Apple Wins the Old-fashioned Way: Outsmart the Competition

Cool new products catch our attention, and sometimes it seems that the flashiest products are the byproducts of the most successful companies. In reality, there's much more to be said for good business sense and raw intelligence. Those virtues go a long way towards explaining Apple's success.

There are at least two kinds of CEOs. One kind sees his or her appointment as some kind of intrinsic reward for the virtues they fancy themselves to have. Self-entitlement and dogma ensue.

Other CEOs see themselves as leaders who can coral talent and lead a team that makes very smart decisions in the best interests of the corporation. I see Tim Cook as the second type of CEO.

CEO #2 is particularly dangerous if they have excellent intelligence. Think about World War II in Europe. Germany had great technology near the end of the war. They had V-1 and V-2 missiles, jet aircraft that terrorized allied B-17s, and Germany was even working on its own nuclear weapon. But the allied generals outthought and outmaneuvered Hitler.

We're not able to see the inner goings on during Apple's strategic meetings of the executive team. And so we tend to evaluate the prospects of a company by its outwards signs: its products. Often, however, the features of products don't always tell the full story of how they impact the competition. All too often, for example, iPhone and iPad features are sized up by technical columnists by the perceived impact on them alone.

A case in point is the iPhone 6 Plus. One way to evaluate the 6 Plus is to note that it's playing catchup with the historically larger smartphones from Samsung. That's just politics. Another way to evaluate the 6 Plus is to look at the craving people have for larger displays and put that into market perspective for sales. When the company customers love finally has the goods, sales will be brisk. It seems trite, and it's only a simple example, but outthinking the competition works.

It requires a certain kind of objective mind, grounded in business reality and informed by a formidable intelligence to guide product development such that quantitative measures of success can be realized.

Article of the Week

All the above and more is nicely laid out by Daniel Eran Dilger in "How Apple, Inc. went thermonuclear on Samsung, erasing Android's primary profit center." Mr. Dilger lays out, chapter and verse, Samsung's recent collapse of profits. In the process of explaining what went wrong with Samsung's high-end smartphones, Mr. Dilger also spends time evaluating the impact of research firms like IDC that...

... have been blindly serving up smartphone market statistics focused entirely on shipment volumes and market share, regularly congratulating Samsung on its ability to ship huge volumes of devices.

When executives let research companies (or the media) dictate what's important to them, they're bound for trouble. Because Apple makes products that are focused on profitability not market share, it can afford to pour big money into R&D and manufacturing, ensuring the success of the product cycle.

D.E.D. goes on to diagnose the impact of those research reports.

In fact, by publishing misleading market estimate figures that obscured the real value of Samsung's shipment volumes, research firms incentivized Samsung to make poor business decisions.

Another element that comes intoplay is that Samsung is at the mercy of Google when it comes to Android. Mr. Dilger continued....

Without any obvious way for Samsung to differentiate its Android products—an issue that Google and Samsung have been fighting over throughout the year—Samsung faces another big problem going forward.

This is a great article, and has many more insights than those I've highlighted.

Believing in Apple

One cannot underestimate the lengths to which Steve Jobs went to the right the Apple ship and instill the right kind of business values in his team. Mr. Jobs saw how the company he founded went astray in his absence and spent his remaining years making sure that Tim Cook understood important values: using technology to serve fundamental human needs, making only the very best, and making sure that people want what Apple has to offer, leading to a solid financials.

Often, people scoff at these Apple values because they're offended by the success of smart people, but when these values are applied in the marketplace by men and women of intelligence and passion, Apple becomes a formidable opponent. Apple's recent revenues affirm the soundness and astuteness of Apple's decisions.

See, for example, Business Insider's "12 Mind-Blowing Facts About Apple That Show Just How Massive The Company Really Is."

Next: the tech news debris for the week of October 27. Apple Pay bonanza.

Page 2 - The Tech News Debris for the Week of October 27


This week's Particle Debris folder was full of, you guessed it, articles on Apple Pay. And not much else. In fact, I made my first purchase with Apple Pay this week at at local Walgreens. What was interesting was that the Walgreens personnel were not briefed at all on Apple Pay. My specific sales clerk had never heard of Apple Pay and was enthralled as I showed her how it works.

Apple Pay at Walgreens. Clerk was astounded.

The same was true at the local Panera Bread. All but one of the clerks during my recent visit there had never heard of it and hadn't been briefed. It makes me wonder why the management of these large chains don't want to at least provide a heads up. Something like, "Just be aware that some customers will be paying with their iPhones, and so long as the cash register says, 'paid' and prints a receipt, the customer is good to go."

I'd hate to have a clerk call security because I walked out of the store with my stuff and never produced a credit card. Anyway, here's a short list of articles related to Apple Pay that I think you'll find interesting.

1. The competitive aspects of Apple Pay. "How CVS and Rite Aid’s wrongheaded war against Apple benefits Walgreens."

2. Overview of Apple Pay and CurrentC. "CVS and Rite Aid turned off Appl e Pay and that’s a terrible idea."

3. Woes at CurrentC: "Maker of Apple Pay Competitor Has Already Been Hacked."

4. An MCX merchant fights, keeps Apple Pay. "Why Meijer isn't ditching Apple Pay like other retailers."

Moving on.

Here's a nifty article I found in which: "Apple’s Jony Ive Says Smartwatch Was Design Challenge." You just know that Mr. Ive is going to sweat the smallest details of the Apple Watch. I'm looking forward to owning one just because I know Mr. Ive was involved.

Finally, Jonny Evans has posted an interesting article about things you can do with an older tablet. "12 ways to use your older iPad." For example, you could use it as a dedicated TV remote control. He wrote: "Most of the big TV firms (Sony, for example) already offer iOS apps that can control their TV sets, so your old iPad could be the household TV remote." He didn't mention it, but there are also apps for DIRECTV and Comcast DVRs. Good stuff.

If I put on my Spock ears, do you think they'll let me go trick or treating tonight?


IQ concept 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 (preamble on page one) followed by a discussion of articles that didn't make the TMO headlines, the technical news debris. The column is published most every Friday except for holidays.