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How Apple Had a Spectacular Year 504

Posted by samzenpus
from the beating-the-odds dept.
Hugh Pickens writes "John Boudreau writes in the Mercury News that during its just-completed fiscal year, Apple broke four consecutive quarterly revenue and profit records and amid the worst recession in decades, hired thousands while others cut jobs, but what most distinguishes Apple is that while other tech titans spent 2010 cutting costs and acquiring new technology through mergers, this $65 billion company has been relentless in innovating like a startup and ruthless in promoting technologies that disrupt its own product lines. '"It's been an awesome year. The frequency of new stuff just boggles the mind," says Charles Wolf, an analyst with Needham & Co. "There is no company that is remotely close to what Apple is doing. They are the Energizer Bunny." In September 2005, Apple killed off the popular iPod Mini to make way for the the iPod Nano; Apple openly acknowledges that the iPhone is cannibalizing its iPods — and they don't seem to care; and the iPad tablet could ultimately threaten its core laptop business. "[Apple] has a different cultural mind-set," concludes Wolf. "They are acting like a startup, though they are becoming a $100 billion company."'
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How Apple Had a Spectacular Year

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  • cannibalizing? (Score:4, Interesting)

    by gordo3000 (785698) on Sunday November 28, 2010 @04:11PM (#34367184)

    Why wouldn't you release the iPhone, a beefed up iPod + phone service, which gives you much larger profit margins, and having everyone who bought an iPod upgrade for a significant extra outlay? I'm confused.

    Again, how does the iPad, which can't connect to a printer, run multiple apps at once, connect to most peripherals easily cannibalize your laptop sales? It's like saying when Sony introduces a new netbook or ultralight laptop model they are cannibalizing their other sales. This sounds like apple worship. Give credit where it is due, don't start acting like they are doing things no one else does with their business lines.

    and where do they get 65 billion from? the market value is 250 billion+.

  • Re:New Technology? (Score:4, Interesting)

    by burris (122191) on Sunday November 28, 2010 @05:09PM (#34367818)

    Apple is a software company that sells most of their software inside custom hardware. The hardware isn't special, its pretty much the same as anything else, but what makes it better than everything else is the software inside. In fact, the main reason they sell hardware is to ensure the software works perfectly.

  • Re:Props to Apple (Score:5, Interesting)

    by bennomatic (691188) on Sunday November 28, 2010 @05:21PM (#34367930) Homepage
    Actually, "we think..." might be core to Apple's success, but not for the reason the GP implies. Maybe they only release products where they can say that with some level of sincerity. Do you think that ANYONE at Microsoft thought about the Kin, "We think this is the best solution"? Or WebTV? Or PlaysForSure? They may have been able to say, "This is an also-ran means of allowing us to capitalize on the innovations of others."

    And other companies? I'll bet Google engineers have thought that about their products. But Dell? HP? Hell, HP even sold branded iPods a few years back, because they couldn't make a music player that would come anywhere close to the iPod's popularity.
  • by Archangel Michael (180766) on Sunday November 28, 2010 @05:45PM (#34368146) Journal

    iPods we only for Mac users at first. I saw one and saw what Creative had and iPod was better. I almost bought a Mac just to have it handle my MP3s. I know a few people who did.

    If you compare the basic functionality only, there was no difference. The "marketing" was that it was easier than all the others. It still is. If you buy a MP3 player that is not iPod, what do you get to manage the tunes? WMP? WinAmp? How does it sync? Push button automatic or do you have to mount it like a drive and copy the tunes over manually? Honestly, I don't know. I just know that iPods just work, and no worries about having to learn how to get stuff done.

    iPhones are the revolution in smartphones for the rest of us. Sure Blackberries existed, but they were (and still are) mostly for Corporate. iPhones made the Smartphone market. Droids are close behind.

    iPads have made the Tablet market. Now everyone wants to make a tablet, and they all are copying Apple's design. And iPad is still a better tablet than exists elsewhere. Android Tablets may compete with them, but I don't see Acer, HP, Dell or any of the others that are making tablets that don't suck.

  • Good vs. Great (Score:5, Interesting)

    by plsuh (129598) <(plsuh) (at) (goodeast.com)> on Sunday November 28, 2010 @06:08PM (#34368382) Homepage

    Just a quick comment from a former Apple employee; most people are familiar with the old saw, "Perfect is the enemy of good enough." I.e., instead of trying to get something perfect, you should get it good enough and then ship it. Within Apple the perspective is slightly different. There, it's more along the lines of, "Good enough is the enemy of great." I.e., good enough isn't acceptable -- for an Apple-branded product we're going to look for the next level of polish and care that differentiates our stuff from everybody else's.

    I think this comes from the fusion of NeXT and Apple engineers. Most people recognize that NeXT brought a heckuva foundation for Apple's next generation operating system to the table in 1997. However, few people recognize what Apple brought to the table -- an engineering culture that regards rough edges as anathema. There was plenty of NeXT software, but much of it was very rough; it wasn't easy to pick up for the new user, was missing essential features, crashed often, or all of the above. This was a direct consequence of the fact that Foundation and AppKit allowed you to create apps quickly and easily, but then as a software developer you still have to trap errors, check for corner cases, add documentation, tweak the UI design so that common tasks are easy to accomplish, etc. This can easily take three to four times as long or more as standing up the initial core functionality. Most NeXT apps never went through this stage and so they lacked the polish for mass market users. Once the NeXT technology went through the polishing process (and it took four years before the first consumer release, really five years and 10.2 Jaguar before it was truly ready for my mom!), the new OS was a completely different animal from OpenStep 4.2 -- much more polished and suitable for mass-market consumers.

    --Paul

  • AAPL (Score:3, Interesting)

    by krray (605395) on Sunday November 28, 2010 @06:52PM (#34368742)

    Thank God for Apple stock (for me at least :).
    I remember in ~October of 1998 thinking of buying AAPL. It was floating around $5/share I believe.
    Everyone was telling me to buy Microsoft. By this point I was becoming a "ABM" system administrator. They're stock was floating right about where it is today (~$25/share)...

    The only stock I'm interested in is companies I believe in that produce something I like. Day trading in some chemistry company I know nothing about does not Interest me.

    I hesitated (and was second guessing myself in those days). I could have tripled my money in that one year with AAPL.
    In that same year there was a MSFT split AND they nearly doubled their price. They've been dead since...

    Bottom line -- a decade later and both companies have each had two splits. My $15 APPL stock is worth over $315 (today) while MSFT is still at ~$25/share. There is a reason for this. Microsoft has forced people to use their crap and those days are seriously numbered. Apple, OTOH, gives their customers what they want. Thus they become foaming at the mouth Apple loyalists like myself. I understand now (and am laughing all the way to the bank).

    In looking at these two companies Apple has pretty much always been innovative and led the pack. No floppies with a Mac? People laughed. See many floppies today? Microsoft has historically always been a "me too" company (with very few exceptions).

    The ONLY product that Microsoft has done that makes me shake my head and wonder why Apple didn't do it is the KIN. Cool idea. Problem: WHERE is Apple's gaming console???

  • by joh (27088) on Sunday November 28, 2010 @07:23PM (#34368972)

    The products really aren't that "revolutionary", and certainly not magical. In fact, they're pretty ordinary. What separates Apple from the rest (and a lot of people's money) is the cult-like status they've built amongst a small but big-spending segment of the population. You HAVE to have the latest because it's the greatest thing that will ever be and ever has been.

    There is certainly a good amount of marketing and hype going on, but assuming that this is all is just silly. There's an awful lot of otherwise perfectly intelligent people who manage to ignore all the really good ideas Apple has by thinking there is nothing but marketing and hype and "cult".

    The thing is that "ordinary people" attach quite a bit of importance to things like elegant industrial design on the front *and* the back of devices, to lids you can open with one finger without overturning your laptop, to good large touchpads, to ports lined up right side up on one edge of the thing, to batteries that last a good while, to chargers that won't have destroyed the battery after half a year, to not having silly feet under your laptop to give the exhaust grilles room to breath at least as long as you don't try to use the thing on a bed or a soft carpet, to cases and screens and keyboards you can actually keep clean...

    The point isn't that Apple is insanely great or "magic". The point is that most others are insanely bad. There is no "magic" in Apple products, there's just the most mundane cheapness and thoughtlessness in the majority of all products and every exception to it gets *noticed*.

    Hell, my MacBook is two years old now, I use it 10 to 12 hours a day, carry it around and treat it like a good friend (that is not very careful). It looks as new and it still has 100% battery capacity. If this is just cult I would love to see this cult applied to more things. It works great and surely it must be much cheaper than trying to reach the same results by decent engineering and design.

  • Re:Props to Apple (Score:3, Interesting)

    by blackraven14250 (902843) on Sunday November 28, 2010 @07:45PM (#34369096)
    The Samsung Captivate is pretty nice, TBH. It rivals the iPhone very well on AT&T, and is lighter and thinner than the iPhone, while providing better battery life.

    I think this is the serious contender that the iPhone needed on AT&T after owning both for a while. Before this phone, nothing even came close to an iPhone on AT&T.
  • Re:New Technology? (Score:3, Interesting)

    by node 3 (115640) on Sunday November 28, 2010 @08:10PM (#34369304)

    The hardware isn't special, its pretty much the same as anything else

    Glass and aluminum is far from common. The batteries in the current notebooks, magsafe, A4 cpu, the new Air's flash drives, glass trackpads, unibody cases, even something as simple as the integrated graphics Apple uses are far from ordinary.

    That's not to say some of these things aren't available or won't available from other sources (although some certainly aren't), or that there aren't other products with similar but different features. My point is simply that their hardware is far from "pretty much the same as anything else". Even their motherboards, while PC compatible, are unique.

    Apple's hardware stands out just as much as their software. That's why their products are so compelling, they manage the entire system.

    In fact, the main reason they sell hardware is to ensure the software works perfectly.

    Not really. You could just as easily reverse hardware and software and end up with the same rationale. The reason they sell hardware is because that's where their profits are, but you really can't separate the two at Apple. The hardware benefits from the software and the software benefits from the hardware. Apple is the last true computer systems company in the consumer sphere. That's why they are doing so much better then all of their hardware competition, and have even surpassed Microsoft in revenue (and before that, market cap).

    That's also why it's nice to see HP working on the whole widget with the acquisition of Palm. I don't think they'll be able to beat Apple in the tablet space, but it's definitely a move in the right direction. While it would be very hard for a PC manufacturer to create a compelling OS to go along with it (even if they built it atop Linux or *BSD), but in the tablet realm, Windows is dead and everything is starting fresh.

  • by node 3 (115640) on Sunday November 28, 2010 @08:22PM (#34369448)

    No, that's not what he's saying, but he did describe the type of person you are in his post though, the Slashdot user that sees many of Apple's products' features as "objective negatives". It's no surprise that once you negate all the things that makes Apple's products appealing to the vast majority of people, all you can see remaining is a fashion accessory.

    To understand his point, you don't have to have to find those negatives as positives for you, but you do have to realize that they are subjective values and for some people, they are positives. Once you do that, it's easy to understand why so many people buy Apple products, and it's nothing to do with them being mindless sheep tricked by shiny baubles. They just have different values than you, just like your choices are based on your values which are different from theirs.

  • by Kludge (13653) on Sunday November 28, 2010 @08:51PM (#34369764)

    it's making products that work

    This whole Apple-products-just-work spiel is plain marketing BS.
    Two months ago my sister bought my dad an ipad. Guess who got to spend 5 hours this past weekend helping him try to get it working in various ways. That's right, me.

    First he wanted to update the OS. So I read the instructions:
    Hook your ipad to a computer and then run iTunes. Follow the instructions from there.
    That's it. Well iTunes is a program on my father's ipad, it is a web site from which Apple sells music, and it is a program that one can get for their desktop machine. WTF are they talking about? In their effort to simplify everything for stupid people, Apple has named everything "iTunes", creating substantial confusion. iTunes is a program that gets music from Apple, it syncs your device's content, and it is used to update your device's OS. Of course.

    So after my father realizes he forgot his "Apple ID", we play 20 questions to get a new password. ("This is like taking a God damn exam. Why can't I just get the update software?") Then the software starts downloading. An hour later we get "Unknown error 1602." Shit. Disconnect ipad. It won't run. It is foobarred. Our only option is to "Restore" the ipad, which it tells us will wipe all programs, books, videos, photos and music from the ipad. WTF!? Apple didn't put the OS on a different partition from the media? Are you serious? So we wipe the iPad and my dad spends a couple more hours putting stuff back on it.

    Then he wants to hook the iPad to my TV set. So we go to a store for a video connector, because the video cable is nonstandard. (Good idea, buy a device with a nonstandard video out, mumble, mumble.) Store is out of them. Drive to another store. Pay an absurd amount of money for a six inch cable. Hook iPad to TV. Nothin'. Check cables, etc. etc. An hour later, read on web. It turns out that only certain programs can be displayed on the TV out. WTF?! Who would buy a device that limits what you can see on an external monitor? Apple is making Microsoft look good here. After another hour of mucking around with the device we finally get it to show the Netflix video on my TV. It looks like shit. The video is only half the size of my screen.

    My dad is typing an email. He gripes about the screen not being easy to type on, but says you can get a keyboard for it. I say, I have keyboards! But, hey, there is no USB connector on the device! Are you serious? You can't just plug in a keyboard or mouse? WTF?

    People buy Apple products due to hype, marketing, and they think the products make them look cool. That's it. I have fewer problems with my Linux laptop. It just works.

  • Re:Good vs. Great (Score:2, Interesting)

    by jmottram08 (1886654) on Sunday November 28, 2010 @09:07PM (#34369912)
    Someone tell iTunes this. iTunes is between malware and wasted space. It is the ONLY program to ever crash win7 in about a year. How do you even do that? How can a program that handles mp3s be more unresponsive than editing a hi def video in an adobe product? Literally. I mean, it is Shocking how bad iTunes is written.
  • by DJRumpy (1345787) on Sunday November 28, 2010 @09:11PM (#34369954)

    I couldn't have said it better myself. In the end, the primary things that are important to a typical end user are ease of use, quality of features, customer support, and design excellence, all of which Apple excels at producing.

    A simple example is product activation. There is none for OS X. Its something that many end users of Windows will hit at some point in their day to day use and upgrades of a Windows OS. They are treated suspiciously, and in short, like criminals if too much of their hardware has changed. Apple treats their customers like customers in this respect. There are no limits to your install, no activation keys, no phone numbers to call, and no tedious 16 digit keys to input.

    Another example is simple hardware reliability.

    http://www.pcworld.com/businesscenter/article/189986/report_gives_apple_top_honors_for_reliability.html [pcworld.com]

    Apple consistently performs at the top spot for reliability, and that makes for happy customers. These are things that they don't need to check the web reviews for, or ask their geek friend for advice. Simple word of mouth carries this sort of appeal to new customers. They are obviously doing something different if they consistently get top grades in product reliability. All hardware is not created equal, even if it comes from China. Apple has a good reputation with it's customers, plain and simple.

    Last but not least, is ease of use. There is a simple expectation that products from Apple are fuss-free. As a general rule, those hold true. They spend a great deal of time and money getting things 'right' so that their customers don't struggle with technology, which in turn also benefits from word of mouth.

    There are many things that a techie can dislike about Apple, but there are many things that they should appreciate. It's willingness to advance new tech even if it is potentially risky in the market place, it's willingness to open source and contribute to open source, it's stance on privacy (google Apple Facebook), and it's basic ability to get people excited about technology in general.

  • Re:New Technology? (Score:3, Interesting)

    by node 3 (115640) on Sunday November 28, 2010 @09:17PM (#34369994)

    The electric car *is* old technology; the first electric cars were built 2-3 years before the first internal-combustion cars!

    And how powerful were they and how far could they run on a single charge? The ability to make a car run on electricity is old technology, but the current electric car (which is clearly what bondsbw was referring to, cars like the Leaf and the Volt) is only feasible due to modern technology.

    And you're really making his point. Are you saying the Leaf and Volt aren't new technology simply because electric cars existed over 100 years ago? That's like saying the Saturn V rocket wasn't new technology because the Chinese had rockets over a thousand years ago!

  • by node 3 (115640) on Sunday November 28, 2010 @09:49PM (#34370218)

    so the sub-standard parts inside an apple computer are a good thing to some people?

    Oh, please elaborate on this! Even the least powerful Apple products have parts that are not even close to substandard. The two that come to mind are the Core2Duos and Nvidia 320Ms in the lower end Macs. Even those parts are above average in the PC world, and those are the worst Apple offers!

    despite the fact that jobs has said on at least one occasion that his products are about marketing more than anything else.

    Since he's said this so many times, surely you can dig up a link? There's absolutely no way possible he said anything like that.

    I would say this is a more likely explanation, and that apple customers have that rare combination of technical ineptitude, elitism borne out of insecurity

    Elitism borne out of insecurity describes more Apple-haters than Apple fanboys. Using a term like "technical ineptitude" is a perfect example of that.

    it would be true to say that when you buy apple kit you're paying a tax on stupidity. a stupid tax, if you will.

    No, it wouldn't. As has been shown over and over, Apple products are no more expensive, and are often cheaper, than equivalent PCs, and that's even after having to make concessions for the PC in aspects in which there are no equivalents (like the unibody cases and glass screens, mag safe power connectors, the new innovative batteries in Apple's notebooks, etc.).

    Ironically, if there is a "stupid tax", it would more aptly describe non-Apple customers. Look at the prices, specs and quality of most iPad "competitors". However, I wouldn't use a term like that since it's exceptionally arrogant to call people who have different values than me "stupid". Stupid means less intelligent, not "likes different things". If someone buys a less capable but more expensive Android phone because they want to hack the OS, that doesn't make them stupid, it just means they have different preferences than I do.

  • Re:Props to Apple (Score:3, Interesting)

    by node 3 (115640) on Sunday November 28, 2010 @10:10PM (#34370410)

    Hint? How much did it take them to release Core-i based machines? While HP and the rest of the big guys already had even i7 laptops out there, Apple was still lagging behind with their Core 2 Duo line.

    Your "hint" is an anomaly caused by the lawsuit between Intel and Nvidia which stopped Nvidia from making chipsets for the Core iX CPUs. Apple is at the leading edge of technology more often than not. Citing an example of "not" does not change this. In fact, the existence of some number of exceptions is not only implied, but explicitly stated.

    Why am I making this point? Well, I have a good memory, and I remember 1997 commercials [youtube.com]. They always claimed to have the fastest prettiest bestest machine ever, but the truth is, they're not into that anymore.

    The integrated graphics (see above) in their lowest end consumer products are the fastest on the market. Even the CPUs are generally high-end in their lowest end consumer products. They lead the way to the Intel CoreDuo and later Core2Duo line. They lead with the Core i5 and i7 on the iMacs (you'll notice they don't sell any Core i3s). On the Mac Pros they quite often sell CPUs that are faster than any publicly available from Intel.

    Anomalies don't make for a solid argument.

    So why don't they just give up their computer line and start selling OS X for PCs? Plenty of people like it but not a lot are interested in buying overpriced Macs.

    Fortunately they don't sell "overpriced Macs". They just don't sell low end computers, so their lowest prices start higher than the competition, but their specs also start higher as well. In many ways, their hardware has no equal in the PC world. The reason they don't sell Mac OS X for PCs is because there are no computers out there better suited for it than Macs. Peruse the Hackintosh sites if you don't believe me.

  • by node 3 (115640) on Sunday November 28, 2010 @10:38PM (#34370662)

    The hardware isn't special because it’s made by other people.

    Non sequitur. Just because someone else makes the hardware doesn't mean it's not special. The 320M was made specially for Apple. The A4 is designed by Apple, even though Samsung manufactures them. I don't know who makes the retina display, the glass trackpad, their new notebook batteries or the unibody aluminum cases, but these are all unique to Apple.

    Even if Apple didn't have unique individual components (but they do), and even if all the parts were simply standard off-the-shelf components (they aren't), even then, the unique combination counts as special.

    Not only is Apple more technologically involved in their products' development than most Slashdot types seem to think, it's difficult to think of a single company that is more technologically interesting than Apple. Dell? HP? Cisco? Sun/Oracle? Intel? AMD? Nvidia? WD? Acer? Asus? None of these companies come close.

    Although of the lot, Asus does tend to make a lot of interesting prototypes which, ironically, tend to be the "neat, but doomed to failure" duds that Slashdotters claimed products like the iPod and iPad would be.

  • Re:New Technology? (Score:3, Interesting)

    by Cimexus (1355033) on Sunday November 28, 2010 @10:51PM (#34370736)

    I'm in full agreement with your post - Apple products aren't "inferior" unless the only thing that matters to you is performance bang for buck, or sheer number of features. But for many people, these simply AREN'T the things that matter. They are looking for quality, reliabilty and ease of use. But not everyone who buys Apple does so for the same reason.

    For me, even though I'm a geek and generally against locked down hardware/software ecosystems, it comes down to hardware quality. How it looks and feels. Simple as that.

    Pick up a typical Dell/HP/Asus/Toshiba/etc laptop by a corner. Feel that cheap plastic casing flex under the weight. Hear it creak. Close and open it and feel that cheap plastic clip click into place in a way that lets you just ~know~ it's going to break after a year or two.

    Now pick up a Macbook Pro in the same way. It's chalk and cheese. Apple get away with charging 2x what others do for the same specs (CPU, RAM etc) because of various reasons ... it's ignorance for some people, true ... but I'm as techy as they come and I see the attraction. Solidly built hardware makes a HUGE difference to how people feel about a product and how confident they are in it.

    Now because I'm a geek and like to tinker, Apple's relatively locked down ecosystem of products doesn't appeal to me, just like it doesn't appeal to quite a lot of Slashdotters. But for appliance-type objects like a phone, music player, or coffee-table web/ebook reader (i.e. tablet), yes, I choose Apple. I don't care about their performance or the ability to run arbitrary code on these kind of devices. I just want them to work well and not get in the way, and to feel solid and well-built in the hand. When I want to tinker I'll fire up one of my PCs or non-Apple laptops.

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