Why Apple might be better off without Steve

I know there are probably already nasty emails on their way to my inbox based solely on the headline of this post. Apple better off without Steve? How is that possible? It’s difficult to even think about the iconic consumer electronics company — now so much more than just a computer maker — without thinking about Steve Jobs. Apple is Steve Jobs, and Steve Jobs is Apple. That’s one of the main reasons why so many people (me included) were so concerned that the company come clean about Jobs’ health over the past few months — because he is so intertwined with the company in people’s minds and certainly in investors’ minds. Every time he appears in a photo looking gaunt, the share price tumbles. How could the company possibly be better off without a man who is a strong CEO, visionary genius and celebrity spokesman all rolled into one?

For the record, I’m not saying that Steve Jobs should cut his ties to Apple, and I realize that speculating about his departure is going to be seen as in bad taste by many people, given his personal health issues. I wish him nothing but the best, and I hope he is around for many years to come. There is no question that Jobs’ vision and laser-like focus on usability and value have worked miracles on Apple’s business model and its share price over the past few years — miracles that many seasoned industry observers never imagined were even possible. So how could not having him around be a good thing for the company? Just stay with me for a minute.

Let me put it this way: While Apple is a successful and widely-admired company with some excellent products, in many ways it is also pretty close to being a cult, as more than one person has argued (with the latest being Dan “Fake Steve Jobs” Lyons, who writes in his recent Newsweek column about how the company is treated with kid gloves by most of the mainstream media). This is hardly surprising, when you think about how low Apple had fallen just a few short years ago. Anyone who can take a company like that and turn it into a market-leading powerhouse with a stock-market value of $75 billion is going to inspire not just admiration but an almost religious devotion.

There’s no question that this has helped Apple immeasurably over the past few years, as it has climbed out of the hole it was in to become a market leader. Devotion to Apple products is so intense that the company has had to do virtually no traditional marketing — or at least very little — nor does it have to focus all that much on crude market instruments such as price. As Apple has started to make the transition from being just a small, niche computer maker into a Sony-style (s SNE) consumer electronics player, however, it has arguably moved beyond where the personal magnetism of Steve Jobs or the passion of Apple acolytes can take it. Not everyone knows the story of how Steve rescued the company, and not everyone is as mesmerized by his keynotes as Apple devotees.

My argument is this: If the company wants to continue expanding its market reach, it needs to move beyond being just an extension of Steve Jobs and his vision. It needs to find other ways to sell itself and its products, apart from just relying on the inherent desire that Apple fans feel for anything that comes out of the company’s Cupertino headquarters and the personal magnetism of its glorious leader. In other words, it needs to grow up.

52 thoughts on “Why Apple might be better off without Steve

  1. I am a HUGE Steve Jobs fan, even when he got kicked out of the Company. But Apple is clearly not just Steve, and I think it will do very well, even thrive, without Jobs. The supposedly “rational” analysts and stockholders that keep punishing the stock are completely missing it.

    But you completely miss it here, too “It needs to find other ways to sell itself and its products, apart from just relying on the inherent desire that Apple fans feel for anything that comes out of the company’s Cupertino headquarters.”

    Apple has wide and growing appeal – hence it's market share gains, and huge year-over-year growth – it's not simply selling to it's Fanboys.

    I was with you until you showed your ignorance of what makes Apple Apple at the end.

    Maybe study some more and then give it another go.

      • I can't think of a scenario where Apple is a better company with better products without Steve. That doesn't mean Apple /wo Steve is a bad company. It's a different company — it could be just as successful, but it'll be different.

        We're far from the time where, for instance, it was clear Michael Eisner “had to go” from Disney. There's a lot Steve can still bring to Apple, if he wants to and can. Let's not shove him out the door a minute sooner than necessary.

      • This is what makes Apple Apple:

        • COO Tim Cook: There is extraordinary breadth and depth and tenure among the Apple executive team, and they lead 35,000 employees that I would call wicked smart – and that's in all areas of the company from engineering to marketing to operations and sales and all the rest. And the values of our company are extremely well entrenched. We believe that we are on the face of the earth to make great products and that's not changing.

        We are constantly focusing on innovating. We believe in the simple not the complex. We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution.

        We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot.

        And frankly, we don't settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when we're wrong and the courage to change. And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well. And I would just reiterate a point Peter made in his opening comments that I strongly believe that Apple is doing the best work in its history.

        • It should be a dream to work there. Keep going this way. Look to the professional market, frankly you have a lot of work to do to gain market shares there. But the potential is huge, thanks to the cleverness of the OSX platform.
          You should insure IT managers that you will no more let them alone in the desert, but conduce them on the way to a simpler, much more efficient information management system.
          The entreprise culture you describe, if it is deeply implemented, will insure Apple a long, long life, fare beyond ours (I am 53).
          Anyway I wish Steve Jobs all the best, may he live many many years, many thanks to him for what he has brought to the world in his field of action.

  2. Shawn has a good point in that I don't think Apple's success is just thanks to its fan base. But overall I can't deny that I agree with Matthew.

    In the short term, the company is likely to suffer and might even go through some troubled times. At the end of the day, a very leader focused company is almost losing its leader.

    On the other hand, if it can survive this period (it has the right assets to do so), the company is likely to be better off in the long term.

  3. Clearly, having your best quarter is a sign of stupid marketing and “immaturity.” This is not about the company or its products, it's about the stock and its price. People are going to speculate and speculators are going to short and spread rumors. If Jobs gets better, the stock will get over that. If he dies, the stock will get over that, too. It will take longer, but Steve Jobs doesn't conceive, design, manufacture, inspect and ship every Apple product. This nonsense will get old in time.

  4. Sony is about to lose $3 billion dollars for the quarter, Apple just made $2 billion for the quarter.

    Tell me again why Apple wants to be like Sony?

  5. The thing about Apple vs Microsoft (and all other companies) is this: With Jobs, you feel as there's someone *in charge*, accountable. No Cut&Paste in iPhone — that's because of Jobs. Vista is crap — who do you point to at Microsoft? Ballmer? Gates?

  6. Mathew,
    Great comments. Take it one step further, though: in this economy what Apple needs is excellent operations. Meaning logistics, inventory, parts, streamlining everything in the process to cut costs and increase margins. Being disciplined and being lean. That's why Tim Cook is a perfect choice right now. He gets this. He lives this. He is the best of the best at Operations. He will increase the balance sheet while Apple products sell themselves.

    All Apple need concern itself with is making sure they don't get sloppy. No way that will happen with Tim at the helm.

  7. Jobs has, since the beginnings of the Mac, been a features nazi, making unreasonable and very irritating demands for the exclusion of features that EVERYONE wants (cut-and-paste and background apps on the iPhone, FireWire on the current MacBook, a right button on all Apple mice, numeric keypads on earlier keyboards, a keyboard that is comfortable rather than just stylish, a mid-range tower Mac, a floppy drive when he dropped them two years too early). Almost-great products hobbled by an artiste with far more control than he should have. An entire industry has long existed to correct Apple's absurd omissions–the real “Apple Tax” is the cost to the user of correcting these flaws. I'll be glad to see Jobs go.

    • How else do you suppose Apple has been able to grow and maintain high margins?
      FireWire is on it's way out to make room for USB 3. It will be a feature to sell the next batch of notebooks, meanwhile it's omission will save space and money.

      You may not like all that Apple leaves out certain useful feature, but you don't know the reasons that go into those decisions. You make it sound like Steve Jobs is an irrational dictator.

    • TomB –

      All Apple mice have been two-button for years. They only LOOK like a single button. And the software accommodated a right-click for years before that. Most people I know didn't miss the floppy disk, they only thought they would. I was one of those with a 1st-generation iMac who bought a floppy drive. I used it a grand total of three times before giving it away. I agree with you about Firewire (it's vastly preferable to USB 2.0) but Apple's sense for what features to exclude and which innovations to include have usually been more right than not.

  8. Actually, I always like to send people back to 1985.

    Apple was hurting. Apple II sales–the bread and butter of the company–were plummeting. Apple III sales were non existent due to quality issues. Lisa sales were non-existent due to price. Macintosh sales, while okay, were well below projections. Steve had his view of the Macintosh and that was it.

    After Steve left, Apple started listening to their customers. You got machines like the Mac Plus, where you could actually update the memory yourself without owning a soldering iron. You got the Macintosh II, with slots, external color displays, etc. You got SCSI interfaces for attaching hard disks, scanners, etc.

    So, from a Macintosh perspective, I could see Apple being better off without Steve. It's happened before.

    • Peter, great points. However, Apple must be doing something right and that something is they are innovating and building superior products. Many of the 'soldering iron' complaints are coming from the technologically astute and while that demo is a large demo for Apple, it is not everyone. Does everyone (and the typical consumer) want to increase their memory?

      Perhaps there is something to Apple not building their products with everyone's input that is a critical driver for their success to putting superior products in the marketplace. And it certainly is having a positive swing that shows in their revenues.

      I cannot remember a more recent example of a company that (at least anecdotally) has households with multiple devices and making repeat purchases that the way Apple prices and distributes its products. The upgrade path that they set consumers on (while many don't like it) is really impressive.

      • I think you hold a point here, sometimes it is better to not listen to every little wish of the customers and set a clear long-term strategy.
        Look at the PC world with all the compatibility problems, the lack of backwards compatibility, the hours passed configuring, installing, de-installing drivers, etc.
        You don't buy a Ferrari to complain afterwards that the trunk is too small, you buy it for what it is. Tuning is for differentiating cheap mass-products and people who consider a computer as a hobby. Nothing against that, but when I power-up my computer, I want to use it for a purpose and not because I enjoy tweaking system parameters.
        That's the reason I changed to a Mac.
        Thank you Steve for not listening to every nerd out there. I hope you or your successors will stick to that policy and continue to deliver great products.

  9. Some of my friends who buy iPods and iPhones don't even know who Steve Jobs is.

    That is why Apple will continue to succeed for many moons to come.

  10. << Devotion to Apple products is so intense that the company has had to do virtually no traditional marketing — or at least very little >>

    I guessed you missed the hundreds of millions of dollars in iPod advertising, or the award-winning “I'm a Mac; I'm a PC” ads that are so dominant that Microsoft's entire 2009 campaign is based on it. If it was just Steve preaching to the fanboys, Apple's sales and market share wouldn't have doubled (or whatever multiple it actually is) since Steve's return a decade ago.

    For the most part, their products generally work out of the box the way they're supposed so and in a way that feels comfortable to use. Compare that to the competition, and THAT'S why Apple's been so successful.

    • Thanks, Mike — that's why I said “traditional” marketing. I agree that having good products that people want to use is the best kind of marketing possible.

      • and this: at p = 90.75 after 1/21 earnings: p/rev is 2.5, p/book is 4.0, non-gaap e/share is 5.82, p/e is 15.6 vs 25-30 normal, cagr of earnings is 48.6 %, cagr of revenue is 25.0%, pegratio is .32, no layoffs vs ibm, dell, msft, hp,

  11. The one thing that has never changed over the years has been Apple's cult status. It was there in 1984 when I worked at the most highly automated factory in the US in Fremont and it exists today. It's the one constant at the company …………..it's what gave them their start and what's kept them in the game during their down period. A lesser devoted to company would have folded up the tents years ago. I'm not so sure everyone at Apple is interested in “expanding its market reach” either. Sort of the feeling one gets when the band that nobody but you thinks is cool and then all of a sudden it becomes U2. Apple is quite big enough as it is in my opinion and the larger they try to jump the greater the fall might be. They need to be careful at this point in time.

  12. I totally agree with this article. Apple needs to compromise just a little on price and add some variety to Mac models so that they can capture some of the more price-sensitive parts of the market. They need to gain as much market share as they can while Microsoft is down. Steve has not been willing to make those compromises. It's true that it's hard to argue with the fact that they have been gaining market share but I think they could have gained more while Vista was such a flop.

  13. I think your article makes sense. I'm sure you will get flamed but you make sense. Apple has great products but must move on and become a grown up company and not a bunch of hyper groupies.

    • How would you define “grown up company?” Is Dell a grown-up company? Sony? How about Microsoft? If you think so, my guess is that Apple doesn't want to “grow up” to be like them…

  14. Nothing to be defensive about, Mathew.

    Apple, Jobs' brainchild (conceived with the other Steve, Wozniak), will be 33 in April. If it had been his bodychild, it'd've left home, perhaps started a family. A decoupling of sorts does therefore make sense. Why not “move upstairs” — assume the post of chairman, for instance?

    Toyin, England.

  15. I love Apple. I bought the original MAC in 1984. 400k floppy, 128k ram, no hard disk… how many of you “loyal” Apple fans remember that? I have been an Apple fan since Day 1… even during the dark days of very crappy macs (remember the 6200?).

    I agree that Apple need to grow up… quit being manipulated so much by the “rise and fall” of sentiment attached to Steve Jobs.

    However, part of what makes Apple so fun to be involved with (as a consumer and stockholder) is that it is more “personal” than the typical “BIG” business.

    Apple is my Team! Sorta like The Denver Broncos and John Elway.

    Steve Jobs is the Quarterback! I love rooting for Apple and I want Apple to ultimately squash Microsoft in the Super Bowl.

    If Steve Jobs fades/retires away to the “front office”… give me another Quarterback that can inspire me, excite me, and give me a reason to stay a fanatical follower and “fan” of my Team–Apple!

  16. The Apple Way is the Steve Jobs Way. The company is so thoroughly steeped in the values that Jobs preached and lived that the company can keep going without the man being present.

    One thing I like about him is his toughness in making the unpopular decision. He held fast to the one-button mouse as the standard for a very long time. It forced developers to consider that basic users would only work with the single button and write their software with that in mind. All power users would go out and get multi-button mice, so developers would consign advanced features to the right button.

    Also, he made people wait for months until third-party apps could be loaded on the iPhone. This showed people how great the quality of the iPhone was. When they finally got to add third-party apps, people could see that crashes, etc. are rightly due to the apps and not the phone itself.

    Before I could say that the company would be better off without him or not, I'd have to see some of the ideas he rejected and projects he killed to see whether he was wise or foolish.

  17. Mathew, Sometimes heresy-Good! Great ideas=great products. Apple, keep your biz model in place. If you build it…my daughter helped me find Slumdog Mill weeks ago!

  18. This headline is designed to bait readers….and it worked.

    The undenyable truth is that Apple will eventually have to continue without the guidance of Steve, and there will be a period of uncertainty afterwards, but there is no need for the stock to take a huge hit, as market growth continues to set records.

  19. Even though it's tough for a lot of fans to hear, you hit the nail on the head here Mat. Steve has started to believe his own hype which is how the world has ended up with complete flops like AppleTV and Time Capsule. Steve needs to take a long needed rest and go do some other things in his life. That could hopefully help him regain some perspective. This would hopefully spur exec team currently underneath him to find ways to sell the Apple vision of innovation.

    • David B: “As soon as you grow up, you start to die.”

      Awesome. (I'd para-phrase that to: “As soon as you start to grow up, you start to die”)

      That was the best quote I've read in a long time. I can't find it anywhere else on Google either. I thought maybe it was a line from somewhere.

      I can't agree more.

      I hope Apple stays foolish and stays hungry.

      Long live the Cult of the Mac. =P

  20. It hurts but you are right from the investor point of view. Yet If I invest in Apple and if I buy Apple products it is because there is a part of irrational in them, call it dream or call it revolution whatever it is Steve is part of it.

  21. I think I disagree with your premise because the idea that SJ is soooo important as the public persona is inside baseball. Many if not most of the kids with ipods don't even know who Steve Jobs is. They know what an iPhone is (and they've been rediscovering the mac). The products and the marketing are the image. Not SJ.

    It is hard to imagine who could have had the vision, and decisiveness to turn the company around. But SJ has been there a long time, the values are ingrained, and they'll continue. Moreover SJ's uncompromising attitude is a mixed blessing–he's not always right you know.

    On net, there will be pluses and minuses. On balance I think losing SJ will be a negative for Apple, but not a huge one. The company he rebuilt remains.

    Mainly, I just want the guy to be well because he's a human being and the planet is a more interesting place with him around.

  22. I think I disagree with your premise because the idea that SJ is soooo important as the public persona is inside baseball. Many if not most of the kids with ipods don't even know who Steve Jobs is. They know what an iPhone is (and they've been rediscovering the mac). The products and the marketing are the image. Not SJ.

    It is hard to imagine who could have had the vision, and decisiveness to turn the company around. But SJ has been there a long time, the values are ingrained, and they'll continue. Moreover SJ's uncompromising attitude is a mixed blessing–he's not always right you know.

    On net, there will be pluses and minuses. On balance I think losing SJ will be a negative for Apple, but not a huge one. The company he rebuilt remains.

    Mainly, I just want the guy to be well because he's a human being and the planet is a more interesting place with him around.

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