King Ludd # 7 : With Jobs Gone How is Apple Cooking?

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Most people seem to fit in one of two camps regarding Steve Jobs. Either he was a spectacular asshole that abused his staff while taking credit for their creations or he was a visionary genius. Thanks to his early death, and the following Isaacson biography it became ever more cloudy which it was, but with the opening of the case into salary fixing in Silicon Valley it’s very clear he was both, to a truly extreme degree.

Since lately the asshole point of view has become so dominant, and not without reason, I feel the need to reiterate the case that he was genuinely brilliant as a visionary. Luckily for my purposes he did this Q&A session at Apple’s developer conference just after returning to Apple with the NeXT acquisition in 1997:

Isn’t his answer to that question quite familiar? It’s Google’s current strategy getting on for two decades later. Roll out gigabit fiber to houses to speed access to servers, reduce the amount of state in the end clients like in Chrome OS, and add value by removing the need for users to maintain their own physical machines day to day. Many of us have since started using Dropbox or Gmail as ad hoc backup solutions, but his comments here predate those by about a decade. At the time most people, if they were online, relied on a 28.8kbps modem that hogged a phone line while taking hours to download files that today our smartphones can access in seconds, making this notion seem mildly ridiculous. Seeing the true sellable value out of the hype and mess that existed at the time is a seriously underrated talent.

That case he was an asshole? Well, denying paternity of a daughter, screwing Woz out of money relating to a successful redesign of the Atari Breakout arcade machine, and (allegedly) acting as lynchpin in a Silicon Valley cartel to keep salaries down. While the first two are bad on an inter-personal level, the last one is so bad I can’t help thinking Apple would find themselves in the middle of a very distracting legal minefield were he still the CEO.

In case you aren’t aware of what this is all about, there is a lawsuit pending in Silicon Valley claiming (with good evidence) that “no recruit agreements” (aka anti-poaching) existed between a group of notable tech companies, including Apple, Google, Intel, Pixar and Lucasfilm. Steve Jobs seems to be the central player in the allegations, and possibly the initiator of the entire scheme. Executives at other firms, such as ex-CEO of Google Eric Schmidt, and ex-CEO of Intel Paul Otellini seem to have gone along with Jobs, though notably then Palm CEO Ed Colligan refused in an email exchange during which he calls out Jobs’ proposal as very likely to be illegal. The effect of such an agreement is that the market for engineers is slowed, and salaries suppressed. It is suspected that at some point in about 2009 Facebook started hiring in volume, possibly unaware of the arrangement, and this caused the whole house of cards to collapse. Notably Google gave all employees at least a 10% pay rise in January 2011, in a move assumed to prevent further movement towards Facebook.

Going back to Apple, the replacement for Jobs, Tim Cook, may not have set the world on fire, but neither have things fallen apart. Yes, the new iPhones were not revolutions, iOS 7 wasn’t universally loved, and the iPad may no longer be the shiny toy everyone wants to be seen carrying around, but it is incredibly difficult to imagine what they could actually do beyond iterate further on their existing products. The new Mac Pro shows a renewed interest in the Mac platform which I think all serious Apple users welcome enormously, even if they are only laptop users, as some rebalancing was necessary given the focus for recent years on iOS.

While this has happened Apple’s competitors have languished further. Windows 8 has been an unmitigated disaster for Microsoft, and it will be very interesting to see how the new CEO chooses priorities moving forward for them. Android, while dominant in pure units shifted, has claimed the mass market but has an ecosystem where the average spend per user is much lower than on iOS. From a developer perspective Apple have not only superior software libraries to those on Android, but the business requirements to launch products around the world are enormously simpler when partnering with Apple. A large part of this is Google’s ongoing China problem (see my previous “Android is Dead“), but this is by no means the whole story.

Finally, Mr Snowden’s bombshells, previously the land of conspiracy theory, make the business models of Microsoft and particularly Google look increasingly hard to sell outside of the US. Apple are not perfect here, and it remains unclear just how much information iPhones or Macs keep reporting back to them throughout their lives, but it’s unquestionably a better proposition than Google’s Chrome OS or Microsoft Office 365 (the cloud based office) from a privacy perspective.

Google and MS have identified the same point of attack on Apple, which is that they should enable a “multi-screen” future, meaning that all the devices you carry should present a consistent view of applications. For example, when you check email on your phone it shows you’ve read it on your PC, which is nothing like as trivial to make happen as it looks. Google have the weakness of assuming all the co-ordination information must go through their infrastructure, with things such as Chromecast and Google Glass utterly useless without internet connections to connect to their servers in other jurisdictions, a viewpoint that the EU is going to take increasing issue with. Microsoft (or more correctly recently resigned Microsoft, aka Ballmer) simply think that making all these devices run Windows will solve the problem, which is idiotic because it doesn’t help the synchronisation at all, and furthermore they’ve never really had a monopoly on anything except desktops. In the process of attempting to get an in on mobile their design fascists created the almost universally loathed interface formerly known as Metro and imposed it on desktop users in one of the most predictable product flops in years. Microsoft’s real hope, therefore, lies in selling tools and systems to enable the easy creation of the infrastructure of these applications, and not in the systems that merely show the outputs to the user, which is not going to be easy in a world where Linux is free.

If Apple can keep on their current path but somehow enable Steve Jobs’ vision of a backed up computing nirvana for all without the central company that manages everything for everyone then it’s hard to see how Google or Microsoft could respond. Microsoft might just manage it if they reorient the company around Exchange, their email and calendar server for large companies, and make that the priority instead of Windows, but it seems likely that many Exchange users will be carrying iOS devices, as they already do. Apple have shown a general ineptitude for running services, but they could turn that into an advantage if they make it insanely easy for others to run services for their devices, sidestepping much of the privacy problem in the process.

So while it’s right to lament the passing of a visionary I think at this point Jobs’ absence from Apple has proven to be a blessing, much as if Gates and Ballmer really do allow the new MS CEO to do his job it will prove to be best for the company there. Tim Cook has shown the ability to resolve messes that arose early in his tenure, such as the Apple Maps fiasco, and is now with the higher end products shoring up those areas that had been lacking in attention for some time. He’s been lucky that his competitors have slipped up as much as they have, but as the Windows market share appears to be dipping below 90% for the first time in a long time, and there is no serious threat on the horizon, it’s got to be a very good time to be the Apple CEO.

Nigel Birkenshaw runs atomirex.