For Apple, Making the Best May No Longer be Good Enough

| Particle Debris

There is a method to the madness of specsmanship and a broad product line. The process of continuously challenging a leader on specs and availability is valuable because it can begin to break down the sales momentum of a market leader. For the leader, declining to compete on specs starts as a strength, but at a certain point can transition to weakness.

I was wrestling this week with the idea of how a company that touts quality and always making the best products can be attacked by competitors. Some thoughts were forming in my mind, and one of them was how the psyche of the quality leader can lead to a bit of complacence disguised as the patience of those who make the best.

I wrote a draft editorial about it, but I held it because I didn't see a specific event in the Apple world to tie it to. And then, this morning, I read a fantastic column by the increasingly awesome Jonny Evans at Computerworld. The article is long, but required reading for all Particle Debris readers: "Smartphone wars: 'We're only dancing' as Samsung v Apple share the floor."

In that article, Mr. Evans laid the technical foundation for what I was mulling over this week. In fact, Mr. Evan's article is so good, I'll wait while you read it. Seriously.

Let's start with the idea that while Apple wants to maintain its tradition of quality products—those that we savor and love, those that meet our deepest needs—Apple does not want to be freight-trained by Samsung while it does so.

And with that, I'll transition into what I had written earlier in the week.

How to Train Your (Dragon) Competitor

The relentless challenge to Apple by its competitors is not without malice and foresight. Every business strategy has compromises and some weaknesses. It's the competition's job to find the critical weakness, in military-speak, the cascade failure mode, of the competition.

So far, smart Apple observers have noted that for Apple's opponents to compete on specs alone is not a winning strategy. However, the next step is the perilous part. Apple, by believing that it always builds the best could fall into a subtle kind of arrogance that suggests that the specs game is run by impostors, competitors without merit. I know that Apple keeps its guard up on this, but customers are known to get false impressions. Or to become contrarian. 

For example, on the surface, the traditional Apple logic looks like this:

Apple makes great products. I can afford them, and I buy them. Therefore, I love Apple.

That works and sells products. But there is another, more complex line of reasoning, and it may explain why some customers fall into the arms of the competition.

Apple makes great products. I can barely afford them. I always have to wait too long to get what I want. Apple seems in no hurry to compete with aggressive competitors who give me a lot of freedom and technology for affordable prices. I perceive this as arrogance. Therefore, I don't like Apple.

It is wise for any technology leader to view aggressive competitors with alarm and anxiety instead of smug disdain, even if the sales numbers appear satisfactory.

At some point customers can sense the disconnect between the pleasant arrogance of always making the best and the actual delivery in the market. When a endless stream of competing products come along that look better, at some point, customers stop rationalizing in their minds that they're getting the best value from from the leader. And then, the tide turns, as it has so often in American business.

This happened to Cadillac when the Infiniti and Lexus brands came along to challenge. It happend to IBM, the originator of the original, and best, IBM PC. (IBM had to eventually sell its PC division to Lenovo.) It happend to Silicon Graphics, all too arrogant in its awesome but overly expensive UNIX workstations. It happened to RIM/BlackBerry, a company whose connection to and belief in the business world looked unassailable. It happend to Microsoft, asleep at the wheel when the tablet revolution came along, and still apparently in no great hurry to catch up. Eventually, customers stop listening to the marketing and head off, in an unpredictable stampede, into the arms of the competition. Then it's too late.

Traditionally, for any American company, it's been a deceptively easy slide into an indifferent arrogance unless there's someone inside who can, euphemistically, throw some chairs around the room, pointing out that the company is building "leading" products with inferior specs. Or good specs but increasingly late to market. You can write your own Dilbert cartoon here.

There's a very fine line between a passion to build the best and a self-satisfied state of mind fueled by the faith in a permanent state of customer acceptance. One way way to attack that routine customer acceptance is with a flood of competing products of all sizes, for all people, and with the very best technology, world-wide, at all costs. It looks like an empty strategy at first. That is, until the incessant body blows in the market start to take their toll, and customers, with changed mindset, begin to defect.

Could this ever happen to Apple? I hope not. It's a frightening thought.

Back to the Evans Article

So that's where I was when Jonny Evans punctuated it all with his chart showing the global smartphone shipments comparing 2012 and 2013. Despite Apple's excellent performance of 31.2 million smartphones sold in 2013's calendar Q2, Samsung sold 76 million. Apple's market share dropped to 13.6 percent; Samsung's increased to 33.1 percent. Mr. Evans pointed out, "The big take away from the analysts is that Apple has not kept pace with industry growth within the smartphone sector..."

At this point, it is customary to become defensive and point out that Apple doesn't need to be the market leader. As Mr. Evans reminded us, "Samsung shifts boxes. Apple (at its best) sells dreams."

And I agree with that. Completely. We don't want Apple to compete on the terms of the wannabes. But what worries me is when executives focus relentlessly on building the best, who is there to shake them up from time to time? Who is there besides the ghost of Steve Jobs to say, "This one isn't good enough. That one should have shipped months ago."

I think Apple's customers not only want the best, they want to side with a visibly aggressive winner. Not a company that's being steam-rollered.

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Tech News Debris for the Week of July 22

There was more this week on Microsoft's Surface and Windows debacles. The first is from Business Insider. "Microsoft's Big Problem In One Chart." The next is "Did we all just witness Windows start to die?" That last, and it's a doozy, "Steve Ballmer Admits Microsoft’s iPad-Killer Is A Flop." The problem is that when Steve Ballmer throws chairs in the office in response to some Microsoft setback, the result is seldom a fresh and vigorous renewal resulting in competitive products. The result is just furniture repair bills.

What sets followers of Apple, acolytes, apart from the customers of Android? Linus Edwards thinks it's because Google's Android product has no central philosophy, no core principle that arouses passions. And we all know that great writers are passionate. Here it is: "Where is the Android John Gruber?"

I have been of the mind that, eventually, we'll see larger tablets. It'll be the natural evolution of the product. I'd like to see them sooner, rather than later, and we've finally heard some rumors about Apple testing iPads with larger displays. Chris Maxcer has some thoughts on how a larger display could help. "The Case for a Bigger, Badder iPad."

Google Maps is almost perfect, right? Then how did Google Maps lose four entire countries?

Finally, I've written about the Dish Network Hopper DVR in the past because it has some relevance to Apple's areas of TV "interest." (For those newbies, here's a recap.) And so, here's the latest good news on the Hopper. The U.S. Court of Appeals for the Ninth Circuit has upheld a lower court's ruling in favor of Dish. Sometimes you win, and sometimes you lose. This is a good win.

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Dragon via Shutterstock.

Particle Debris is a generally a mix of John Martellaro's observations and opinions about a standout event or article of the week combined with a summary of articles that didn't make the TMO headlines, the technical news debris. The column is published most every Friday except for holidays.

Comments

geoduck

The link to the Steve Ballmer article is not working. An interesting read though. I found it at
http://www.cultofmac.com/237379/steve-ballmer-admits-microsofts-ipad-killer-is-a-flop/

John Martellaro

geoduck:  Thanks!  I fixed the link.

Lee Dronick

There is always a balance between quality and good enough. Note that quality doesn’t necessarily mean inexpensive, not does expensive mean that the item or service is good.

Sidebar - Is anyone else having problems with the MacObserver website and the iPad. This problem cropped up yesterday. If I scroll down the page and release my finger the page autoscrolls back up to the top of the page. This happens under Safari and other iOS browsers. It seems to be a javascript problem, if I turn that off then there is no problem with it autoscrolling.

BurmaYank

@Lee:  No such problem on my iPhone 5

Lee Dronick

BurmaYank, it looks like the autoscroll problem for me has cleared up. Maybe it was the javascript in an advert or something that has no cycled out.

wmac

I think Apple will be quite okay if it keeps doing what it is doing. Some times the numbers don’t tell the whole story. For example, what is the difference between a smartphone and a feature phone? Is there some industry standard definition? Also, I think I heard on NPR’s program “Marketplace” that Samsung’s earnings, while good, showed they weren’t as good as expected in their telephone business, and the Galaxy S4 was not the killer product it was purported to be.

Also, to use Cadillac vs. Lexus, Infiniti isn’t a fair comparison. Cadillac was a POS long before the other luxury sedans were even in the marketplace, and even long time Cadillac buyers were complaining about the build quality and lack of innovation, long before the others entered the market. Even worse was Cadillac’s response to competition by bringing have-baked products to market, that the perception of inferior products is hard to shake.

In the case of IBM, they got out of the PC business because they saw the PC becoming a commodity purchase and really could add any significant value to the proposition and couldn’t get the ROI their metrics mandate. Don’t even get me started on SGI and their whole Windows NT workstation strategy, they shot themselves and no better for them, they were truly an arrogant bunch of folks, just like DEC was.

Jim Gramze

You are ignoring some very important factors:

1. There are people who love Apple and will not consider a competitors products no matter what. Their business is for Apple to lose, not for anyone to win.

2. There are people who hate Apple and will not consider their products no matter what.

3. Apple offers an ecosystem that is unmatched. My iPhone is an extension of my Mac Pro and my iPad, not merely an end unto itself.

4. People don’t buy things every quarter.

I have a 2009 Mac Pro, a retina iPad 3, and an iPhone 5 which I bought about a month ago. Nothing offered by any other company holds the slightest interest to me.

I’m waiting to see the price of the new Trash Can Pro before deciding whether it is time to upgrade to it. That’s four years I’ve been waiting and I have no real need to buy a new machine because my dual quad core machine with 12 Gig RAM still stomps. I did put an SSD in it. I’ve been waiting four years for a compelling reason to upgrade. The big point here is that I don’t buy a new machine or even think about it every time a new thing is introduced. Apple makes things of quality that last.

The Apple Care on my iPad 3 is not up until October of this year. That is the soonest that I will consider upgrading. SOONEST. I suspect that neither my behavior or that of many other people of various tastes and pocketbooks buys new equipment every quarter. Annual sales should be compared, not quarterly. Maybe sales should be looked at in intervals of how often the typical consumer upgrades a particular kind of device.

My iPhone is about a month old. I bought it because I needed a new phone, not because of all the ads on TV or the specs of different models. Customer loyalty guided my decision. Period.

All this reading into quarterly sales instead of real buying patterns of real people might drive page hits but it doesn’t mean anything to real people in real life. I buy a new phone no sooner than every two years. I buy a tablet no sooner than every two years. I buy a computer no sooner than every three years. Those are my shortest buying cycles and sales relevant to my buying habits can only be measured by metrics that take those periods of time into consideration. I buy such electronics more often than anyone else I know.

Analysts are idiots.

Imagestealer

@Jim;
I fully concur with your closing statement.  In fact, if you take the first four letters, it provides a perfect description of the type.

iJack

Steve Ballmer is Microsoft’s Mohammed Morsi.

@ Jim Gramze ~ When you get your new Trashcan Mac Pro, chuck me your old one, OK? It sounds great.

Jim Gramze

@iJack,

If the new Mac Pro price is way out of whack I might just throw a USB 3 card in the old one and continue to bide my time. Otherwise, there’s already a line!

d'monder

“Apple, by believing that it always builds the best could fall into a subtle kind of arrogance that suggests that the specs game is run by impostors, competitors without merit.”

Like the dark days of the mid-1990’s?  When the PC had low-cost performance and Windows 95, while Apple was mired in Copland?  And Apple though this was perfectly OK, because “their clock doesn’t run on Redmond’s time”?

Here’s hoping Cook and his successors know when to deliver the dope slaps every organization needs to stay healthy.

Paul Goodwin

John. Please tell your web team that the screen scrolling issue makes using this site virtually impossible on an iPad. Literally every time I try to scroll or double tap to expand the text to fill the screen, it snaps back to the top.

geoduck

For Apple, Making the Best May no Longer be Good Enough

I keep getting back to the stories of two companies: Vincent Motorcycle and Cave Optical.
Vincent was an early producer of bikes. Bring up a Vincent Black Shadow to any biker and they will get misty eyed. They were decades ahead of their rivals. They insisted on the best. No second rate parts. Their finishes were hand rubbed lacquer. The swing arm had roller bearings, not the cheap journal bearings, or even no bearings, used on others. They were legendary. They went out of business because while everyone admired their work they bought less expensive bikes from other companies.

Customers weigh the options and sometimes the less expensive, lower quality, option is a better deal.

Which brings me to Cave Optical. They made astronomical telescopes. They made great astronomical telescopes. They made sure their optics were second to none. This all took time and they started to get behind in their orders. The place I worked ordered one, after it was 9 months late we just cancelled it, we were on a yearly budget cycle and needed to get a scope that year not one or two years later. There were several reasons Cave went out of business but the core was because they would not compromise quality even to ship on time. People went to other companies, Criterion, Questar, and others who would deliver scopes that were almost as good, but on time.

You might have the best product but it isn’t worth anything until you get into the customers hands.

Let me leave you with this quote from William F. Buckley, Jr.
ā€œIdealism is fine, but as it approaches reality, the costs become prohibitive.ā€.

diverreb

I am a long time Apple Supporter and customer, since 1984 to be specific.  Used to be an Apple groupie, but over time just appreciated their products and services.  Post Jobs I haven’t been impressed.  No WOW factor in anything they’ve done.  I recently purchased my first non Apple product.  A Galaxy Note 2.  If i knew Apple was coming out with a larger Screened phone in a few Months I certainly would have waited.  Their silence on new features and timelines for these features doesn’t work for me anymore.  The trust is gone that they will wow me and whatever they are doing with the phones would be worth the wait, especially when Competitors already have Product available.  The Android System has a lot of pluses, as far as features and flexibility go over Apples IOS.  There is also a lot more complexity to get to results you are looking for.  It also does not play well with Macs, which are still my Computer of choice….. But overall I am very happy with the Phone, now that I have all the work-arounds figured out.  The other issue is Apple’s refusal (arrogance) to allow Flash on their Pads & Phones.  despite their claim that it’s obsolete there are far too many sites and places where Flash is used and you get the sorry can’t view this without Flash message.  My fear is that Apple is morphing into more of a Microsoft Model where they will continue to make big bucks and sell product, but I fear the magic is gone….

John Martellaro

I suspected that a few readers might take the title the wrong way, gloss over the reasoning, and become unruly.  But the comments above are awesome.  I really have the world’s greatest readers.

Lee Dronick

Paul, I had that iPad scrolling problem on Friday into Saturday. In found that if I turned off javascript it didn’t happen, but that turned off some features such as the ability to post. Anyway, the problem for me cleared up later on Saturday and has not yet returned.

wab95

Lee, Paul:

I too had that problem with my iPad and this site while in the Middle East on Friday. I haven’t tried it with my iPad since, but hope that it is resolved.

John et al:

Greetings from the road. I concur with your comment that a few readers might have misinterpreted the intent of your article. Despite that, I find that most comments, even if off-target of the piece’s intent, are nonetheless illuminating on the subject of criticism of Apple’s current efforts and performance.

Your point about the potential for a series of body blows, delivered in the combination of product range and rapid spec upgrades on separate cycles, to overwhelm, in time, a steady pace of slower product refreshes over a narrower range is sobering and worthy of reflection. As you state, every strategy has its vulnerabilities and it is the job of the opposition to find and exploit those vulnerabilities with lethal effect (in the case of corporate competition, that means killing off a product line, seldom the opposition itself).

My one short observation and thought on that is this. In Return of Dragon, Bruce Lee starts his fight with Chuck Norris in formulaic fashion (meaning adhering the style of Weng Chun). Chuck Norris hands him arse for his efforts. Lee then switches to the fluid style of Jheet-kun-doh, which has today morphed into so-called mixed martial arts. Bruce then serves up Norris his arse with chips. Norris, realising that he’s losing this fight, starts trying to imitate the free style of Lee, but to no avail. Every fighter who watched that scene walked away with a clear message - don’t fight someone else’s fight. You will lose. Without practice, you don’t know what you’re doing and in the middle of a street fight, with your life on the line, is not a time for experimentation and desperate tactical changes.

The point being, Apple switching its ground game to match Samsung will likely be a losing strategy. Samsung’s entire philosophy on hardware production bears no resemblance to the core philosophy at Apple. It’s not just the products, it’s the core philosophy that comes first and guides product development that separates these two contestants. I see Apple here as Lee, who in its early days of the PC wars was beaten to their knees, but then got back up, went loose and free style and came back at the industry with such combinations and determination as that industry had never seen. Were I their fight coach, I’d say stay with the game, add more combinations, and keep the competition on the back foot. While the consumer not knowing what and when Apple will come up with can cause some to slip away to the competition, that strategy is essential in keeping the competition in reaction mode; and as one says in hand to hand combat, action is quicker than reaction. As for the customers, it comes down to trust, and whether or not they trust Apple to have their back in product releases, or are simply trying to make money at the customers’ expense. That is an issue that only the customer can decide for themselves. So much for the observation.

The comment is this. Samsung is in the business of making hardware. Apple has been in the business, for the past decade, of building a multi-disciplinary and multi-layered platform, of which hardware is but a component - essential, but a component nonetheless. Cook articulated this recently. Samsung, like Norris, are trying to emulate with strategy, but late in the fight. They are even going so far as to hold developers conferences for people to write apps for Samsung (who still rely on other people’s OS). This is the gamble. Is a platform, that covers all the core elements of digital lifestyle management, of greater appeal - has a greater centre of mass and gravitational pull if you will - than a bevy of gadgets, however spec’d and frequently upgraded, that do not bring that digital management together, but leave it dispersed. Again, that is a question that each consumer must ask themselves. No one solution will address all needs.

My own feeling is that we are seeing less of a partisan philosophical divide amongst consumers than we are seeing a practical divide based upon perceived needs and tangible benefits. Which of these approaches in the long run prevails is a tale that remains untold and unfinished.

eolake

Thanks, man. On my blog eReaderJoy.com, I have been screaming about bigger iPads now for two years.
We need them for so many things. For me personally it’s mostly about the big page for reading. Comic books, technical books, magazines, cookbooks, art books etc etc.

I really hope that Apple will do this right, and do it soon. I would hate to have to suffer through Android for this as I have tried several times before, It’s just no fun.

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