Why Can’t The Competition Out-Apple Apple?

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I just finished writing a story about how Asustek wants to make better products than Apple, and I came out of thinking to myself that there's just no way a Taiwanese manufacturing company was going to out-Apple Apple.

Then I remembered American-based Sandisk CEO Eli Harari recently saying that Apple had won the MP3 player war and saying that, "You can't out-iPod the iPod," a statement with which I agree, but it really begs the question of, "Why?"

Why is it that no one can seem to do what it is that Apple does, even though through its actions the Cupertino-based company has, by default, provided a blueprint for how to do it?

Let me back up a bit and say that my initial skepticism about a Taiwanese company is not an issue of racism, but one of corporate cultures. The vast majority of the Taiwan and China-based companies I know of have focused on the same things that most American computer firms have focused on, which is making computers cheaper using operating systems licensed from Microsoft, while playing lip service to issues such as design.

When you're focused on cheap, you just can't afford to make cool.

From my perspective, those kinds of companies will never be able to make better products than Apple. Since Apple changed the rules by which it competes starting in 1997, no American, European, or Asian company has been able to duplicate Apple's success in making innovative products that work so well and look so cool that people just have to have them.

So again, why is that?

Let's get back to Asustek: The company has spent a ton on engineering R&D and has excelled at making thin laptops on the cheap. They're likely one of the most innovative and ambitious companies on that side of the Pacific, and judging from Mr. Tsang's interview with the New York Times, it's aware that it has a perception issue, and is interested in solving that problem.

If anyone (other than a Sony that miraculously gets its crap together) can get a leg up on Apple, it should be a company like Asustek. I still don't think it can, however, so we're back to why?

At least part of it is the issue of corporate culture. Any company focused on issues such as market share and price points is never going to be able to design and develop the kinds of customer-focused solutions that Apple does.

For one thing, it's important to remember that Apple's fat prices include enough profit to pay for all those fancy-schmancy designers. When you're focused on cheap, you just can't afford to make cool. Ask Dell. Well, don't bother asking Dell because they haven't figured that one out either.

In any event, there's also the fact that Apple controls the whole widget, something no other computing company does. Apple's control over the software and the hardware lets it do things its competitors simply can't.

From the combination of iPod and iTunes, to the iPhone's hardware plus iPhone's software, to the marriage between Mac OS X and Mac hardware, to the joy that is the iLife suite, Apple's business model of controlling it all allows the company to make products that work better than the competition's.

When you combine that with its focus on what the customer wants, it seems obvious to me why the Asusteks, Dells, Acers, and other computing companies are destined to spend their time chasing Apple's lead rather than resetting the rules of the game.

Until that changes, until some other company can devote the resources into replicating that business model, I think Apple is going to be able to keep its lead on the Asusteks of the world.

And for the record, I don't really see that happening. I don't see any other company ever overtaking Apple in the realm of making best-in-class products, though it is inevitable that eventual changes in leadership and corporate culture could certainly drag Apple down to the lower planes of its rivals.

Let's just hope that such change, as inevitable as it may be, is many years, and even several leadership changes, in the future.

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20 Comments Leave Your Own

Lee Dronick

“...it is inevitable that eventual changes in leadership and corporate culture could certainly drag Apple down to the lower planes of its rivals.”

Or it could launch it up to heights that Steve Jobs couldn’t imagine. But yes the greater danger is that some bean counter who can’t see beyond the next quarter will become CEO.

JulesLt

One small point - ‘Apple controls the whole widget, something no other computing company does’.

While true in the current PC market, there are plenty of other areas of computing where it isn’t - consoles, PDAs, and phones, and even historically the microcomputer market. Windows is really an exception that people have come to assume is the rule.

Palm are actually a good case study - made excellent products until someone hit on the wheeze of splitting out the software and hardware divisions, and then the hardware division started licensing WinMobile, at which point they found themselves undercut by people making cheaper similar products.

Taking a more Apple-like approach has delivered the Pre, which their WinMob competitors will find harder to address.

Nokia are a similar story - with Symbian and Trolltech’s Qt being brought directly under in-house control they have grasped that having control of the complete widget is important, even if the software is open-source. (This is similar to Apple and WebKit).

Now in theory, there’s a variety of ways Asus or another manufacturer could escape Windows dependency, from Qt to Cocotron, but I suspect what Asus mean is really in terms of industrial design and engineering, not software.
(It’s not just designers Apple employ with those margins, but the kind of developers that can create a good quality SDK)

Jade

I completely agree with you Bryan. And beyond the focus on cheap solutions, I’m always amazed to find that so few companies other than Apple seem to simply test their product in a real-world setting, just making sure interacting with it makes sense. It’s as though no one outside Apple takes the time to think of usability, interface and basic product flow.

Cellphones are the obvious example: why did it take the iPhone for other companies to wake up about interface? And why the hell are they STILL incapable of replicating anything that comes close (ok Pre perhaps - finally).

Which comes down to your point: money. They don’t want to invest in good parts and they don’t want to invest in the time required to refine user experience. Until they wake up to that simple fact and get the talent needed to accomplish the task, I don’t see anything changing either.

wilf53

Quite to the point. To elaborate a little over it, one could add that it is about the attitude. Part of that is the willingness to throw overboard old ways of thinking and focusing on the experience of the consumer, the end user. I think most companies view it from the point of the engineers and the technicians and that is why we have had such a lot of cumbersome, unintuitive products as we have.
At Apple (and probably much thanks to Jobs) they dare tell the knowledgeable people to forget about their ways and to concentrate on the end user. As long as other companies do not “copy” and fully understand and implement that attitude, they will go wrong.
This means that one should be willing to demand that something “just works”, no matter how much technicians and engineers will tell you that it won?t. OK, so they have the knowledge but you know how it is to be an end user so you just demand that they fix it the way you want it. Not many CEO?s will have the guts to tell their best people that, probably feeling inferior to their technical knowledge and skills.
In addition comes the fundamental understanding of industrial design being far more than a layer of “cool” you add on in the end.
And of course, no matter how hard they will try to make good machines - and perhaps succeed - they will still have the problem which is Windows…

dennis

In addition comes the fundamental understanding of industrial design being far more than a layer of ?cool? you add on in the end.

Yes. Most companies seem to have the same idea that many consumers have - that design is merely what something looks like, when it really goes to the core of how a user interacts with a product.

Lee Dronick

Yes. Most companies seem to have the same idea that many consumers have - that design is merely what something looks like, when it really goes to the core of how a user interacts with a product.

I wish Apple would design the remotes and interface for cable TV boxes, DVD players and such.

BanjoBanker

But yes the greater danger is that some bean counter who can?t see beyond the next quarter will become CEO.

Somehow I don’t see Apple as having any “bean counters” in the traditional mold. I sure their cost accountants are familiar with the Apple business model and perform their tasks accordingly. The cheap, penny pinching accountant is bred in the culture where they work, I should know, it is what I do for a living. That being said however, the Mac user in me wishes for a better way of looking at costs other than the “drive them down for short term profits” way in which I currently must.

James

I think it pretty much boils down to being unwilling to take risks of any kind vs. the bottom line. This is true in any industry. Creativity and the certainty of a sure thing can’t coexist. Following a blueprint is the wrong approach-success is created, not recreated. Apple’s had hits and misses over the past decade, but anything that’s hit has hit hard.

That’s it in a nutshell, IMHO.

Lee Dronick

The cheap, penny pinching accountant is bred in the culture where they work

Well that is important, we should not waste money and there are things that could be cut that would not hurt (sounds like an AFLAK commercial). However, I have seen businesses be pennywise and pound foolish only to pay for it by no longer being viable.

Rafael Verduzco

I wish Apple would design the remotes and interface for cable TV boxes, DVD players and such.

After getting to much used to the MagSafe power adaptor, I would like to see MagSafe headphone and USB connectors. =)

Apple’s huge success is based on the precise combination of software and hardware. A more decent user experience can be achieved buying a fairly well designed PC with a Linux distribution ?in the sense that it’s not as crap as Windows is? but it’s just a little more decent. After spending hours/days/weeks configuring something on Linux, the OS X experience of “just works” along with the extremely elegant, unobtrusive way of making it work, one can realize that paying the price of any Apple product is worth every single penny.

Also, Asustek would also need to set up an outstanding support service like Apple does.  And the list of “Asustek would also need to” can go on an on?

aardman

As long as Asustek thinks of itself primarily as a hardware manufacturer it will never out-Apple Apple.  They can build the sleekest, coolest computer but if you turn it on only to be greeted by Windows staring you in the face then all that hardware engineering is for naught.

ipaqrat

There’s an issue of fundamental, intrinsic vision. Apple creates where others follow.  One could argue that SJ has a gift (notably lacking under Scully) of great product vision. He seems confident enough to avoid the the focus-group trap. He is powerful enough, personality-wise, to motivate (or bludgeon) others to follow.

Microsoft’s board of directors would NEVER trust SJ to plan their products. That’s the outcome of their vision and philosophy. Look what it got them. They rule the world, but with Vista, WinMobile and Zunes. Kinda like the United States and SUV’s: There are SO many of them. Gas was SO cheap. But we were tricked! SUV’s turned out to suck in most practical respects, but now we’re stuck with them.

The fact that Asustek is describing their new initiative in these terms indicates that they have already missed the chance. They can’t SAY they want to out-apple Apple, and be able to do so. If they had the stones, they’d just DO something new, something great and let customers say “Wow, someone finally out-appled Apple!”

jbelkin

You’re absolutely right in everything you’ve said but the other critical key is that Apple may be the only MASS MARKET company that is focused not just on design but on end user experience. You could argue some other companies like POsrche but they are not mass or Krups which make nice product that are easy to use but certainly do not match the complexity of high tech ... but to get to Apple’s stage requires as you noted a corporate sea change and cultural change ... just as many companies tried mimicking the iPod as if its exterior design wasresponsible for 99% of its success and when those companies failed, they blamed “Apple’s marketing” because otherwise, they would admiting they made an inferior product. Of course, Apple marketing is world class but why was the iPod successful - the real reason? It was a music player disguised as a portable hard drive and NOT the other way around. That meant hardware & software AND user experience was integrated ANd then you stack world classdesign on top of that - good luck beating that. We are seeing a repeat in essence with the iPhone. Of course, RIm has been around longer but RIM;s ONLY strength is corporate email and eventually the larger consumer smartphone market will be 60%-70% Apple and 30% fought amoung RIM, Nokia, Samsung, Palm & Moto. Unlike the iphone, Apple will never reach 75%-90% penetration but that’s okay - more money at 60% smartphone marketshre.

So, why can’t more companies replicate world class industrial design and the end user experience?

Bureaucracy and corporate politics.

That’s the bottom line. Who has no worked for a company where good ideas are smothered by jealously or just because some other person held a higher position? Or simply that everyone wants to contribute and it ends up as DESIGNED BY COMMITTEE? (That’s Nokia’s problem - it’s not that they areb’t smart enough ...)

Apple’s strength is that Steve Jobs has the design geek touch and now experience to do the right things. I’m not saying he’s perfect but it’s hard to argue against him and not just because you don’t want to face his wrath but that’s he’s seldom wrong plus unlike a lot of other tech companies where the engineers don’t respect the CEo who came up in marketing ... you really going to argue with the guy who essentially invented the home personal computer market? Or the guy who bought Pixar for $10 million dollars and sold it to Disney for $7.4 billion? Who helped birth the iPod and the iTunes store? Or launched the fastest rtail store to a billion dollars? You really going to ignore Steve’s suggestion as not possible or try to squash his ideas? Hello? Hello?

Meanwhile, in other companies, they are going to try and squash the next Steve Jobs because a) that guy is going to take your job - why should you help him?

azarkon

Palm [is] actually a good case study - made excellent products until someone hit on the wheeze of splitting out the software and hardware divisions

It is interesting to note that Palm’s most recent success (the treo) was actually developed by a handspring, and hardware competitor who licensed palm’s software.  That device was so good that Palm bought handspring to stay competitive.  With the pre getting slammed in reviews for poor build quality on the device, it shows how difficult apple’s path is.  Controlling the whole widget raises the room for error dramatically.

And are the whole-widget types indicating that iPhone software developers would be better served by producing their own devices to run their software?  that’s a logical extension.  Just like those developers get help from the iPhone and it’s installed base, computer makers get the advantage of being able to run whole swaths of software by licensing windows.  Apple’s unique operating system is a relic of the state of the industry 20 years ago.  It’s hard to see another computer maker repeat that blueprint today.

LLG

Typos - thought you’d want to know.

Fifth paragraph from the top:  Currently reads, ...“no American, European, or Asian company has been to duplicate Apple’s success…”  Missing the world ‘able’.

Eighth paragraph from the bottom reads:  ...“is never going to be able to be able to…” 

Good article.
(Feel free to delete this comment, once corrections are made.)

LLG

Bryan Chaffin

Typos - thought you?d want to know.

[Snip]

Good article.
(Feel free to delete this comment, once corrections are made.)

Thanks, LLG!  I’ll leave the comment, though, and I appreciate the editing help.  Too many typos and not enough hours in the day to catch them all. smile

OldGuy

Apple’s Hardware could stand pretty well on its own. 
Look at the 13” or 15” MacBook Pro as a Windows machine. 

LED backlit screen, backlit keyboard, 10/100/1000 Ethernet, digital video out, optical audio out, magsafe power connector, large button-less trackpad (does it support multi-touch in windows?), Firewire 800, WiFi N, bluetooth, high capacity battery, sturdy aluminum chassis, light weight, and environmentally friendly materials. 

It is hard to find a Windows laptop that can match those attributes.  When they come close, usually the weight gets great, or they use a slower speed processor or graphics chip, gigabit Ethernet is also rare.

While the combination of making the hardware and the OS is one factor in Apple’s success, its hardware designs alone are pretty impressive.  And its software alone is pretty impressive—See iTunes and Safari running on OSX and Windows.  (Apple used to sell a version of AppleWorks for Windows too, or was it called Clarisworks then?).

Yes I am a fan.  And a longtime Mac user—I got my first Mac 25 years ago this summer.  I’ve had my complaints, but overall I’m glad Apple has survived and prospered.  If only I had bought some stock five years ago!

Mike

It is interesting to note that Palm?s most recent success (the treo) was actually developed by a handspring, and hardware competitor who licensed palm?s software.? That device was so good that Palm bought handspring to stay competitive.?

Per Wikipedia: Handspring was run by Jeff Hawkins, Donna Dubinsky, and Ed Colligan, the original inventors of the Palm Pilot and founders of Palm Computing, after they became unhappy with the direction in which 3Com was taking the Palm division. Handspring was founded in June 1998 and merged with Palm, Inc.‘s hardware division in 2003 to form palmOne. The Treo 600 was the last product to use the Handspring name.

Typical corporate crap. 3Com buys Palm, and then pisses off the founders of the company that they have to leave to build the sort of phone they envisioned. The Treo was great for its time (I owned two), but after Palm and Handspring merged, nothing was ever the same. I’m not sure whether bureaucracy or malice killed the Treo (and maybe Palm itself), but there’s something wrong with that company over the past five years…

Palm had to bring an Apple exec out of retirement to create the Pre, an exec who was just named CEO. Let’s see how long he lasts…

JulesLt

And are the whole-widget types indicating that iPhone software developers would be better served by producing their own devices to run their software?  that?s a logical extension.  Just like those developers get help from the iPhone and it?s installed base, computer makers get the advantage of being able to run whole swaths of software by licensing windows.  Apple?s unique operating system is a relic of the state of the industry 20 years ago.  It?s hard to see another computer maker repeat that blueprint today.

It does happen in other areas - Sony & Nintendo, for instance, develop their own systems (vs Sega’s brief final flirtation with Windows CE).

There were also other ways the market could have evolved - in most areas, from sockets and protocols through to programming languages, from C to Java & Python, to POSIX/Unix APIs, we have typically ended up with a multi-vendor standard, and competing implementations of that standard. There were even rival MS-DOS compatible operating systems (MS-DOS not being a huge task to implement and well-defined).

It’s not necessarily about developing from scratch (after all, much of OS X is derived from BSD, WebKit is open-source also) so much as having control - if you don’t like something, or need to extend it, you can, whereas the significance of Windows to PC manufacturers, and the lack of viable alternative, allows MS to dictate the agenda to the manufacturers.

Imagine if the big PC manufacturers put a few million up in prize / investment money to encourage developers to develop great software using Mono, Qt, or even Cocotron (an X-platform implementation of Cocoa).

Karl

actually, one thing is misleading. Apple is fairly unique in its LACK of concern for what concerns want, or at least what consumers say they want. They focus on what users do and would enjoy.

They don’t do focus groups, they just come up with ideas and then sell them to consumers.

Not saying that they completely ignore consumers, but they routinely sell massive numbers of smartphones w/o keyboards. They made the Air without an optical drive. They sold the iMac without a floppy. Etc.

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