Portfolio

On Apple and its business success

ADARSH GOPALAKRISHNAN | Updated on March 09, 2018

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What Jobs did was to apply his vision for computing and insights on the consumer to elevate Apple into a hugely successful business.

Steve Jobs' demise last week has evoked appreciation for his glittering career, even from countries where Apple's products have made scarcely a dent. Such was the man's showmanship and influence. Much of the appreciation is for pioneering the concept of personal computing and the design excellence he fostered in Apple's product range. But Steve Job's contribution extends far beyond these spheres. “It's technology married with liberal arts, married with the humanities, that yields us the result that makes our heart sing,” said Steve Jobs. The millions of iPods, iPads and iPhones sold testify to this belief. Sales of the company's various products over the years catapulted the company from a lowly $10 per share to the current $377 (See accompanying graph). However, Apple's products make it easy to overlook the company's contributions to business strategy. Apple is a highly successful mass consumer durable manufacturer, software and retail company rolled into one. Its stylish design, simple user interface and supply chain prowess enable it to sell iPhones at thrice the reported cost of its components. Just as impressive is Apple's ability to extend its design prowess to content.



Hardware plus software



Jobs borrowed ideas liberally, but it was his execution of those ideas in which Apple had few peers. Be it the concept of a personal computer, a tablet computer or ‘smart-phone', they weren't invented by Apple. But it took Jobs and Apple to popularise them. The perfect combination of hardware and software is hardwired into Apple's DNA. As Steve Jobs said during a presentation earlier this year: ‘You know, if the hardware is the brain and the sinew of our products, the software in them is their soul.' Having complete control over every element of hardware and software design has translated into a friendly user experience. The clutter-free interface and chic design are products of the talent Jobs fostered on his return to Apple in 1995.



‘One more thing'

Media coverage on Steve Jobs over the last few days makes it easy to believe that he was a one-man army who conceptualised, designed, programmed and sold these great products almost single-handedly. The truth is more nuanced. Steve Job's stellar team includes Tim Cook, Jonathan Ive, Scott Forstall, Bob Mansfield and Eddy Cue, to name just a few people behind Apple's products and services.

Tim Cook's legendary supply chain prowess, which helped Apple corner markets for memory chips, and aggressively work with manufacturers to drive down prices while improving components such as LCD screens and processors, has been a key element in Apple's success.

Similarly, Jonathan Ive's minimalist design ethic has resonated with users, as has Scott Forstall's work with the IOS operating system. Former executive Ron Johnson's retail strategy added to Apple's margins through the wildly popular Apple Stores. The number of people behind Jobs is formidable. What Jobs did was apply his vision for computing and insights on the consumer to elevate Apple into a hugely successful business.

‘It just works'

Over the last decade, Jobs took the idea of integrated hardware and software a notch higher: Gaining a share of consumer spends on books, music, movies, software and entertainment. Apple's IOS provides an attractive platform to hawk all the above products. In exchange, it asks for a hefty cut of the sale price. This effort is powered by stores such as iTunes, the App Store and other virtual storefronts.

The success of Apple's range of portable products has also brought in a captive audience for content. This allows the company to negotiate with content providers and could mean hope of better pricing power and more sales for struggling media such as newspapers and magazines. It could also be the much-needed fresh blood in television and book publishing. The iPad and iphone are reported to be gaining traction in segments such as enterprise usage and medicine.

The idea that a single snazzy Apple device could be the consumer's one-stop shop for content, music, reading and other forms of entertainment is Steve Jobs' enduring contribution to the industry. This is the vision that has given Apple a head-start and several competitors a benchmark to aspire to.

Published on October 08, 2011

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