Apple: So Good They Make Their Own Rules
March 23, 2008
Being an avid Mac user articles and other forms of media that pertain to Apple ALWAYS spark my interest.
The past week two articles got my attention. How Apple Got Everything Right By Doing Everything Wrong , and Breaking The Rules: Apple Succeeds By Defying 5 Core Valley Principles, both by Leander Kahney.
Apple has been doing everything right by doing everything wrong. Period. They definitely don’t act like any other large corporation. Where as every other large corporation has produced products to suit many different companies and applications, Apple in all its wisdom, saw the opportunity to grab an extremely large target market by becoming self sufficient. By producing products that work amazingly well (and rightly so) with their other products Apple has been able to increase their revenue with products like the iPhone, iPod etc… without the need to outsource much of their products.
Leander Kahney was able to come up with Apple’s unofficial principles that make Apple who they are:
1. COOPERATEValley RuleEmbrace open platforms. Software should be decoupled from hardware so users can access any program or data from any device. Example: Google’s Android, an operating system that will run on a variety of handsets from different manufacturers.Apple RuleDesign software to work on your own hardware — and not on anyone else’s. The OS X experience is made only for the Mac; iPhone apps function only on iPhones. And customers don’t seem to mind. Apparently, they’re willing to trade freedom for a kick-ass product.2. COMMUNICATEValley RuleTell your fans what you’re up to so they feel a connection to your company. Hiring difficulties? New strategies? Digestive problems? Blog ’em! Customers will feel more invested and more loyal. Plus, their comments could give you some good ideas.Apple RuleNever talk to the press. Shut down rumor blogs. Threaten to sue children who send you their ideas. Never leak product news until you’re ready to announce it. Then use that discipline to create buzz and win coverage with every announcement.3. PLAY NICEValley RuleDon’t exploit your market-leader status. Software should compete on its merits, not its ability to shut out rivals. Microsoft earned an antitrust suit and decades of ill will by muscling PC makers into bundling its operating system and browser onto their machines.Apple RuleHardball tactics rule! Every Mac is preloaded with iTunes, which becomes the user’s default music program. And most iTunes purchases can be played only on iPods, creating a closed loop that has proven tough for competitors — and music labels — to challenge.4. LOVE YOUR CUSTOMERSValley RuleMake sure to lavish affection on your clients, and try to ensure that every one of them has a positive experience. Anyone can post a withering review on Yelp or Amazon, so you can’t afford to let a single complaint go unaddressed.Apple RulePlease yourself, not your fans. Release iMacs without floppy drives. Release MacBook Airs without optical drives. Cut the price of an iPhone by $200 two months after its introduction; when early adopters complain, offer them a $100 gift certificate.5. CODDLE YOUR EMPLOYEESValley RuleSince the best ideas bubble up from within the ranks, encourage autonomy by allowing workers free time to focus on their personal projects. Also, shower them with perks like free food and massages to make them feel special.Apple RuleMotivate through fear. Don’t be afraid to scream. Threaten to fire them. Withhold praise until it’s truly deserved. Go ahead and bring them to tears. As long as you can inspire them with your sense of mission, they’ll consider this the best job they’ve ever had.
Some of these rules/principles may seem harsh and may be over exaggerated.
Apple’s customer service is second to none. They treat people like people. Casual and easy to talk to, it makes you want to call customer service just to have a chat.
Its not news to anyone that Apple (or Steve Jobs) is extremely secretive. But this works to their advantage. By not talking to the press or leaking any information about upcoming advancements in technology or products, Apple is able to control a lot of information about them. By only announcing new technologies about a product days before its release, they are able to create incredible amounts of hype, and really know how to get everyone talking.
Apple’s corporate model is definitely one of a kind, but incredibly risky. Maintaining this model will make Apple a powerhouse, however if another company tried to adopt it, it would lead to imminent failure.
Getting it Right by Doing it Wrong
March 22, 2008
There has been a lot of coverage regarding successful companies like Google and Apple who have climbed the ladder of success using business models contrary to the traditionally proven models. Now that these companies are becoming more successful, other companies are beginning to emulate them, or are in the process of investigating how to become like them. A main component of this recent recognition stage is the documentation of these companies. Wired published an article on how Apple made it’s way to the top by breaking every rule. Siva Vaidhyanathan , media scholar at the Univeristy of Virginia, is in the process of writing a book called The Googlization of Everything. Also, Jeff Jarvis has recently been contracted to write a book about Google’s business strategy relating it to other businesses and industries, aptly named: WWGD – What Would Google Do? It is expected to be published next spring.
Wired’s “how-to” Wiki
March 21, 2008
While searching the Wired site for the article we were assigned last week, I came across apart of the site set up in a wiki format called “Wiki How-to Wiki”. It offers techie how-to’s on all kinds of topics. Here’s a couple:
Save YouTube Videos on Your Hard Drive
Watch Higher Quality YouTube Videos
Make a Local Backup of Your Hotmail Account
I just thought this site was really interesting to scroll through. If it continues to grow I imagine every hack available will be archived here. Enjoy!
The Freaky Land of Free
March 17, 2008
Chris Anderson’s popular Wired article, Free! Why $0.00 is the Future of Business, covered the various characteristics of free in relation to our ever-growing technology savvy society. One of the areas discussed stated that the question surrounding infinite storage was not if it would happen but when it would happen. And the answer is that it is already here, it’s just not all online services choose to embrace it. However the ones which have choose to embrace infinite storage, like Yahoo, are profiting from cooperation and collaboration with what their consumers want and will find a way to get. Other increasingly prevalent obstacles to the digital environment today, like free music, bandwidth, and processing power, are being considered by dominant firms like Google and in-turn are profiting the most from the predicament. It may appear to be free to the user, but someone else is picking up the tab; whether it is the company offering the “free” product, or the rule of 1% which claims that 1% of users support the remaining 99% through advertisements. Companies are no longer specializing in selling products, but selling advertisements or cheaper products which entice the consumer to purchase something else located in their store.
Reading Chris Anderson’s article from wired.com, shed a lot of insight onto how different businesses are developing a 0$ business plan, by offering many services and products for practically nothing. This has a lot to say regarding how different companies and markets are evolving to capture consumers minds everywhere.
After reading the article, there was one thing that stood out in my mind. From my marketing class that I took last semester we talked about pricing strategies. Not saying that companies GLOBALLY have adopted an experience pricing strategy (Where the longer you make a product you find cheaper/efficient ways of producing that product, thus forwarding the savings onto the consumer), although I believe this plays a role in why things are being able to be sold cheaper almost to the point of being free. Competitiveness. Companies are becoming more and more competitive to grab consumers from other companies, and because several aspects of their company (in storage, and other products that can be produced in mass quantity) have become cheaper to create, maintain, and obtain.
Webmail has been around since you first got your computer. Only once you signed up you were given a limited amount of memory in which to store your emails. Of course you were always given the opportunity to PURCHASE extra space at a monthy/or annual fee. This was how the companies gained a profit. However, with the ability to create more storage for less money, companies are now offering UNLIMITED storage for emails for free. How will they survive if they no longer charge for extra storage you ask? Take Yahoo! For example. If you have an email account with yahoo, you are more likely to use their other offerings such as search, IM, etc…. With more people drawn to their free unlimited storage, this would also increase the usage of their search engine etc… where other companies would be drawn to this customer base to advertise.
Cell phones are becoming more and more popular. Everyone goes through the hassle of researching monthly plans, phones that come with a plan etc… There are two things to discuss here. The cost of cell phone plans have stayed relatively the same over years, with phone companies gaining a lot of their income from users that go over their monthly limit on minutes, text messages etc… What has changed though is the number of calls you can make monthly. Each phone call you make has relatively no cost to the phone companies, therefore to stay competitive, they continue to increase the amount of minutes and/or text messages. For my first cell phone I was charged 25$ a month for 80 minutes. That’s right 80 minutes. That seems ridiculous if they offered a plan like that now. For the same price one can get a plan that has at least 100+ minutes. Again cell phone companies like to stay competitive.
With the ability to stay within your limit of phone calls and/or text messages how to cell phone companies gain income? If you’re unable to get a “free” phone with your plan, you’re looking at 80$ plus to have a decent phone, and if you don’t have a plan, you are looking at over 200$ for the phone of your choice.
Fred Wilson created a great term “Freemium”. This ties in with webmail, but applies largely to free applications. Many free applications are funded by advertisements, or restrictions on what you are able to do unless you purchase the “Pro” version. With this, companies that offer these such applications are able to make profits from other companies advertisements, especially if the application is powered by other users (ie Limewire, Kazaa etc..), and also make a profit from selling the “non-advertised” version.
The cost of music CDs has declined over time (I remember paying 20$ for a CD, when you can get CDs now for 12$ or even less). This could be attributed to many factors: rising demand of CDs over cassettes, the lower cost of producing a CD, or competition from downloads. The music industry is finally understanding that lowering the cost for music (for downloads mostly), is a great way to effectively reach many more people, and thus increasing the amount of sales for any given song.
In the future I KNOW we will see many more services, and products be offered for basically free of charge, even those services or products that we may have not been introduced to yet.
UPEI - BUS442.0 
