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Apple Businesses

The Economist on Apple, the iPhone, and Innovation 171

Posted by Zonk from the talking-bout-idea-germination dept.
portscan writes "This week's Economist has a special report on Apple, Inc. and innovation. 'The fourth lesson from Apple is to "fail wisely". The Macintosh was born from the wreckage of the Lisa, an earlier product that flopped; the iPhone is a response to the failure of Apple's original music phone, produced in conjunction with Motorola. Both times, Apple learned from its mistakes and tried again. Its recent computers have been based on technology developed at NeXT, a company Mr Jobs set up in the 1980s that appeared to have failed and was then acquired by Apple. The wider lesson is not to stigmatize failure but to tolerate it and learn from it: Europe's inability to create a rival to Silicon Valley owes much to its tougher bankruptcy laws.' There is also an article on the business of the iPhone and the future of the company. "
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The Economist on Apple, the iPhone, and Innovation More

The Economist on Apple, the iPhone, and Innovation

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  • Apples the king at failing (Score:5, Funny)

    by Richard McBeef ( 1092673 ) on Friday June 08, 2007 @02:45PM (#19442933)
    I mean, hell, they've been a doomed company for what 10 years now? 12?

    • Re: (Score:1, Offtopic)

      by soupd ( 1099379 )
      Yeah, they're failing to the tune of billions dollars of year in profits. What on Earth if wrong with this doomed company?

      • Re: (Score:2, Funny)

        by Anonymous Coward
        Yeah, they're failing to the tune of billions dollars of year in profits. What on Earth if wrong with this doomed company?

        Exactly. They can't even fail as a company without screwing it up by making a profit.

        The fact that they are continuously failing at failing is proof that the aforementioned pattern doesn't always hold. Obviously, this means that the article is wrong and that the iPhone will be a failure and could result in the company finally managing to fail which would in turn actually validate the a

    • Re: (Score:3, Insightful)

      by thermopile ( 571680 )
      In addition to being the king at failing, this 'beleaguered' company has also been very good at trying. (We zealots prefer beleaguered to 'doomed.')

      Witness, for example, KidSafe. QuicktimeTV. iCards. OpenDoc (for you old folks out there). All innovations that, for one reason or another, didn't take off.

      TFA talks about network innovation -- and Apple certainly does its fair share of that. But they're also willing to try and are willing to accept a few failures here and there. Because of that risk-

      • OpenDoc didn't fail, exactly. It was just Microsoft's fastest embrace/extend/extinguish victim. OpenDoc was OLE before OLE was. In fact, OLE is OpenDoc, I would bet. Remember, OpenDoc was aimed squarely at making MS Office for the Mac have a single file format ("MS Office" format containing OLE-like sub-documents containing Excel/Word/Whatever data) and allowing every app to use it equally (high crimes against Microsoft). Interesting how you can now add a space into its name and append "ument Format" and yo

    • Since I've got some karma to burn: (Score:5, Funny)

      by jstockdale ( 258118 ) on Friday June 08, 2007 @05:57PM (#19445617) Homepage Journal

      I mean, hell, they've been a doomed company for what 10 years now? 12?


      Just longer than FreeBSD's been dying if I recall correctly ;-)

      Netcraft confirms it!

      (In Soviet Russia Netcraft confirms YOU!)

      *ducks*
  • The last thing that enjoyed this much hype was Snakes on A Plane. Remember how good that was when it actually came out? I predict iPhone will share the same fate, and shares of Apple will plummet!
    • sometimes, over-publicity creates a kind of repulsion.. atleast I am feeling that way! it is working against Apple's PR efforts, who want to have 'some' hype floating but this is stinking! It is like the Ubuntu Feisty release: one story for beta, one for RC, one announcing that tomm morning the torrents/iso are available, another one showing screenshots, another dozen reviews comparing with Vista and OSX.. ah!

    • Re: (Score:3, Insightful)

      by DECS ( 891519 )
      >>The last thing that enjoyed this much hype was Snakes on A Plane. Remember how good that was when it actually came out? I predict iPhone will share the same fate, and shares of Apple will plummet!

      I already used that joke on about the Zune!

      In both cases = lots of fake astroturfed excitement, no real excitement from users. The media celebrated the Zune until it was obvious that it had bombed.

      With the iPhone, there is real excitement from users, but lots of criticism from the media, particularly trolls
      • I don't know about you but Snakes on a Plane was genuine enthusiasm among common people, it's just that most of it was for the sheer idea of having a movie titled "Snakes on a Plane" starring Sam Jackson, and not for actually watching aforementioned movie.

    • I predict iPhone will share the same fate, and shares of Apple will plummet!

      Okay, we'll add that to the list of Slashdot predictions along with the iPod and iPod mini.

  • Not to stigmatize failure but to tolerate it (Score:5, Funny)

    by Anonymous Coward on Friday June 08, 2007 @02:47PM (#19442967)
    I keep telling that to my father.

  • Not mentioned in the article: Marketing (Score:5, Insightful)

    by powerpants ( 1030280 ) * on Friday June 08, 2007 @02:48PM (#19442977)
    Apple has cultivated its brand through sleek products and sexy advertising. The first major MP3 player (ignoring the obscure MPMan) was the Diamond Rio [wikipedia.org], which looked alright... until the iPod came out. Don't underestimate the importance of style when it comes to selling consumer electronics.

    • Re: (Score:2)

      by jandrese ( 485 )
      The Rio was a disaster for many reasons, many of which were outlined in the Wiki.

      The biggest was the extremely limited internal memory. Apple realized early on that nobody is going to buy a $200 piece of hardware that can only hold 12 songs. You can burn a CD for a heck of a lot less. Early flash based players all had that problem, which is why they were a joke product for years.

      IMHO, it's kinda ugly too. I can tell they tried, but the front face is just too busy.

    • Re: (Score:3, Insightful)

      by Stormwatch ( 703920 )
      It's not just the looks... the first iPod came in '01 with a 5GB drive, and that is still acceptable now. The Rio PMP300 had 32MB capacity, and a later model had 64MB. Sure, that was back in '98, you could say it was a pioneer, whatever, but that was pretty much worthless even back then!
    • The first iPod also came with firewire when I had been loading previous devices over USB 1.1, painful even for the smallest of players!

      It was amazing to see the transfer speed at work when you were used to a world of USB 1.1. That didn't hurt at all.
    • Ugghhh, I remember owning that player, and a few other Rio players. I couldn't even begin to call them decent. Sure they were smaller than a CD player, but the music sounded horrid, and controls somehow sucked more than a CD player, which was about a quarter of the price. No I do not enjoy transferring songs for half an hour just to change a single CD of songs. It was an important player, but man did it suck.

  • Fail wisely, OK (Score:5, Insightful)

    by Junior J. Junior III ( 192702 ) on Friday June 08, 2007 @02:54PM (#19443075) Homepage
    But let's not call iPhone a success yet. It had an exciting demo that got a lot of buzz. It hasn't sold a single unit yet. Expectations are sky high already, so if this one doesn't do as well for some reason -- or even if it just has a slow start for whatever reason -- the perception could be that it's a disappointment, under-performer, or outright failure. It's hard to imagine it being a complete failure, but at the price tag that they're commanding, it's not like you can guarantee its success.

    • Re:Fail wisely, OK (Score:5, Insightful)

      by timeOday ( 582209 ) on Friday June 08, 2007 @03:14PM (#19443435)
      Not only that, but I don't believe the iPhone is a response to the failure of the Rokkr (as claimed by the summary). I doubt Apple invested much in the Rokkr (since there was nothing special about it), rather Apple simply licenced some trademarks to Motorolla - i.e. Apple using Motorolla as an ATM.

      On the other hand, the Newton was a pretty innovative failure, from which lessons were doubtless learned.

      • If Steve Jobs is even a little bit like the person that reading about Apple would lead you to believe, I'd have a hard time imagining that he expected the Rokr to accomplish much of anything. That leads me to wonder why he would've gone ahead with it at all, and I wonder if it wasn't in a way used as a bargaining chip to help get cingular/at&t to make some compromises when the real apple phone came along. Jobs could point to the rokr and say, "Look this is what happens when our awesome Apple/itunes/etc

  • Same with Microsoft (Score:5, Funny)

    by rlp ( 11898 ) on Friday June 08, 2007 @02:55PM (#19443085)
    Apple learned from its mistakes and tried again

    Same with Microsoft, except it usually takes them three tries.

  • Bias (Score:3, Insightful)

    by GWLlosa ( 800011 ) on Friday June 08, 2007 @02:55PM (#19443093)
    So when Apple bombs, its "Learning from Mistakes" and when they get the next version right, its "Insightful Market Understanding", but when Microsoft bombs, its "Rushing it out the door to crush competitors" and when they get the next version right, its "Stealing technology from their competitors". Everyone in business learns from their mistakes and improves their subsequent product, or fails to remain in business. Just look at the stability of the latest IIS vs the earlier ones, for example.

    • Re:Bias (Score:5, Funny)

      by Applekid ( 993327 ) on Friday June 08, 2007 @03:10PM (#19443379)
      "Just look at the stability of the latest IIS vs the earlier ones, for example."

      Clearly that was stolen from Apache. ;)

      Look at it this way, when my sister walks into the women's locker room, she's greeted and smiles and can go about her business. When I walk into the women's locker room, it's screams and thrown soap and a visit from the police. Talk about unfair!

    • Re: (Score:2, Interesting)

      by AKAImBatman ( 238306 ) *
      I can count on one hand the number of times Microsoft got it "right". And when they do get it right, they eventually piss it away because there's no one around to challenge them.

      When did Microsoft get it right?

      * Windows 95
      * Windows 2000
      * Microsoft Office 97
      * IE 5.0

      The 9x series went down the toilet with the release of 98 and ME, while 2000 has slowly evolved into that pretty but useless abomination known as "Vista", MS Office has added gobs of features that really are NOT great (do I want another MS XML Off

      • Re: (Score:2, Informative)

        by GWLlosa ( 800011 )
        *XP/Vista are significantly more stable than the 9x series ever was. *Visual Studio 2005 is much nicer than anything Eclipse puts out *There's the one I cited in the very document you're replying to (IIS). *Exchange Servers. *SQL 2005 Servers. etc. The fact that people get 'used to' a version like Win2k or Office97 does not mean that their successors suck; adding new functionality (which they do) while not breaking anything (which they don't do often) is, by most reasonable criteria, a better product. Th

        • Re: (Score:3, Informative)

          by AKAImBatman ( 238306 ) *

          *XP/Vista are significantly more stable than the 9x series ever was.

          XP/Vista are part of the Windows 2000 (from NT) line. Or did you miss that part?

          * Visual Studio 2005
          * IIS
          * Exchange Server
          * SQL Server

          None of the above have ever been all that good. Visual Studio always had stiff competition, but managed to play the "OS Maker" card to get in the lead. (Anyone remember when the only C/C++ compiler that supported the "new" Windows 95 was Microsoft's?) Exchange Server has always sucked. It just sucked less tha

  • Is there anything to suggest that the iPhone is or will be a success? Perhaps it won't fail as spectacularly as their earlier try at a phone.. But it's facing hefty competition from dozens of windows mobile devices, blackberries, and even just plain old devices that only have one function, but do it extremely well. Hey, some of the windows mobile devices even look pretty stylish! Not to forget, you can buy 2 laptops for the price of the iPhone AND the 2-year contract that comes with it..

    As for me personally
    • Why is GPS the killer app? Are you lost all the time? Are you relying on your phone in the wilderness (in that case, are the phones you looking at loaded with topo maps)?

      Easy Google Maps access is enough for me, as long as I know what city I'm in. That problem hasn't come up in years. :-)

      • Re: (Score:3, Interesting)

        by R3d M3rcury ( 871886 )

        Why is GPS the killer app?

        First, GPS is way cool.

        Second, I hate telling things where they are when the technology exists for it to know. The "Calamari" iPhone ad was a great example--"Hmm, where's a good seafood restaurant close to where I am."

        Third, there are times when I don't know where I am when I'm driving. While I hate people who stare at their GPS while driving, it is handy to at least have a device that says, "You missed the turn."

        Fourth, I like the idea of a device that knows where I am and can configure itself appropria

        • Re: (Score:3, Interesting)

          by SuperKendall ( 25149 )
          Second, I hate telling things where they are when the technology exists for it to know. The "Calamari" iPhone ad was a great example--"Hmm, where's a good seafood restaurant close to where I am."

          That's a useful feature, but if it's easy enough to set a few default locations that you frequent not very much less useful.

          Third, there are times when I don't know where I am when I'm driving. While I hate people who stare at their GPS while driving, it is handy to at least have a device that says, "You missed the

          • That's a useful feature, but if it's easy enough to set a few default locations that you frequent not very much less useful.

            But the whole point is...I don't have to! I don't have to tell the stupid device where it is because it already knows!

            That's what makes it great--I don't have to configure the device for all of it's possible locations and then select the configuration based upon my location. The bloody machine knows. If I get a flat tire on my bike, I ask "Where's the nearest bike shop?" and it tells me. I don't have to set 10 waypoints along my route. Heck, if I'm driving and I have a problem, I'm not at the mercy of

  • ..."Plan to through your first efforts away... because you will"

    But really, there's wisdom there. You never really know what will be successful until you've gotten something out and developed. If only business people understood that, they could likely leverage it to do exactly what this article recommends -- "fail wisely".

    • Re:Like we say in software development... (Score:5, Insightful)

      by Timesprout ( 579035 ) on Friday June 08, 2007 @03:13PM (#19443427)

      You never really know what will be successful until you've gotten something out and developed. If only business people understood that
      Business people underatand this perfectly well. They also understand the costs associcated with getting to this stage and believe it or not they are clued up enough to understand that if they commit to this cost to just 'get something out there' and it fails then its probably game over for the business.

      This is not something Apple are just chucking out into the market place, large amounts of reseach, market analysis and product developement will have been done before the iPhone got green lighted. There is still an element of risk the iPhone will tank but Apple will have done as much as they can to reduce it.

    • ..."Plan to through your first efforts away... because you will"

      Looks like you just threw away your first effort at spelling.

      (Not a spelling Nazi. Just trying to be funny.)

  • Tough bankruptcy laws? (Score:5, Interesting)

    by C10H14N2 ( 640033 ) on Friday June 08, 2007 @02:58PM (#19443153)
    What sort of political shilling is that?

    Perhaps the author should look towards Central Europe ca. 1991-2001 to see what economic wonders occur when you have /loose/ bankruptcy laws. It was GREAT for the "entrepreneurs" and loan officers working on "commission" when you could write a loan to finance your business, liquidate it, write off the loan having effectively pocketed the cash, then walk straight back to the bank to pull a new one for a new business, rinse, repeat and retire to the Caymans having produced absolutely nothing.
  • I'm not big into the cell phone hype. My current phone is an LG freebie. But after seeing a iPhone demo, I just have to drool. It's like a cell phone and a kick ass Palm but better.

    I'm on the verge of getting one, but it's kinda of expensive so I'm indecisive. But if they do release a SDK, that will be the deciding factor. Phone wise I don't care, but the PDA/computing options for it are just sweet.

  • Mac wasn't born from the Lisa blunder (Score:4, Informative)

    by Anonymous Coward on Friday June 08, 2007 @03:00PM (#19443185)

    The Macintosh was born from the wreckage of the Lisa, an earlier product that flopped

    Not quite, they were developed at the same time. The Lisa project began in 1978 and released in 1983. The Macintosh, 1979, released 1984.

  • Makes sense! (Score:5, Funny)

    by Shky ( 703024 ) <shkyoleary@NOSpAm.gmail.com> on Friday June 08, 2007 @03:01PM (#19443191) Homepage Journal
    I tried telling my parents when I was in high school that those were *wise* failures they were seeing on the report cards. If only this article had been around back then...

  • The Motorla ROKR was designed to fail with the arbitrary 100 song capacity limit.

    The last thing apple wanted was a successful ROKR that might have cannibalized sales from the iPOD and the Apple branded music phone that everybody knew would come out eventually.

    If the ROKR were an Apple product, you could make a case that Apple "failed", in this case Apple succeeded, they held off the market until they could debut their own device that makes them money.

    • Re: (Score:2)

      by jandrese ( 485 )
      My wife has a ROKR. It really took more of a beating than it deserved IMHO. The 100 song limit was retarded, but with the 512MB of memory onboard you were hard pressed to exceed it anyway. People didn't harp on the stuff that really mattered about the phone, like it's tendency to run the battery down after a mere two days of idle time and the flimsy proprietary data and power connectors. The default firmware setting was also a little confusing on it, since it was designed to go into "sleep mode" after 1

  • Motorola Phone Failure Was Intentional (Score:4, Insightful)

    by Bones3D_mac ( 324952 ) on Friday June 08, 2007 @03:05PM (#19443297)
    The iTunes-compatible motorola phones were always intended to fail from day one. They were severely crippled compared to most low-end MP3 players at the time. The only purpose these phones served was to see if there was a market for phones with iPod-like integration, but only with features so excessively limited that Apple could crush it at any time by entering the phone manufacturing business themselves.

    Comparing the Motorola phones to the Lisa probably has every Lisa in the world rolling over in their mass-grave.

  • Buy Palm? (Score:5, Insightful)

    by bill_mcgonigle ( 4333 ) * on Friday June 08, 2007 @03:05PM (#19443299) Homepage Journal
    I wonder what their response will be to the failure that will be hitching their reigns to Cingular for 5 years.

    Did anybody notice ex-Apple VP of iPod Jon Rubenstein is now Chief XYZ at Palm? Does the investment firm that took the Palm stake have any other Apple ties?

    I mean, if Apple acquired Palm, and Palm already has deals in place with Verizon, Sprint, NexTel, et. al., well, Apple couldn't very well not honor those commitments. And Palm just happens to be re-tooling their XScale phone to run on a small Unix OS (Linux). So, it wouldn't very well make sense to develop two completely different yet entirely similar products, would it?

    But, hey, I've been known to claim the 3GHz promise was just a strawman to excuse sacking IBM. Steve learned from his NeXTMachine failure that a software company is better off using cheap commodity hardware.

    • But, hey, I've been known to claim the 3GHz promise was just a strawman to excuse sacking IBM. Steve learned from his NeXTMachine failure that a software company is better off using cheap commodity hardware.

      I was under the impression that Apple's biggest reason for dumping IBM wasn't the lack of a 3GHz cpu, but the lack of any kind of G5 small/cool enough to put in a laptop. There was a good year or so where Apple was putting out G5 based desktop machines in the form of iMacs and Power Macs, but failed to

    • Re: (Score:3, Interesting)

      by voisine ( 153062 )
      You know, I actually see this as a reason to invest in AT&T wireless. Remember when Apple announced they were switching to Intel and everyone was like, Intel?!? They're a sinking ship. Why the hell didn't they go with AMD? AMD's eating Intel's lunch!

      Right now Verizon is the carrier to have for high speed wireless data with EVDO, but the thing about AT&T is that they're building out HSDPA which is several times faster than EVDO and the planned upgrade path for the majority of cell networks globally.
      • I don't know who they "should" have gone with, but we've been quite happy with Tmobile. My personal pet theory is that their coverage is quite mediocre but that the free phones have exceptionally good reception for free phones.

    • Re: (Score:2)

      by pohl ( 872 ) *
      There could be something to that. (Very close to fake bill's greatest fear [blogspot.com], by the way. :-)

  • Speaking of failures... (Score:2, Interesting)

    by Anonymous Coward
    One definition of an expert is someone who has triewd every conceivable way of doing something wrong.

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