| Home > Technology > Post-CES, and in the lead-up to MWSF, a view on why Apple is so hard to imitate |
| Post-CES, and in the lead-up to MWSF, a view on why Apple is so hard to imitate | | Date Created: 10 Jan, 2005, 06:44 AM |
 In the wake of attending CES and listening to the Gillmor Gang's take on it - they were as underwhelmed by Microsoft's efforts as I was, despite or to spite Robert Scoble's presence on the show - I want to remind readers of a column published in Harvard Business Review eleven months ago, before Apple's share price began its surge.
Harvard Business School (HBS) professor David Yoffie, who uses Apple as an MBA case study, was interviewed by HBS Working Knowledge editor, Sean Silverthorne back in February 2004.
Here are some relevant highlights as we countdown to MacWorld SF 2005. Prophetically, the column is entitled: Where does Apple go from here? published very soon after MWSF 2004.
Silverthorne starts with a comment, then launches into a Q and A with Yoffie:
".... for longtime Apple watcher David Yoffie, the Max and Doris Starr Professor of International Business Administration at Harvard Business School, the jury is still out on prospects for the company's long-term success. And Job's track record is hit or miss, he says.
Take Apple's return to investors. Yoffie says that if you invested a dollar in Apple in 1992, it would be worth $.79 today. The S&P 500 over that same time would be worth about $2.75, or more than three times your Apple investment. "Now, obviously, the company is doing much better since Jobs returned to the CEO job; but having said that, it has not yet reached the value that it was in the early 1990s," Yoffie points out.
Q: Occasionally PC companies will try to bring Apple's design smarts to the Windows world, but just don't seem to have the same success. Is that a testament to Apple and Jobs?
A: There's something about the PC world that always surprises me. I would expect when Apple brings out a great product, you should get relatively rapid imitation (in the Windows PC market). But in fact, it usually takes eighteen to twenty-four months. There's an incredibly long lag between the time in which Apple brings out something and people finally bring out a product that really can compete effectively. Part of the explanation is that Apple is so small that hard-nosed business people say, "It's just a niche, you don't need to worry about it." And it's not until it gets a little bit of traction that people really start to take it seriously and then start to figure out how to imitate it. Job's big advantage is that most of his competitors don't take him seriously in the early stages of a new product launch.
Number two; really great industrial design is hard.
Q: And he has passion for it.
A: And he has passion for it, right. I did a study on Gucci and it reminds me a little bit of Gucci. Jobs has a passion and love of details like Tom Ford had at Gucci. Steve Jobs, in some ways, reminds me more of Tom Ford than Bill Gates or Michael Dell. There's nothing uglier than a Dell box. And they seem to make little effort to deal with it. Furthermore, the PC industry operates on much thinner margins, which is why it takes so long to imitate. Dell spends 1 percent (of revenue) on R&D, Apple spends 4 to 5 percent on R&D. Apple has a lot more capacity built into its business model to play with industrial design and to get it right than a Dell or a Gateway."
My comment: Jobs is likely very amused and dismissive of Apple as an MBA case study. He knows what he wants and where to go to get it. Go to every book HBS publishes on Leadership and count how many times the word "Vision" is mentioned. It will be interesting to read what he has to say at the Stanford 2005 commencement services in June.
Here is what University President, John Hennessy said in a Stanford press release announcing the address:
"The name Steve Jobs is synonymous with innovation and creativity over the past three decades. Steve has been a leader and visionary, a pioneer in the use of technology as a means to create a more engaging and humanistic world. The advisory committee identified Steve as someone who personified the spirit and creativity that have characterized Stanford since its founding. This was an inspired recommendation, and I thank them for their thoughtful work."
By the way, returning to CES and Microsoft, if you want to hear an interesting comment on Microsoft installation issues, listen to the latest IT Conversation audiofile featuring Doug Rushkoff and "Renaissance Prospects" from Poptech 2004.
After downloading the mp3/AAC file, listen to how Rushkoff takes a swipe at Microsoft's Wizard installation as metaphor for how it keeps the PC obscure and mystical, in contrast to Apple's user-centric approach (which is implied for Macheads). He actually invokes Windows usage within the context of undermining the diagnosis of Attention Deficit Disorder.
You need to listen to the whole hyper presentation for context, but the Windows/ADD piece starts around 26 mins in... |
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