Why Can't The Competition Out-Apple Apple?

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.