[LINK] Jobs not all bad

David Boxall david.boxall at hunterlink.net.au
Mon Oct 10 09:59:25 AEDT 2011

On 9/10/2011 1:12 PM, Kim Holburn wrote:
> ...  It seems there are a lot of Apple/Jobs hatebois out there. ...
And not a few fanbois.

Is anybody all bad? For that matter, is anybody all good?

For another perspective:
Monopoly, mark-ups sour story of Apple's core
October 10, 2011


For the past four days, the world has seen an outpouring of adoring 
appreciation for a ruthless, caustic, controlling, uncompromising, 
monopoly-seeking, mercantile genius, Steve Jobs.

Yes, Jobs was an unpretentious billionaire, a devoted family man, a 
Buddhist with a generous streak and a spectacular creative force - but 
there is a superabundance of anecdotal evidence that he was very 
difficult to deal with, with a fierce temper, a callous impatience and 
an uncompromising nature. The world is not changed by sweet people. It 
is changed by tough people.

Over the years Jobs sacked many people, humiliated many, fought with 
many and extracted rich premiums from consumers and business partners. 
Australians were a soft target. (Apple has never explained why, for 
example, Australians who buy songs via iTunes can pay more than twice as 
much as Americans for the same content.)
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What should not be lost in translation about the world's largest company 
by market value and profitability is that the founder and leader of 
Apple Inc was a designer above all else. A masterful designer. He 
conceived and demanded beautiful things, not just beautiful to look at 
but beautiful to use.

The genius of Jobs and Apple Inc was thus not based on technology but on 
process. Apple is currently the most successful company in the world 
because of its intellectual capital, its brand value and its ability to 
create closed systems which charge consumers high premiums.

Earlier this year, an engrossing piece by Malcolm Gladwell appeared in 
The New Yorker, describing a visit by Jobs to the Xerox research centre 
in 1979, when Apple Computers was just two years old and Xerox, a giant, 
was thinking of buying into Apple. Xerox let Jobs go on a tour.

As usual, Jobs got much the better of the deal. The visit revealed a 
personal computer, the Alto, which had a ''mouse'', a feature then 
unknown to all but a few, which opened and closed ''windows'' on the 
computer screen, another innovation.

Gladwell writes: ''[Jobs] raced back to Apple and demanded that the team 
… change course. He wanted menus on the screen. He wanted windows. He 
wanted a mouse. The result was the Macintosh, perhaps the most famous 
product in the history of Silicon Valley. 'If Xerox had known what it 
had and had taken advantage of its real opportunities,' Jobs said, years 
later, 'it could have been as big as IBM plus Microsoft plus Xerox 
combined - and the largest high-technology company in the world'."

Instead, it was Apple that became almost as big as IBM, Microsoft and 
Xerox combined and the largest high-tech company in the world. In US 
dollars, the market value of IBM is $217 billion, Microsoft $220 billion 
and Xerox $10 billion. Combined, these three names have a market 
capitalisation of $447 billion, 30 per cent higher than Apple Inc's $343 

Note the difference between Xerox and Apple since Jobs visited the Xerox 
innovation centre 32 years ago - $10 billion versus $343 billion. Xerox 
had little commercial success with its Altos and got out of personal 
computers. Jobs used that visit to create the Macintosh.

What is extraordinary about his career - and prompted the mass outbreak 
of hagiography about him - is that he drove eight separate brilliant 
commercial innovations into the mainstream: the Apple PC, the Macintosh 
(thank you Xerox), NeXT, Pixar (a $10 million investment now worth $8 
billion in Disney shares), the iPhone, iTunes, iPod and iPad.

Most intellectual entrepreneurs are lucky if one great idea can be 
turned into a commercial success. Jobs' shares in Apple and Disney are 
worth $10 billion.

It's not all light. Apple Inc's massive market value is based on massive 
profits and massive profits are always driven by very high mark-ups or 
monopoly pricing or, in the case of Apple, both. Right from the start, 
Apple's technology reflected its founder's controlling personality. Once 
Apple became a big company its computers were based on a closed 
architecture. Most of the components and its operating system were 
proprietary. Creating a software product to run on Apple computers thus 
required buying an Apple software development kit.

In dealing with business partners, Apple extracts a hefty share of 
income and only allows applications for its iPhone and iPad to be 
written on a few approved programming languages. It also must approve 
every application written for the iPhone or iPad and they are only 
available via iTunes.

Apple is also very litigious, especially on patents, which is why its 
great rival, Google, which has developed an operating system which is as 
open as Apple is closed, has just spent $12 billion acquiring the 
phone-maker Motorola, primarily to acquire patents for protection 
against Apple. Any company that wants to use ''i'' in the name of a 
product can expect to hear from Apple's lawyers.

Apple's environmental record is no worse than most manufacturers but 
nothing to be proud of. It moved its manufacturing out of California to 
China years ago.

There's another subplot to the Jobs saga. He is the son of a Syrian 
Muslim immigrant to the US, Abdulfattah Jandali, but was adopted out at 
infancy. He never sought nor encouraged contact with his natural father. 
What if Jobs had been raised in Syria? None of his mercantile genius 
would have been revealed to the larger world because the Muslim Arab 
world, despite all its latent intellectual talent and oil wealth, is a 
desert for the creation of patents, advanced technology and innovation.

Thankfully, Jobs was not raised under the deadening hand of a closed 
social and religious system but near the most intellectually fertile 
valley in the world, Silicon Valley.

David Boxall                    |  Dogs look up to us
                                 |  And cats look down on us
http://david.boxall.id.au       |  But pigs treat us as equals
                                                    --Winston Churchill

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