel products to compete against all the others. It must become quick and nimble, responsive to the nuances of a far larger PC market than it did when it was just a niche player with PPC, allowed to trickle out hardware and processor updates as slowly as possible. The stumble with Leopard and stale hardware is an ominous sign, if not dealt with quickly by Jobs.
You're right on John Martellaro.
It's common sense that you give priority to the iPhone right now.
The iPhone is Apple's long-term vehicle to take back the personal computer market (in the form of a handheld). The mac is doing great with the current OS. There's no urgency that four months will have any impact on.
Vista is also a bust. I think Apple was gearing up Leopard to face the Vista threat - with the "secret features" - but now there's no big threat. Apple can pull back the throttle a little.
Most importantly, from a marketing standpoint, it makes no sense to release Leopard and the iPhone at the same time. Apple likes to spread out releases, first of all. Not everything comes out at once. Second, releasing a new OS at the same time sends the message that the iPhone is from that "Mac" company. Must be incompatible with "Windows." Better to divorce the iPhone from the mac, even though it FREAKIN practically is a mac (with a pocket sized, phone/communicator interface). But the whole genious of the iPhone is that it does not have that negative connotation of the mac (sorry, but lots of people think it's that "other" system, that's "incompatible").
"Confidence that Apple is putting the pieces into place to become a major consumer electronics giant is being shaken."
And...
"While sales generally go up over the long term, a fabulously successful company like Apple appears to have no reasonable justification for not having continuous, sustained incremental growth in the computer market."
This whole essay contradicts itself. If Apple put its next-generation OS on the back-burner and instead focused limited resources on a consumer electronic product, how does that support your first quote?
The reallocation of resources was a business decision based on your second quote. Any firm would allocate more resources to a potential cash cow than a product that runs flat in a market.
Yes, you are probably correct that middle managers didn't get an opportunity to hire more resources and their resources were allocated to different products. This is a fact when you run a business. In addition, bringing on more full-time resources will constrain the organization. Apple is in a significant development period which will more than likely pass. There isn't a good business justification to fill a temporary hole in the resource pool with permanent staff. When the cycle slows down, do you lay off the recently hired staff to maintain your OPEX?
This article contradicts itself and also contradicts good management practices.
Tue Apr 17, 2007 1:10 pm Subject: Can't predict everything.
Quotekenaustus wrote:
On the iPhone side, Apple has a huge contractual commitment with ATT and that has to take priority over Leopard. Since the iPhone is the first major product where Apple doesn't control the whole widget I wouldn't be surprised if part of the problem might be on the ATT side, with Apple needing to make some rapid responses to make everything work.
This is my view on things too - when push came to shove, the question at Apple was if to service an internal customer (Leopard) or to service an external customer (Cingular/AT&T). And they made the right decision.
QuoteAs for the January announcement of the iPhone - I believe it one of the smartest things Apple has done. Unlike the iPod, someone wanting the iPhone will need to be "out of contract" with their current carrier...
Very *good* point. My contract is up in May and because of the pre-announcement, I've been thinking about the opportunity to at least consider the iPhone before deciding on what my next cellular contract is going to be.
QuoteThe iPhone commitment makes Leopard a secondary priority until the iPhone release. Not a great situation, but unavoidable for now. I have no doubts that Leopard will ship in October, even if a Secret feature or two is withheld until later.
I think that a lot is being assumed and said in regards to the so-called 'secret' features. Overall, Apple was probably feeling the heat from Vista before it really shipped, but now there's an opportunity to move from playing a defensive game (regarding features) and going on the offense. How impressive the secret features end up being come October will be interesting.
Of course, one can humorously argue that the REAL reason for the Leopard delay is to put the squeeze on Microsoft, because this means that MS will have four (4) *fewer* months with which to copy it for the 2009 release of Vienna (Vista's replacement).
-hh
Like John, I've worked for Apple as a software engineer. I can testify that management of the ongoing OS X effort has often been chaotic and understaffed, especially in QA. Development engineers are in fact required to do most of their own QA, which is wrong in so many ways I won't even try to list them.
Past releases of OS X have only managed to be on time by dropping features and by accepting serious bugs. The story that the delay of Leopard is entirely due to the iPhone looks like a whitewash to me; I think the iPhone effort was probably just the last straw.
Apple's main obstacles here are its secrecy and the tie to OS X. Although the iPhone project started 2.5 years ago, only a small number of people (the A-team) knew about it and worked on it. Same likely for the AppleTV. Unlike for the iPod, the complicating issue this time is that both these products (and future iPods) are using OS X. And that means that secret features for these products need to be worked into Leopard.
So a more plausible theory is that
1. the A-team has been missing from Leopard development for longer than expected, and
2. when the AppleTV (which uses OS X) group was finally expanded to the larger OS group last year, and same for the iPhone this year, the work required to integrate those AppleTV/iPhone features back into the main Leopard (and iLife and iWork) development paths took more effort than expected.
Once the AppleTV/iPhone have seen their first release, the issue becomes less acute. Yes, there will still be features for the v2.0s developed in secret from the main OS X path, but smaller in scope.
So yes, I agree that Apple underestimated the effort to launch three large-scale products (AppleTV, iPhone/iPod, and Leopard) within the same year, with two products breaking into new markets. But I don't think this will be a continuing problem going forward because Apple will have learned that entering new markets using OS X needs more time and/or more people (on the A-team).
Tue Apr 17, 2007 1:36 pm Subject: Good Post, John
Thanks you for a thought provoking post. Good points that deserve contemplation are raised. A thoughtful hypothesis is presented.
However, I am inclined to agree with those who argue for a continuation of the lean organization. I never had a sales manager who did not need more saleman, never had an engineering manager who did not need more programmers, and never had a customer who did not need more features than were in the next release.
One of Jobs leadership strengths throughout his career has been his ability to motivate people to achieve success despite limited resources. Apple does not want to find itself going through the cuts like those at HPQ or Citibank which is the price paid for increasing sales by taking on extra headcount without adequate attention to opex.
I didn't even have time to finsih the article, or read the numerous comments.
BUT....Who gives a crap? Seriously? You know you'll be buying it the first day it's on the shelves. And if not, then go buy a PC and shut your whining.
Leadership. Whatever. When was the last time IT or developer resources weren't strapped in any company? Maybe not with your Gov jobs you had, but in the real world, they are. everywhere. always. Whatever
<<<Apple was, around 2001, a niche company with a niche product line. It was fairly depressing, and everyone at Apple was waiting for millions of customers to someday wake up and realize that Mac OS X was the best OS on the planet >>>
OS X v10.0, released in 2001 may or may not have been the best superior to Windows XP. But it was a major upgrade from OS 9 and the CPU hardware was not competitive. Today, v10.4 is clearly superior, the Intel conversion made the CPUs competitive, the overall hardware design is superior, and the world is waking up to it. Mac unit sales have risen year-over-year for 14 straight quarters. They have risen an average of 24% for the last three quarters (post Intel). Apple now has a 10% share in the fast growing and high margin laptop/notebook market. And this is only going to get better now that Vista has landed with a plop, the retail strategy continues to grow, the Mac is connected further integrated with iTunes, iPod, iPhone, and AppleTV, and the eventual introduction of Leopard.
It is a great time to own a Mac.
QuoteDude. It's an OPERATING SYSTEM. What do you do for a living? What is the most complicated system YOU'VE ever designed? Now none of us know the total scope of the changes coming in Leopard, but they seem pretty darn huge. Unexpected things come up. Problems happen with the best of designs and they must be corrected. To only slip 4 months on something like an entire OS is pretty damn good. And I'm just talking in general here. I'm not including the iPhone as a variable.brett_x wrote:
Apple didn't start working on the iPhone in January... they have been working on it for over 2 years (Steve claimed when he announced the product). Leopard has been in the works for likely just as long. How is it NOT a leadership failure to get products released on time? Isn't that what leadership is all about? They knew what they were up against, even if the rest of the world was in the dark about the iPhone until January.
John, while I appreciate your insights and your articles most of the time, in this case you are just plain way out of your league, both in knowledge and experience. Product roll-outs on the scale Apple, Sony, and the like tend to do operate on a scale beyond anything you have ever witnessed. I suspect you have way too much military leadership training, which in the modern era, has very little to do with what we're discussing. Besides, Apple is in the process of rethinking just how it will do OS updates in the future, and very much understands why Microsoft's 5-6 year plan is really much better in the long run, both for customers and for developers.
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