Forget google – it’s apple that is turning into the evil empire

Forget Google – it’s Apple that is turning into the evil empire

John Naughton
The Observer, Sunday 6 March 2011
Article history

You may think you own your iPad or iPhone but in reality an invisible string links it back to Apple HQ
Once upon a time, when Apple was mainly a computer manufacturer, people used to liken it to BMW. That was because it made expensive, nicely designed products for a niche market made up of affluent, design-conscious customers who also served as enthusiastic – nay fanatical – evangelists for the brand. It was seen as innovative and quirky but not part of the industry’s mainstream, which was dominated by Microsoft and the companies making the PCs that ran Windows software. This view of Apple was summed up by Jack Tramiel, the boss of Commodore, when Steve Jobs first showed him the Macintosh computer. “Very nice, Steve,” growled Tramiel. “I guess you’ll sell it in boutiques.”

That was a long time ago. Now, with a market capitalisation of just over $331bn, Apple is the second most valuable company in the world – bigger than Microsoft ($220bn), Oracle ($167bn) or Google ($196bn). The quirky little computer company has grown into a giant. But not necessarily a giant of the Big Friendly variety, as the world’s magazine publishers have recently discovered and as the music and software industries have known for some time. For Apple now controls the commanding heights of the online content business and it looks like doing the same to the mobile phone business. At the moment, it looks as though nobody has a good idea of how to stop it.

Every year, Fortune magazine polls a sample of US CEOs asking for their opinions of their competitors. The results for 2011 have just been released and they show that Apple is the “most admired” company in America. This is the sixth year in a row that it has held that title.

The reasons

are obvious. On the product side, Apple creates beautifully designed, highly functional and user-friendly devices that delight customers and provide fat profit margins; it has a corporate culture that reliably delivers these products by specified dates; it’s much more innovative than any of its competitors; and it has a unique mastery of both hardware and software.

On the strategic side, the company has displayed a deep understanding of technology and a shrewd appreciation of potential devices and services for which people will pay over the odds. Most CEOs would kill to run a company that possessed a quarter of these competencies. Apple appears to have them all. Its current dominance is built on three big ideas. The first is that design really matters. It’s not something you can outsource to a design consultancy – which is what most companies do – and design is as much about ease of use as it is about aesthetics. The second insight was that the maelstrom of illicit music downloading triggered by Napster couldn’t last and that the first company to offer a simple way of legally purchasing music (and, later, other kinds of content) online would clean up. And third – and most important – there was the insight that mobile phones are really just hand-held computers that happen to make voice calls and that it’s the computing bit that really matters.

Most of the media commentary about Apple attributes all of these insights to Steve Jobs, the company’s charismatic co-founder, on the grounds that Apple’s renaissance began when he returned to the company in 1996.

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Forget google – it’s apple that is turning into the evil empire