Lessons from Apple

When Apple computer burst onto the scenes in 1977, it created an industry. The idea of the personal computer was born. With the introduction of the Apple II the next year, with its attractive box and color graphics, computers became something for the masses. The company raced into Fortune 500 faster than any other company in history. When IBM entered the P.C. business in 1981, with it’s computer made from off the shelf components, Apple’s technology was so much more advanced it seemed like little threat. Yet, now, 23 years later Apple is barely clinging to market share in the industry it created. How did Apple fall from its place of high power? What can the world learn from Apple’s mistakes?

The story of Apple is the story of strong personalities. Apple was founded by Steven Jobs, Steven Wozniak, and Michael Markkula. Wozniak was responsible for the technical wizardry, but Jobs was responsible for the spirit of the company. Jobs was a perfectionist, and demanding. On the plus side, Jobs was also great at recognizing the commercial value of new technologies. For example, he saw the GUI at Xerox’s research Center and recognized what it could do for Apple. The GUI was used in the Macintosh, the cute friendly machine that changed the idea of computing forever. However, he was also arrogant and convinced that he knew what was best for the company. He saw Apple as a company that would change the world, one huge innovation at a time. And, perhaps most importantly, he created a culture where ideas were not shared, and competition was avoided. Apple didn’t want anybody else’s help.

This attitude contrasts greatly with the attitudes of IBM and Microsoft. The IBM PC, introduced in 1981, used an Intel chip and Microsoft operation system. Their off the shelf computer could easily be copied, and copied it was. Many companies started making and selling IBM compatibles, thereby creating the industry standard. Apple, however, refused to license the Macintosh, and got left behind. The issue of licensing came up several times in Apple’s history. Bill Gates urged Apple to license in 1985, as did many people from within the company. There were many reasons to support licensing, for example: the companies that licensed Mac would add credibility to the architecture, each company would add innovations to the basic system, customers would see competition and know that they had price/performance options, it would increase hardware, software, and marketing support, it would help make Mac the standard. However, every time the idea of licensing came up, it got shot down by someone from within Apple. Apple had a consensus culture, which sometimes meant that one loud person opposing an idea could keep the idea from becoming reality.

By not licensing the Mac, Apple lost market share. As Wintel computers became standard, developers started writing software for IBM compatibles, not Mac. Also, Microsoft gave developers more support, and was helpful when answering their questions. Microsoft gave developers free copies of operating systems before they were released to the public. Apple, with its culture of secrecy, was notoriously unhelpful towards software developers. So, even though the Mac was technologically much more advanced than IBM compatibles, software developers chose to write programs for IBM compatible machines.

Another cultural difference between Macintosh and Windows was how the companies saw themselves. Apple strove after brilliant technological innovations, strove to change the world. Apple also didn’t want to release anything that wasn’t perfect. These factors led to huge spending in Research and Development with very little output, especially when Spindler was CEO. Many projects sunk billions of dollars, but came to naught. Sometimes the engineers tinkered with ideas but never got them working, sometimes the engineers accomplished great things but there was no spokesperson to actually turn their accomplishments into a product, and sometimes things got cut for no good reason at all. Apple was disorganized, with hundreds of people running around trying to create the next big thing, but nobody directing the creative energy. Microsoft, in contrast, was content to change the world one small improvement at a time. Windows, when it first came out, was nowhere near as advanced as the Mac. Mac had a good ten-year lead on technology. But, Windows engineers kept chugging away, introducing an improved version every few years. Windows engineers knew where to focus their energies, Gates had a plan. Windows was notorious for having bugs, but Gates allowed buggy versions to be released. Although they weren’t perfect, they were still improvements, and software developers wrote programs for them, which people wanted. And, in the end, it was Windows, not Apple, that took over the world.

What are the lessons, in brief, to be learned from Apple? Don’t be arrogant and welcome competition. Work for small improvements so that the industry doesn’t sweep you aside while you’re waiting for the next big thing. And become the industry standard, don’t fight it. Apple, with it’s arrogant, change the world attitude, got swept aside in the industry it created.



This page drew heavily upon material from the book "Apple", by Jim Carlton, published by HarperBusiness, 1998.

A few related websites: