A deep dive into Apple reveals how its lieutenants have been struggling to cope in the two years since Steve Jobs died. An excerpt from Haunted Empire: Apple After Steve Jobs by Yukari Iwatani Kane
A decline was inevitable.
The story follows an archetypal pattern — a pattern familiar in both history and myth. A struggling empire, on the brink of dissolution, recalls one of its founders from exile and casts him as a saviour. The ruler, ruthless and cunning as Odysseus, gathers the faithful and emboldens them to take startling risks that allow the empire to reach even greater heights than before. Amid the celebrations, the emperor grows sick. Knowing that he is the living embodiment of his kingdom's fortune, he tries to hide his illness until he is finally forced to accept that he is not immortal.
Left to carry on his name, the emperor's lieutenants fall prey to complacency and confusion, lapsing into disarray and paralysis. Bound to the way things have always been done, these new leaders become less flexible and ignore the warning signs. The emperor is gone, but ever present. Though they are still at war with enemy armies, these lieutenants cannot find their own way forward. They are tired. They are uncertain . The well of ingenuity has run dry.
The theories of Clayton Christensen and Gautam Mukunda explain it all so clearly. Apple's story, as they have noted, has long unfolded in defiance of business physics. With each new triumph, the company rose higher and higher. But sooner or later, gravity always wins.
On Apple's campus in Cupertino, morale has languished, and employees are quitting. Apple has always asked a great deal of its faithful. But in the past, they accepted the long hours, the ceaseless pressure, and the verbal tirades because they felt that they were working for a company always reaching for something higher. When they saw Jobs on stage, unveiling the latest wonder that all of them had joined together to create , they had felt fulfilled. After the release of the first iPad though, it became harder for any of them to see the point of it all. Each wave of new products felt more incremental, less revolutionary, less wondrous.
In the past two years, as it became clear that something fundamental has changed at Apple, the pace of resignations has increased. Some employees wait, biding their time until their stock vests. Others just leave. In some parts of Apple, farewell gatherings have become a weekly ritual.
A new phrase has been coined to describe some of the defections: G2G, or Go To Google.
In October, the company launched two new iPads — a thinner, lighter full-size tablet called the iPad Air and an updated, faster iPad Mini with a sharper display. It also said that it would make free its iWork productivity suite and iLife photo, movie, and music making apps, which had previously sold for $4.99 to $9.99 each. Cook called the changes "the biggest iPad announcement ever, by a large margin," but the boasts rang hollow. iPad sales had been falling as Samsung and Amazon's cheaper devices eroded the company's once dominant share.
Gartner research firm projects that Apple will split the market with the Android camp almost equally in 2013.
After the event, Marco Arment, the creator of Instapaper , noted on his blog that most of the presenting executives didn't even seem excited about their own announcements.
"At best," he wrote, "the presentation felt uptight." Shortly after that, Apple reported its third consecutive quarterly decline in profits and just a four percent increase in revenues. Both iPhone and iPad sales were below analysts' projections.
When the iPad Air went on sale, Walmart, Staples, and Target cut the price of the entry-level model by $20 from the get-go .
Despite the launch of the new iPhones and iPads, the hunger for something fresh, some beautiful breakthrough that will turn everything around, continues. Apple's inventors are reportedly at work on new products — a connected watch device, the long-rumoured television. Taking a cue from Samsung, the company has also been experimenting with phones of different sizes.
It's not too late for Apple to dazzle the world again. The magic can still be resurrected. Some reports suggest that the company might unveil the watch or the TV sometime in 2014. But at this point, the company has grown so huge that it would need to sell millions of these new products to make a significant enough impact on overall sales and profits to be considered successful.
The debate continues over what would have happened if Jobs were still here to run the place, revving imaginations and terrifying underlings, speeding through life in a car with no licence plate — rewriting the rules every day of what is possible for him and for Apple. Many of the problems that have plagued his successors were already taking root before his death. Whatever answers Jobs might have offered, had he lived, it's unlikely that he would have second-guessed. He might even have found a way to convince people for a while longer that Apple was as great as ever.
Without him, everything changed. The dilemmas multiply and deepen. Solutions slip further out of reach.
It's important to remember that Jobs handpicked his successor. He trained Tim Cook, indoctrinated him, subjected him to trial by fire, and spent years evaluating his capabilities. Jobs chose Cook knowing full well that he was not a visionary, that he had no history as an innovator, that he was best known for his devotion to spreadsheets.
Jobs didn't choose Jonathan Ive to lead Apple. He chose the Attila the Hun of Inventory. The question is, why? Did he think that a numbers man was best for the storms gathering at the horizon? Or did he want to make sure that his vision would not be replaced by someone else's ?
Since Cook took over, he has often explained that his mission is not to emulate what Jobs would have done, but to always do what is best for Apple. At the same time, he has repeatedly insisted that nothing has changed at Apple, even as the world has changed around him. It's unclear if he sees the contradiction.
Watching Cook in public — taking the stage for another launch sitting in the red chair where his boss once ruled — is to behold a man labouring at an impossible task. He's smart. He's engaged. He believes . But the words he utters come out flat and slightly off-key. There is no spark. No fire.
Even some of Apple's biggest supporters have noted the decline.
Late this summer, in an interview with 60 Minutes, Larry Ellison talked about what Apple was like when Jobs was pushed out in the eighties, and what it was like after he came back.
"We conducted the experiment," said Oracle's CEO, a former Apple board member and one of Job's closest friends. "I mean it's been done. We saw Apple with Steve Jobs. We saw Apple without Steve Jobs. We saw Apple with Steve Jobs."
Now the pattern was repeating itself. Only this time, Jobs had left One Infinite Loop forever.
"Okay, I'll say it publicly," Ellison admitted. "I don't see how they can... they will not be nearly so successful because he's gone."
(Extract published courtesy William Collins, an imprint of HarperCollins Publishers)
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