An interview with Niaz Uddin at eTalks

My thanks to Niaz Uddin for asking some good questions and posting my replies:

Horace Dediu on Asymco, Apple and Future of Computing | eTalks.

Full interview is here, excerpts below:

Niaz: Why do you study Apple?

Horace: Apple is an interesting company to study because its success comes from being a serial disruptor. This is a very rare type of success formula. I am trying to “reverse engineer” its operating model and I hope that such a model is one which others might learn from if they were to emulate it. The trouble is that very few others seem to want to emulate Apple. Why that is is also an interesting question.

Niaz: […] Do you think apple has lost its image that it has created over the years as a center of innovation and building excellent products?

Horace: I cannot comment on how Apple’s image is measured by people in the industry. I have been listening to commentary on Apple for about a decade and I have never seen any change in pattern. The company has always been perceived as a failure by a majority of observers. With respect to its products, I also do not see a change in the pattern established over the last decade.

Niaz: Are you optimist about the future success of Apple? Like after 10 years and then 20 years?

Horace: Let me put it this way: if there were no Apple then somebody will have to invent an Apple to do the same thing Apple does. In that sense I’m optimistic that there will be an Apple in some way in perpetuity.

Niaz: What will be the next big innovation from Apple?

Horace: I have no idea but it’s likely to involve refining new user interaction methods. Similar to the breakthroughs that came from the use of a mouse, a scroll wheel and a touch screen. It means making computers better at gleaning our intentions without our getting involved in explaining them.

Niaz: Will Apple, Google and Samsung be the major player for the future of computing? Or we can hope to see some new faces?

Horace: I am fairly sure Samsung will not be because they have not yet grafted software and services to their operating structure. I would give Amazon a higher probability in being a successful platform alternative.

Niaz: In 2011 you’ve written a blog post ‘Steve Jobs’ Ultimate Lesson for Companies’ on Harvard Business Review Blog and you have cited ‘A leader should aspire to do more. A leader should claim to have left a legacy not just on their company but on all companies.’ As you know Google, Amazon, Samsung, Facebook … all have learnt lifetime lessons from Steve Jobs. What do you think about the impact that Steve Jobs have created?

Horace: He led by example and like all great leaders sacrificed much as a way to inspire others to follow him. He also spent time in the wilderness and chose asceticism. This gave him authority. Many historical figures had the same quality. The problem is that few business leaders have it but I don’t see why they shouldn’t.

Much more on evaluating Tim Cook’s performance, the iPhone portfolio, the rise of Android, Microsoft/Nokia, wearable technology and disrupting Google. Check it out on eTalks.


  • santoscork

    Reverse engineering the success? Look at this superb article, There are some great quotes that can provide some invaluable insight. In my view Apple either creates an entirely new category if it’s obvious or adds a feature only after a lot of hard work. Features are easy to implement but being able to see into the future of a feature is an Apple hallmark. Take iBeam versus the practically defunct NFC, granted it took Bluetooth 4.0. Patience delivers great wine.

  • On “reverse engineering” Apple’s operational model: Apple, as an organization, is probably best described by what is called a complex adaptive system. The methodological problem with complex adaptive systems is that they do not lend themselves to easy modelling.

    One issue, among others, is the butterfly effect, i.e. small differences in initial conditions could lead to large differences in results. A company trying to imitate Apple will start from different initial conditions and it is impossible to know apriori if those differences have large consequences or not. It could be anything from the shape of the office building or food at the staff canteen (not very likely, mentioned just to illustrate the point), to location, presence of a certain personality (anybody: Jobs, Cook, Ive, Forstall, someone less known), history of the company or the ever elusive culture factor. One small ingredient that nobody might be aware of could lead to large differences in the final results.

    Having only one sample available (Apple itself) is also a problem: with one sample it is impossible to derive any correlation relationships, let alone reach to causality. Comparison to other structures (e.g. military) is an workaround, but that is never a apples to apples comparison (no pun intended).

    • berult

      Could you spot a black hole were you not aware of its effects on the space-time vicinity? Could you peruse dark matter without inferential processing from mathematical constructs?

      Steve Jobs…Apple…is a product of its techno-cultural era. Context rhymes with complex; it engenders events to the drumbeat of ‘terra incognita’. Black matter…contexts…cannot be borne out of artificially set conditions. They map themselves out, Steve Jobs-Apple…Sedentary-Computing era, Mozart…the Classical Period, Einstein…Classical Physics, …, from critical mass volition.

      Quantum uncertainty has yet to be reconciled with determinism. And we have yet to alchemize chemistry. May Jobs, Mozart, Einstein, … rest in quantum peace over their continuous legacies.

      • berult

        Erratum: ‘dark’ instead of ‘black’ in second paragraph.

    • alj_disc

      In fact you have 2 samples and perhaps even 3 :

      – Pixar is the other success of Jobs legacy and perhaps even a bigger one. And like Apple they succeeded because they put all their focus on the products and the internal dynamic, not what the shareholders wanted. Both companies have an atypical structure ( at one point there was 3 hierarchic levels at Pixar when there was about a dozen in the equivalent 3D CGI disneys studios). Both companies rely on excellency at all levels and never did what everybody else was doing.

      And even if it was ultimately a failure, NeXt history can give quite a few hinsights too.

      • NeXT history actually proves that focusing on excellent products is not enough for being successful. To have a shot at detecting any correlation between focus on product excellence and success we’d have too look at 4 sets of data:

        – Are there any successful companies which focus on product. The answer is yes, Apple and Pixar, Porsche are some examples.
        – Are there any companies which focused on product and are not successful. Yes: NeXT, Washington Post, Rolls Royce.
        – Are there any companies which do not focus on excellent products and have been successful? Yes: Microsoft, Lenovo, Wall Mart.
        – Are there any companies which do not focus on excellent products and have not been successful. Yes: well, plenty of them.

        With this kind of data it is impossible too identify any correlation, let alone causation, between focus on excellent products and company success.

      • alj_disc

        > With this kind of data it is impossible too identify any correlation,
        let alone causation, between focus on excellent products and company

        No, but the question was to identify what made Apple so apart from others. And btw, your counter examples are a bit weak, it could be argued that both wp and Rolls-Royce failed when their focus wavered inducing quality loss.

        Steve Jobs created and/or shaped 3 companies and the common points I listed are those that strike me as really signifiant. There is surely others.

        And it is obvious there is others methods for a company to be successfull but that is another discussion.

      • Jessica Darko

        I think you’re defining “successful” to fit your desired argument.

        In terms of profit, NeXT was successful (so was the Newton). They were profitable and growing at the time of aquisition/shutdown. It’s true both struggled for years, as did Pixar and Apple.

      • marcoselmalo

        A lot of people aren’t aware that NeXT acquired Apple for negative $400 million. It was such a stealthy takeover that most people still don’t understand what happened.

  • “asceticism”

    Thanks. One of my favorite aspects of reading your posts, Horace, is I almost always learn a new word.

    Do you have “Word of the day Toilet Paper?” 🙂

    • obarthelemy

      I’m still waiting to see “discombobulated” outside of Calvin and Hobbes, and I’d love for English speakers to pick up our “tintinnabuler” and get that word to actually ring some bells.

  • handleym

    ” I have been listening to commentary on Apple for about a decade and I have never seen any change in pattern.”

    I suspect this reflects a personality trait. I’ve noticed, when discussing HW, SW, OSs, even UI, with people knowledgeable about these issues, is that there is a pronounced split in the extent to which people value backward compatibility.

    Apple (and to a lesser extent ARM) exemplify a lack of patience with backward compatibility. They understand why it’s necessary but they ALSO understand the incredibly high costs it imposes, and so are willing (eager!) to ditch it as soon as feasible.

    MS (and Intel) exemplify a very different, majority, opinion, which holds that the pain of incompatibility is so extreme that anything is necessary to hold onto the past.

    As a value judgement, there isn’t much to be said between the two of these — they’re opinions.

    As economic judgements (either “customers will reward us for maintaining compatibility” or “society is better off, all things considered, with backward compatibility”) I think it’s too early to tell, but my guess is that both statements are false. For MS/Intel it’s hard to disentangle bwd compatibility from all the other reasons that led to their success, but I think we can say (with substantial evidence) that customers that build their IT model on assuming bwd compatibility (rather than budgeting for occasional code updates) eventually find themselves in a world of pain. They are, for example, in the position of IBM customers who have to pay a fortune for more-or-less standard compute services to run their 1960s codebase, or customers forced to stick with XP and IE6 to run their 1990s codebase.

    As an empirical judgement, I would argue that a substantial reason that Apple has been able to punch above its weight is that they’re much less hindered by the dead-hand of the past, most recently in being able to create — at almost the drop of a hat — a CPU with an IPC apparently the equal of Haswell, the product of seven years work by the largest, most experienced design team on earth.

    So, back to the point at hand. It seems to be a human universal that there is a substantial majority that cannot see the win in any possible change, only the pain. (Think, as a variant of this, of US reluctance to drop the penny, or to switch to SI.)

    This sort of mindset is never going to accept how Apple works. The best they can do is, AFTER each fait accompli, rationalize it as sui generis, never to be repeated. (You can see an example of this playing out right now if you read the comments on various technical blogs about the A7, where a majority opinion has swept through a gamut of possibilities, unable to believe that Apple so easily created a serious CPU — and basically a repeat of what we saw a year ago when they likewise could not believe that the A6 was an Apple design, with the performance it sported.

    We see the claims that it’s all lies, that reviewers have been bribed by Apple, that the various benchmarks used don’t tell the whole story, that Apple are using some sort of turbo technology that runs benchmarks at high speed but nothing else, that the power draw must be excessive, that this is just Apple using a standard ARM design which everyone will have in a few months, and ever more baroque nonsense.

    I see this all as a massive unwillingness to accept what Apple is showing — the payoff if you are allowed to ditch backward compatibility. Apple has got to enjoy this already, with ARM being way simpler than x86, and with Apple able to ditch whatever parts of ARM they don’t need (like hypervisor or LPAE). They get to enjoy it even further when they can ditch the 32-bit ARM support.)

    • obarthelemy

      I think 2 other concepts are embroiled in the issue:
      – single-source. It takes a lot for Entreprise to hand over their wallets and lonck-in to a single vendor. Wintel was about Entreprise, Apple is about Consumer.
      – interoperability: ditto. Committing to buying all Macs/iPods/iPads/iPhones is a hugely expensive and risky proposition. Some Consumers take that step, very few companies ever will.

      I think the Wintel approach was and still is right for Entreprise. They just couldn’t/wouldn’t adapt it to Consumer. The surprise is that Consumer has become so important.

      • Kizedek

        “Single-vendor” lock-in is the biggest crock. MS was the single vendor of OS. Now companies have reaped the mistake of listening to lazy IT departments — they must stick with a 10 yr old OS or face some pain anyway they that were supposed to be avoiding by sticking with the single platform.

        Windows has to give some pain at some point — either through the need to support the cruft or by being left behind.

        The answer was always to use the best product where it made sense — linux on servers, Macs for creatives, etc. It was MS that created the lock-in by artificially restricting compatability to its own platform when the others played well with standards and performed better whenever they were allowed any entry.

        No-one says a company has to buy all iPads or iPhones. They have to try them on salespeople or whomever, and judge for themselves the improvements. The risky proposition is to wait for MS to come up with viable mobile products.

        You may be right that your two issues are the thinking of many IT departments. But it is being proved wrong by the day. I hope you aren’t seriously presenting it as a real issue in this day and age that you believe yourself — but your commitment to the “Wintel approach for Enterprise” (ironically, single-vendor lock-in if there ever was), and making it a consumer-enterprise issue shows how you miss the issues that actually are important — ie companies dying because they can’t adapt to the present and future.

      • obarthelemy

        At least MS was (well… originally…) only doing OS. An OS monopoly is bad, but not as bad as an OS + hardware + client apps +backend & cloud monopoly.

        Entreprise has a longer-term view: current advantages are weighed, but so is strategic risk of lock-in.

        Wintel is only single-source on the Windows side: you can buy your PCs and servers, your front and back end apps, even your CPUs (the “tel” in Wintel) from several suppliers.
        MS only doing OS also minimized risks, as it kept them focused. Many issues with Windows can be traced back to MS diversifying into apps and servers, both losing focus and playing political games.
        An Apple workstation user today us running 3 yo hardware at 3 years ago prices because Apple don’t care. An Apple server user today is… orphaned. Who’s next ?

      • Jessica Darko

        This is an example of ignoring all relevant factors (like people being more productive using a better solution from Apple) to justify a claim that Apple should lose using arbitrary criteria and shifting goalposts.

        Single-source is a rationalization, in fact it’s post-hoc ergo-proptor-hoc fallacy.

        But fanboys take it as an article of truth because it rationalizes their emotional position.

    • obarthelemy

      Also, Apple value backwards compatibility as much as anyone else when they actually have something worth staying compatible with. The long line of Apple 2s and 68k Macs, which both pushed a CPU line, OS and architecture well past its prime at the cost of extreme contorsions and compromises, is proof of that.

      • Kizedek

        Yeah, there is a fine line between extending what might have some value for a little longer, and strapping your clients so you can milk your cashcow a little longer.

        What is hard to do is to look into a future that might not be best served by your cashcow, and make the decision to do something about it instead of milking it for as long as you can.

  • obarthelemy

    Regarding the “biggest competitor” question, I’m not sure owning a platform is that important; I’d argue what counts is *having* not *owning* one. Like for houses, cars… any asset really: renting is OK, and actually smarter in a lot of cases.

    1- An ecosystem is hard and expensive to setup and maintain: OS, devs for apps, wwide content deals, servers/service… People keep telling me that Mapping is an horizontal play… Ecosystems, even more so.
    2- An ecosystem is *required* but not *enough*. What sells is actual features of individual products. If Apple were to release an iPhone with a bad screen, a bad camera, and an ugly casing, their ecosystem wouldn’t matter. I’m guessing we’ll have proof of that shortly.
    3- Google have built a free (beer) and mostly free (speech) ecosystem, that OEMs can use *and tweak* as long as they’re willing to hand over ads and tracks. That’s an incredible deal, especially since nobody can monetize ad&track like Google.

    Samsung are being smart by piggy-backing on that, and focusing not on replicating that, but on embracing and extending (rings a bell ?) via OS, hardware and software features.

    • charly

      It is not only Google that build Android. It is a system that allows multiple, slightly different, interpretations in which the best features win. Take for example the quick access bar Apple stole from Android. Google didn’t invent it, Samsung did.

  • Jessica Darko

    Apparently I’ve been following Apple a lot longer than Horace. Apple has been percieved / propagandized as a failure for years going back to the late 1970s. Yes, when the Apple II was creating the “personal computer” market, and tearing it up, with a majority of market share, we saw the very same claims. That the TRS-80 was better because it was cheaper, that the CoCo was better because it had better color, etc. When the IBM PC came out, we were told that Apple // would never be able to compete. When the PCjr (peanut) came out, we were told that the Apple // was dead (the peanut was a failure)

    No matter the situation, the Apple haters have said the same thing, and used the same kinds of arguments and propaganda and selectively ignored past history.

    When Apple had %30 of the market with the Mac we were told it only had %5 using BS numbers for windows (that double counted machines, and from “Analysts” who didn’t count mac sales becuase macs weren’t sold thru the enterprise channels they measured. ) Every windows install was counted as an additional sale (Even though many of these machines were immediately turned into Linux machines, or many of these sales were upgrades of the OS on the same windows machine– much the same way the double and triple counting of android “activations” is counted as real sales today.)

    The hatred and the tactics have been the same for 35 years! And the reason has been the same as well…. Apple makes innovative products, but a lot of people are poor or cheap and they just want crap they can afford. When they buy it, they don’t want to admit that they bought a second rate product, so they pretend like their product is superior. After all, it’s all they could afford so they become emotionally attached to it.

    This is the basis of fanboyism — people who bought inferior products but don’t want to feel inferior themselves. (There are no mac fanboys, only mac users who don’t understand why they’re constantly being attacked by people who made a different choice. The apple users don’t feel the insecurity that the fanboys do, and so you’ll notice that the vast majority of the time when someone is being accused of being a “fanboy” its because they use Apple, not what they’re doing… this is another projection of the insecurity of the fanboys- they don’t want to admit that they are zealots who have chosen to attack a platform out of their own insecurity, and rather than be honest with themselves, they project their own defects onto others.)

    it really is a fascinating psychology. And ti’s why you can’t have productive discussions with them, because there are no rules of logic or reason to defend their position– their position is one of their own insecurity so they will shift goalposts, make things up (eg: pretend activations are sales) and anything else in their desperate attempt to not feel bad for buying crap.

    “I have been listening to commentary on Apple for about a decade and I have never seen any change in pattern. The company has always been perceived as a failure by a majority of observers.”

    • obarthelemy

      Actually, I come across Mac fanboys regularly. I had one explain to me that Windows 7 was still based on DOS ( because of the BIOS boot screen and the Energy Star logo (sic….???)), that Apple has a deal with Intel where they get a wafer’s central chips because those are so much better ( he didn’t believe me when I told him those chips are also blessed by a priest, an imam and a rabbi, though), kept insisting that Windows was based on an older core than OSX (NT vs BSD… not true, and a silly topic), and refusing to register that even the guy who designed the Dock now says it’s only useful to look good in the store.

      Funny at first, but quickly boring.

      As for your revisionist crusade abiut the whole world but you lying about sales figures… yeah, suuuure.

      • Sacto_Joe

        …and then there’s obarthelemy, who spends an inordinate amount of time on a site that supports a company he loathes.

        If there’s a revisionist in the crowd, obarthelemy, you’re it.

  • “Apple is an interesting company to study because its success comes from being a serial disruptor. I am trying to “reverse engineer” its operating model”

    Here is some perspective from Tim Cook discussing the new phones, paraphrasing…

    — We don’t have tons of people, so we can’t double and triple check things. We trust each other and respect each other, and everybody pushes everybody else, and that sort of combination of the collaboration and friction is the right mix that produces products like this. There are many innovative things in these products, from the fingerprint sensor to the flash to the processing power. IOS is filled with innovation. Seven’s innovation overflows the cup.

    We’ve found a way to make our products such that the experience is jaw-dropping. The quality and precision are just unbelievable, and we can do this for a whole lot of people.

    Our goal is to make the very best products in the world that deeply enrich people’s lives. It’s not to make the most, it’s not to have the highest market cap. That’s the result of doing the first one well. Hopefully you can see that in our products and, more importantly, feel that in the experience you have using them. That’s what we’re about.

    That’s the beauty of this place. We don’t have to put posters on the wall to remind people of that. Everybody knows it. —

    So it appears that Apple does not set out to be a serial disrupter. They don’t even consider it. It just happens as a byproduct of their creations. It seems the secret is to create an environment where very smart people want to share ideas that spark the imagination and provide the means for successful fulfillment. This method could be applied to any endevour in any field..

    • poke

      “Our goal is to make the very best products in the world that deeply enrich people’s lives. It’s not to make the most, it’s not to have the highest market cap. That’s the result of doing the first one well.”

      Cook is here giving the ingredients for solving the Innovator’s Dilemma and becoming a serial disruptor. You have to take “making the very best products” as your goal, rather than maximising business metrics. You have to realise that market cap and market share (and revenue, profit, etc) are, at best, signs of health rather than goals that can be intelligibly pursued for their own sake. What Cook is saying may very well appear to be common sense, but common sense is rare in management.

  • obarthelemy

    Just got around to reading the e-talk…. seriously…

    1- “Android destroyed many businesses”. Sure. It’s not like MS and HTC are still around, Nokia and RIM destroyed themselves, and Android mostly *created* a billion-devices market for Samsung, Sony, LG, and tens of others…

    2- “iOS is high-end, Android is low-end”. Is this about casing materials ? Because there’s not much else high-end about iOS… I’m not going through the litany of iOS’s and iDevices’ missing hardware+software features again… iOS is premium/luxury; not high-end. And Android is on many devices, some/a few of them significantly higher-end than the equivalent iDevice.

    • Kizedek

      Thanks for not going through your litany again — much appreciated.

      OK, let’s put aside low-cost vs “premium/luxury” ends of the market. And let’s look at “high-end” in the sense that you are speaking of it…

      Your problem is that you make the exact same mistake looking at Android as many do when looking at Windows. A techy, nerdy “power-user” is not the same as a high-end user. It’s that simple.

      A high-end user is one that does a highly specialized job and needs certain powerful and innovative tools in order to produce greater results quicker and more easily than ever. Doctors, music producers, video producers, artists, journalists, lawyers, server admins, what have you. The job is high-end, not the techy’s opinion of own his computing abilities.

      Many many people with specific jobs in mind are choosing iOS because the power and apps to do those jobs in ever more interesting and convenient ways is possible with iOS… and it is actually being used to perform complex computing requirements.

      [But, in many ways, “high end” is about quality of the tools, vs. all the features it “could” have according to self-proclaimed experts. What’s better, a Swiss-Army knife with 5 blades that are rust-resistant and don’t snap; or some cheap knock-off with 15 blades, including spoon and fork, which doesn’t fit in the pocket, rusts, and half the blades snap after the first time you use it? Again, you seem to take a view about mobile devices that most people don’t take about any other type of tool that they use in any kind of professional capacity.]

      • santoscork

        Great analogy of Apple iOS, a set of 5 blades that just work rather than what from appearances appears to be more choice without any consideration to quality.

        I will leave everyone a quote:

        Focus is a matter of deciding what things you’re not going to do.

        – John D. Carmack II
        (born August 20, 1970) is an American game programmer, and a co-founder and technical director of id Software.

  • poke

    “He also spent time in the wilderness and chose asceticism.” I love this quote. I think the key to reverse engineering Apple’s culture is to reconcile the fact that Jobs claimed to ask himself every day if he’d be doing what he was doing if he was going to die tomorrow with the fact that he spent that time micromanaging Apple’s products right down to whether the arrangement of the components on the motherboard was aesthetically pleasing. Once you can hold those two things in your mind without conflict, you’ve got it!