What Really Makes Apple Different?

| Hidden Dimensions

“Under the most strictly held conditions of temperature, pressure and humidity, the organism will do as it damn well pleases.”

-- Legendary science joke

“Move electrons, not atoms”

-- Nicholas Negroponte

Friends often ask me, "What makes Apple so different? Aren't they just another company that makes expensive computers?" Today, I ran across an example, just one of many, that explains how Apple thinks. Follow me along.

Focus on the Customer, not Money to Exclusion

Indeed, some would like us to believe that Apple is merely a premium brand for the well-heeled. It's a red herring that comforts other companies. But after years and years of experience, Apple has learned a few things that other companies still fail to implement. The current ruckus over Redbox provides an instructive example.

To understand how Redbox came to file suit against Warner Home Video, 20th Century Fox Home Entertainment and Universal Studios Home Entertainment, we have to look at Hollywood's video distribution strategy. Believing that many different customers want to acquire video in many different ways, Hollywood has embarked on a dual pronged strategy: lots of different distribution channels plus total control over each.

What this means is that Hollywood is all too willing to distribute movies to theaters, sell DVD discs, Blu-Ray discs, license streaming (via, for example, Netflix), license Video on Demand (VOD) to cable and satellite companies, and allow Apple and others to sell or rent digital versions, even in high definition. But on their schedule.

However, because Hollywood movie studios take the risk, foot the bill, and own the content, they feel justified, compelled really, to dictate every detail of the distribution. That might work until too many channels get out of control.

Notably, along came Redbox and started a very successful business renting movies for a buck at their 15,000 famous red kiosks. That, of course, depends on contractual access, the ability to purchase the latest movies from intermediate distributors.

The studios mentioned above took an immediate dislike to this entrepreneurial spirit because it undermined other channels, so they instituted a blackout period to keep hot movies out of the hands of Redbox until other channels provided appropriately pleasing profits.

What this boils down to is a matter of vision and judgment. When you put physical media out there, some enterprising people are going to figure out a way to give customers something they weren't getting before. In this case, easy $1 rentals without a late fee.

The lesson here is that when your primary motive is to maximize profit, you take a path that doesn't always put the customer first. Think about it. Apple has worked hard to convert a rather plain-faced, dowdy BSD Unix into a beautiful, graceful star. It took a boatload of passion and devotion to excellence to do that. The effort was not a mass market approach.

Technical Complexity Requires Simplicity of Vision

The outward manifestation of that devotion to excellence is to do the very best job you can delivering the best possible technology. That means not being everything to everyone, and it means paring away, not adding too. That's Steve Jobs' enduring vision, and it will be his legacy.

Apple is highly focused on the Internet delivery of video. That's a conscious decision based on an understanding of technology and how it develops -- even though, for now, "packaged media" has 88 percent of consumer dollars. Just looking at the dollars, one would think that Apple would be all over Blu-ray like suds on beer. Apple is looking farther down the road.

Accordingly, Apple is providing one channel for the delivery of video and managing it through iTunes, focusing on the user experience. Essentially, when a company focuses on the UE rather than a shotgun approach, designed to maximize profits via brute force, they tend to make money naturally instead of doing it in a way that annoys the customer. Thats how Apple achieves those long lines and crowded retail stores.

Redbox is also trying to improve the UE of renting a movie. They were able to do so because the movie studio policies combined strict control with scatter gun distribution and left a giant hole in the customer experience. Redbox is making making money because they filled that need.

Customers do as they damn well please.

Apple doesn't leave too many holes either. Apple thinks about the consequences of its approach, in general. It works to predict undesirable outcomes and steer clear. Often, the customer has no choice but to go along for the ride. It's like going into a grocery store and finding that there's only one brand of organic chicken. You can complain about the higher price and lack of selection, but your body will be happier for it.

What's also interesting is that when a company engages in too many products with too many features, it's hard to develop improvements. Conflicts arise. In the case of Redbox, the studios have instituted that stopgap blackout period that has earned a lawsuit. It's a finger in the dike, and, sooner or later, one runs out of fingers.

It's hard to lay out a long term plan when the basis of your business is a broad, complex approach to the market. Having a vision for a single way of doing things makes it easier for technology to evolve. For example, consider the following sequence:

  1. iTunes. Rip, mix, burn
  2. iPod
  3. iTunes video
  4. iPod touch
  5. iPhone
  6. iPad/iTablet

If Apple had not developed a simple foundation and built on it, the company would not be be in a good position to move smartly to mobile video. For example, suppose Apple had gotten envious and delved into selling Blu-ray players. Then executives in the (hypothetical) "home video" division at Apple would now be whining about the proposed iTablet putting their division out of business. Powerful VPs who squabble and have turf to protect can sink the best of companies.

In other words, Apple doesn't try to blanket the whole market. That creates too many product conflicts. Instead, it focuses on the customer experience, limits choices, pursues excellence, has a long term plan, and keeps things simple and focused enough that natural technical evolution can take place. That's the true basis for innovation.

Apple's Vision

What if the Hollywood studios had a similar vision? Perhaps they would work together to obtain better control of the video pipe into the home. Then slowly dispense with all forms of physical media, create a fabulous user interface, and deliver movies directly into living rooms, cutting out all the middlemen: Redbox, Apple, Netflix, Blockbuster and Amazon. Regrettably, they're still on this "packaged media" binge, a short term fetish, fueled by the lingering success of the last century's success, the DVD. If that's a vision, it's one looking backwards.

So, once again, it appears, just as iTunes brought the needed coherence that the music labels couldn't muster, Apple is going to do the same thing to the movie studios with a new data center and a mobile video tablet. The vision, if you will, is video entertainment (and newspapers, magazines and books by the way), direct from the data center to the iTablet. What could be simpler?

But first, Apple has to build a bigger data center.

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13 Comments Leave Your Own

Mike Weasner

I had mobile TV back in 1981.  I got a small (<2” screen), battery operated TV to watch space shuttle launches and landings on.  It easily picked up TV stations over this now archaic “analog” TV broadcasting technology.  Gee, it worked great.  Now it is 28 years later and I can no longer get mobile TV.  Progress?  And being in a broadband-challenged area (DSL <1.5 mbps), viewing video via the Internet, mobile or fixed, is not a pleasant experience.  So, while Apple is pursuing Internet and mobile video, it is going to leave many locations in the USA (and the World) behind.  That is, unless Apple is working with some signal delivery company to provide high bandwidth to any location, mobile or fixed.  Otherwise, that new Apple data center and mobile video tablet will only be a “premium brand for the well-heeled” who live in densely populated areas that support high bandwidth broadband delivery for both mobile and fixed.

Bosco (Brad Hutchings)

I am pretty sure that what makes Apple different is the No Hire agreements.

Nemo

It would be difficult for the alleged no hire agreement to be the source of Apple’s success, because, in the case of Palm, Palm rejected the alleged agreement.  And in the case Google, Apple success preceded the alleged agreement by a wide margin and the alleged agreement, if it existed, lasted for but a very short time, as Google and Apple are clearly going their separate ways.

Nemo

Mr. Weaver your complaint is not with Apple but with the Federal Communication Commission (FCC).  The FCC, pursuant to the authority that Congress granted to it, promulgated and implemented the policy that eliminated analog broadcast in favor of what is supposed to be nationwide digital broadcast. 

So it was the FCC, which I believe was acting at behest of the cell phone carriers, that instituted the policy of eliminating analog and substituting digital.  Apple has no choice but to follow the law and exploit the law as best as it can for it and its customers benefit.

geoduck

Otherwise, that new Apple data center and mobile video tablet will only be a ?premium brand for the well-heeled? who live in densely populated areas that support high bandwidth broadband delivery for both mobile and fixed.

Point taken. OTOH that might very well be the core of Apple’s customer base.

I do empathize with you about the small partible TV. Unfortunately, for most customers the portable DVD player has replaced the portable TV. As with many things, those that want or need something out of the main stream either have to pay a premium or are just SOL.

Mike Weasner

I was not complaining about Apple and “analog” TV.  It was just an observation that what once worked great has been replaced with something that has yet to work in a mobile environment.  Video tape and laser discs (now both “archaic”), and now DVDs have replaced broadcast TV for many of us for some viewing purposes.  And portable DVD players can be an excellent mobile TV experience.  But not for live events, like when I was watching space shuttle launches and landings on that portable TV.  Maybe someday when we have 100 gigabit (or better) wireless technology everywhere (and I do mean EVERYWHERE), mobile TV can live up to MY expectations.

aardman

I see Apple’s gradualist approach to developing and introducing technology (the iPod-to-iPad/Tablet progression you described.  Note: iPd preceded iTunes) from a different prism:  That of the consumer’s learning curve and aversion to complexity.

Apple was right to come out with a simple device and app (iTunes) and gradually add new features, capabilities and functionalities.  This way there is minimal complexity to intimidate the typical consumer and he or she has time to move up the learning curve before the next round of enhancements is introduced.  Imagine if the whole iPod-iPhone-iTunes infrastructure was introduced all at the same time.  Most consumers would have run away screaming from such a complicated product.

Now contrast Apple’s approach to Microsoft’s Windows Media Edition.  Only the geekiest need apply on that one.  One look at the daunting complexity and most consumers passed.

pingu

Maybe someday when we have 100 gigabit (or better) wireless technology everywhere (and I do mean EVERYWHERE), mobile TV can live up to MY expectations.

For a good quality picture on a 2” screen you don’t need anything more than 50-60 kbps which can be deliver over mobile 3G networks today.

Josh

As a pedantic animal scientist I can’t let this pass without comment

“It’s like going into a grocery store and finding that there’s only one brand of organic chicken. You can complain about the higher price and lack of selection, but your body will be happier for it.”

Recently the EU released 2 comprehensive reviews concluding that organic food is no healthier or more nutritious than non-organic food. 

http://www.food.gov.uk/news/newsarchive/2009/jul/organic

Therefore your simile is inappropriate.  Organic food is a marketing term aimed at people with more money than brains.  It is no better for you than the alternative, worse for the environment, and simply a tax on those too stupid to do the relevant research.

Bosco (Brad Hutchings)

Someone is obviously a shill for the petro-agricultural industrial polluter complex.

jecrawford

@Josh

That wasn’t the whole story.

The article concentrated on the relative “goodness” of organic versus ordinary food. Little mention was made of the “badness” of ordinary food versus organic. A lot of chemicals are used in intensive food production, not all of which are necessarily good for you.

In any event, the simile conveyed the message even if it was not quite accurate from your (one-sided?) perspective.

John

AlaskaBoy

Of greater concern than a few organic chickens, carrots and side of beef, is the use of bottled water with the subsequent disposal of these plastic bottles into landfills.  If you must drink bottled water (supporting the petro industrial polluter complex by the way) because of the floating ring of chemicals attaching to the inside of your glass, use it; if not, stop buying it in cases and refill from the tap.  That way you can still look yuppy or geeky with your computer or in your gym spandex.

Someone want to discuss all the diapers going into the landfills these days?

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