I recently submitted the first draft of my manuscript for my next book. It’s about what I call “technology elite” companies and it has 21 chapters most of which talk about attributes of what makes them elite. They include elegance in product design, malleable when it comes to business models, very aware of the power of the physical presence and touch even in our digital world, global when it comes to supply chain etc etc.
Honestly, when I started writing it I had Apple prominent in every chapter. I mean how can you ignore Jonathan Ive when you are talking product elegance? How can you ignore Apple’s masterful retail strategy when it comes to physical presence?
In the manuscript I ended up submitting Apple still looms large, but the book is much more balanced. It has 17 case studies including UPS, 3M, Corning, Boeing, Virgin America, Google, Facebook, HP and of course, Apple, and 4 guest columns from CIOs and IP attorneys and professors as a companion to each of its 21 chapters.
Here are some excerpts from my Apple case study
- “In a 2004 BusinessWeek interview Jobs said “And it comes from saying no to 1,000 things to make sure we don't get on the wrong track or try to do too much. We're always thinking about new markets we could enter, but it's only by saying no that you can concentrate on the things that are really important.” That ‘saying no to 1,000 things” has become part of the lore around Jobs and Apple. But Apple’s saying yes to plenty of gutsy, even maverick decisions is what really defines Apple’s success.”
- “While Apple did not invent MP3s, it dragged the music industry with iTunes to make it a big business. Over 15 billion songs – most of them singles - have been downloaded via iTunes and many more through other channels like Walmart.com. Even today, though, many music executives long for the return of albums, ignoring the “long tail” phenomenon – users buy many more “one-hit wonders” than they would if they were not unbundled.”
- “Apple has stayed loyal to Foxconn through multiple releases of iPods, iPhones and iPads in spite of sweatshop accusations, employee suicides and factory explosions in its Chinese facilities. Most companies like to diversify between company owned and outsourced plants and certainly across geographies. Apple has been willing to take the risk of putting its eggs in the Foxconn basket and taking plenty of jabs from China bashers (though Foxconn has recently been looking at a significant diversification to Brazil)”
- “When Apple opened its first retail store in 2001, an observer commented “"I give them two years before they're turning out the lights on a very painful and expensive mistake,"Apple dealers were not happy. One of them said “Apple might do just well enough to really hurt our business. They've also done a...poor job telling us how sales and service will work when an Apple Store opens nearby," Others questioned the timing in 2001 with the tech industry in a severe downturn and drawing parallels to PC maker Gateway's struggling retail effort.”
- “When Apple introduced the iPad in 2010, it tried to reverse “more than two decades of (industry) attempts to get tablets right–none of which really succeeded, and some of which failed on a monumental scale.“
- “Amazon has over the last decade become a dominant player in the book market. As eBooks started to grow in popularity over the last couple of years, Amazon had driven the market towards a $ 9.99 price point. At the iPad launch, Walt Mossberg of the Wall Street Journal asked Steve Jobs why people would pay more for the same book on an iPad. Jobs’ response was “The prices will be the same” Apple had no intention of keeping prices that low even though it was a trivial player in the book market compared to Amazon. Instead it signaled to publishers it would accept an agency model which would give them more control over pricing. That precipitated a show down between publishers and Amazon, and Amazon having to cede pricing control to the publishers. Venturebeat wrote “The ten-dollar e-book may soon be gone, replaced by the fifteen-dollar e-book””
- “While many technology companies use cash reserves to make acquisitions, Apple has on many occasions used large sums of money to secure strategic components. In 2005, “Apple reached long term supply agreements with a number of memory supply companies including Hynix, Intel, Micro, Samsung Electronics and Toshiba. Apple will prepay up to $1.25 billion for flash memory over the next three months. The agreements secure a supply of NAND flash memory through 2010.” In 2011 they announced “During the September and December quarters, we executed long-term supply agreements with three vendors through which we expect to spend a total of approximately $3.9 billion in inventory component prepayment and capital expenditures over a two-year period.” Apple would not reveal the components or the suppliers but such large commitments not only get them priority in tight markets but also freeze out competitors.”
- “It could be saying no to 1000 things or it could be saying yes to 10 gutsy decisions, or it could be what Marc Benioff, who did a stint at Apple before founding his own very successful salesforce.com, says “Steve Jobs is the best technology leader the world has ever seen.” Certainly, few would argue he is the Tom Cruise “Maverick” - the “Top Gun” of the industry!