The Next 40

In Apple’s first 40 years it shipped 1,591,092,250 computers[1].

This shipment total is higher than any other computer company in its first 40 years. Actually there are no other PC makers that are 40 years old. One computer maker (IBM) is older but they only sold PCs for 24 years and what they still sell they don’t sell in high numbers.

That does not make it the top seller in a given year. Looking at only the Mac, Apple’s traditional form factor personal computer, Apple has only returned to the top 5 last year. Only if including the iPad it was the top computer vendor in 2011 and including iPhone, it was first in 2009.

Screen Shot 2016-03-28 at 11.36.56 AM

After having a 40 year run and after selling more computers than all American and Japanese computer companies put together, how should we think about the next 40 years?

First, clearly Apple shifted from being a “computer company”. It has already changed its name to exclude the word “Computer” but that has been interpreted as saying that it sells devices (which happen to also be computers.) The word “computer” is already archaic. We stopped using computers to compute in the 40s. We used them to make decisions, keep track of things, speed things up and then to communicate and then to entertain.

Devices, it seems, are what customers mainly use to do, well, everything. Computing has grown to encompass most activities we engage in. So is Apple then a device maker?

More broadly, irrespective of the name, is Apple at 40 still defined as a hardware company? Certainly Wall Street[2] still think so. The conversations one hears clearly consider Apple’s future to be tied to the sales volume of specific products. At one time it may have been the Mac, another, the iPod and now the iPhone. This thinking is again a legacy of where the company was but mainly it’s a reflection of how revenues are reported.

We see a line item in the income statement that says “iPhone” and it has a big number next to it so we, of course, fixate on that big shiny number. But if we were to unpack that number and see why it’s so big we would discover that buyers are buying something other than what financial statements report.

Buyers are buying experiences, I hear you say. Yes, but more than that. Much more. They are buying safety, comfort, convenience, simplicity, productivity. They are buying modules to combine with other modules that help to do something. Something better. They are buying hope, satisfaction, escape or vanity. In other words they don’t know what they want but know when they have it. They trust products unseen which have a reputation of delivering that which they think they might like, without knowing what that is. By employing the product, and a whole lot more—effort, time, mental energy and repetitive actions—they learn to exploit a product to achieve satisfaction.

Screen Shot 2016-03-28 at 4.59.14 PM

Products are enablers, as are experiences and software and ecosystems and services. They are modules used in a melee of activity to make the user feel they are making progress. And if that module is better than no module then it will command a price and if it’s better than another module or modules then it will command a premium. And if most people agree then it will be popular with many. And only if all these are true will it create a big number on a report.

And so we must search for other names to call a company that delivers an enabler that may lead to progress. Crude categorization like the reporting of finances leads to self-deception and a loss of opportunity to understand. Firms are often victims of this self-deception because they start believing that customers buy the things they sell. They start to believe that what is on their financial reports is a reflection of the value they create. It’s a simple mistake to make, but a mistake which leads to catastrophe. If its data is mis-categorized, by chasing numbers the company runs away from opportunity, leaving it to competitors otherwise unencumbered with knowledge of numbers.

Assuming Apple avoids mis-categorizing what it does, will it be a “solutions” or “services” or “brand” company? Is it, as I used to say, a “blockbuster manufacturing line”?

Yes, and still that’s not all it could be. Nor is it enough to understand what will come.

My simple proposal is to think of Apple (and actually any company) as a customer creator. It creates and maintains customers. The more it creates, the more it prospers. The more customers it preserves the more it’s likely to persevere. This measure of performance for a company is not easy to obtain. It’s not a line item in any financial report.

The closest figure we have is that today Apple has one billion active devices in use. We’re not told of the total users or total customers because Apple cannot count people or wallets as accurately as it can count active devices. But as imperfect as it is, this number gives us a way to get close to counting customers.

So we know that at least Apple has created a large number of customers. Knowing total devices sold and number in use means that we can be sure that 63% of all the computers Apple sold are still in use. This means that most customers are recent customers. That is not necessarily good news. New customers are not well understood. We don’t know how these new customers might behave in the future.

Screen Shot 2016-03-28 at 12.28.22 PM

Will they come back for more of whatever Apple makes? If we look at the history of competitors or technology products in general, chances are they won’t. The industries Apple has been a part of are filled with one hit wonders. Companies which had parabolic trajectories and built no loyalties. Statistically speaking, success in Apple’s markets is always followed by failure.

But what if we did not seek correlation but looked for causation? What if we ignore statistics about companies other than Apple and focus on statistics about Apple’s actual customers? Rather than assume all companies are the same, what if we assume that some can be exceptional?  What if we we look for the anomalies, not the clusters?

We might want to ask about the causes of success or failure for a single company. We might want to sample its specific customers.  We might want to observe how Apple’s own customers behaved in the past.  We might want to use theories of brand value or theories of network effects or theories of software ecosystems.

These measures, rather than those of “comparable companies” might lead to different conclusions: That customers are loyal, that they will value the brand and that they are invested in a network. In other words, that they will buy from Apple again.

If we then factor in the size and persistence of Apple’s audience (customer base) we might conclude that there are factors which will allow it to grow rather than shrink. My analysis based on public data shows that the customer base has been increasing steadily.

Screen Shot 2016-03-28 at 4.17.19 PM

Considering this audience and the revenues generated, we can categorize the revenue by active device as follows.

Screen Shot 2016-03-28 at 4.15.51 PM

Each bar represents that product’s revenue per day in a given quarter (from Q4 2012 to Q4 2015). Each year is therefore represented by a different color. Dark green for 2012, light green for 2013, burgundy red for 2014 and dark red for 2015. For example, each iPhone in use was generating exactly $1/day in revenues (including services and accessories) during the first quarter 2013.

This allocates all of Apple’s revenues to these products and by proxy to customers.

In summary, the “average revenue per Apple device per day” is currently $0.68. If we assume one unique user per device then Apple collects 68 cents from each customer each day.[3]

Screen Shot 2016-03-28 at 4.19.39 PM

Combining the history of customer creation and customer preservation with the value obtained from each customer implies that the next 40 years will be about creating another large tranche of customers whose willingness to spend on whatever Apple creates will be relatively unchanged.

We don’t know the limit. One billion was hard to imagine even one year ago. We might see two billion devices in short order. Perhaps not. Perhaps as we have a multitude of devices about us all day the number will become less meaningful. But if the number of middle class customers grows and as Apple keeps its products within their reach, there is no reason to think that there will be a reversal of the last 40 years in terms of customer acquisition.

This analysis contradicts the current perception of the company as reflected by its stock price. That price assumes the audience will wither[4] That is not insanity. It is what we could expect if Apple were unexceptional.

We could surrender to correlation and ignore causation but statistics show that such an approach rarely works.


Incidentally, this and a lot more will be discussed at the next Subscribe conference.

  1. including Apple II, Mac, iPhone, iPad and iPod touch; excluding Apple Watch, Apple TV and other iPods. Includes Q1 shipments estimated at 63,597,000 Macs, iPhones and iPads []
  2. i.e. average people []
  3. In reality the figure may be closer to $1, as there are likely to be more 1.2 to 1.5 devices per person. []
  4. With a P/E ratio of 11, without a change in revenue per user, the only justification would be the audience shrinking by more than 90% over the next 20 years. []
  • Ian Ollmann

    Having trouble reconciling “each iPhone in use was generating exactly $.2/day in revenues” with the plot immediately above it.

    • Horace Dediu

      Sorry, that was a typo. It should read $1/day.

  • melci

    Hi Horace, excellent article as usual. It certainly highlights how huge the active iOS installed base is at close to 900 million active devices. Any chance you could graph this against Google’s 1.4 Billion active devices + the perhaps 3-400 million AOSP devices out there?

    With iOS coming in at 60% the size of Google’s 1.4Bn active devices and perhaps 50% the size of Google + AOSP, it shows how inadequate it is for analysts and commentators to always use that 15% quarterly smartphone shipment figure when comparing the relative sizes of these app platforms.

  • Secular_Investor

    Yes, I like Horace’s fresh way of looking at Apple which seems to be a way of understanding that Apple’s real model is to accumulate loyal subscribers, which makes it so different to most other “computer” or “device” or “software” companies.

  • melci

    By the way Horace, I notice there is no iPod Touch in your graph breaking down that 1 Billion active devices figure of Apple’s.

    From my rough calculations, I think Apple has sold almost 120M of this slim iOS-based “iPad Nano” devices since 2007, so I imagine they might make up at least a small percentage of that 1 Billion active device total.

  • Sacto_Joe

    Great analysis, Horace!

    The most impressive chart for me was the one showing steady growth of customers. When one considers the sheer number of new customers Apple needs to acquire to keep that growth happening, it is simply staggering.

    You are absolutely correct that the market is measuring the wrong elements. But fortunately, Apple is now taking full advantage of the market’s error in judgement. It is purchasing back huge quantities of it’s own stock at bagain basement prices. Thus we have a massive impact on earnings per share both because net income is still increading handsomely, and because that net income is being divided into fewer and fewer shares.

    I’d love for you to do an estimate, Horace, of how long you think it will be until Apple is earning $20/share, basically doubling it’s present EPS, and then how long until it doubles yet again….

    • Horace Dediu

      That’s a good question but we need to make more than one assumption. The float is shrinking by about 5% a year but that will vary with the price of shares and capital allocation strategy. If we assume no change in earnings and a continuing 5%/yr reduction is outstanding shares it would take 14 years to halve the share count. If earnings grow at 5% and shares are reduced at 5% then it would take about 8 years for EPS to double.

      • Sacto_Joe

        So here’s the quarterly numbers since share count started reversing:
        Tot 0.089 B shrs fy ’13, down 0.089/6.585=1.35%.
        Total 0.360B shrs fy ’13, down 0.360/6.298=5.72%.
        Tot 0.249 B shrs fy ’15, down 0.249/5.865=04.25%.
        I’m guessing 5% per year is a little high, but 4% is probably in the ballpark. Fiscal year ’16 started at 5.58 B shares, so 4% would subtract ~0.22 B shares. Subtract about the same in fy ’17 gives us 5.1 B shares by the end of fy ’17.
        Apple net income grew 46% over fy ’14-’15, and I think 40% is doable over fy ’16-’17. Diluted EPS for fy 2015 was $9.22, and net income was $53.94 B. 140% of that is $75.52 B.
        Dividing 75.52 by 5.1 gives us an EPS of $14.80. That’s a 61% (!) increase in EPS over the next two years.

        I don’t think it’s going to take 8 years for the EPS to double, Horace….

      • melci

        Joe, the growth rates are even more interesting when you look at the increase each year numericallyrather than percentage and discover that 2013 was the anomaly for Apple not 2015:

        Year Sales Increase
        2011 = 93.1M (45.6M)
        2012 = 135.8M (42.7M)
        2013 = 153.4M (17.6M)
        2014 = 192.6M (39.2M)
        2015 = 231.3M (38.7M)

        If you look at this table of the last 5 years, you see that Apple increased sales each and every year by around 40M iPhones, except for 2013 when they only increased by 17.6M.

        Fears about a drop in 2016 are unfounded based on this historical data.

      • Sacto_Joe

        BTW, Horace, I’ve been getting a LOT of static on Braeburn Group over my projections. So I did a sum of iPhone sales year over year and two years over two years for the last two years. Here’s the info:

        iPhone sales:
        Tot fy ’12 = 135,791
        Tot fy ’13 = 153,666
        Percentage growth yoy =13.2%
        Tot fy ’14 = 192,662
        Percentage growth yoy = 25.4%
        Percentage growth over 2 years = 41.9%
        Tot fy ’15 = 231,533
        Percentage growth yoy =20.1%
        Percentage growth over 2 years = 50.6%

        Note that this is in calendar years, not in fiscal years.

        So on a 2 year basis, we’ve had iPhone sales growth over the last 2 years of 41.9% and 50.6%.

        Presently, the market is betting that we won’t see ANY year over year growth in iPhone sales for 2016. I don’t think there’s any doubt that we will when viewed on a calendar year basis rather than a fiscal year basis, because on a calendar basis we’ll include the first quarter of iPhone 7 sales.

        Is the glass half full and getting emptier, or half empty and getting fuller? As Einstein said, it’s all relative….

  • WFA67

    It April 1997 I had not yet bought my first computer. But I had enough familiarity with Apple to somehow feel that there was something good at the heart of the company, and which (in my mind) “deserved” to thrive. Though this was in the days of Gil Amelio’s incumbency, I nonetheless bought some stock. Not because I’d done research which might have shown that Apple was on the ropes; rather because there was something with which I identified, and I wanted to own a piece of it.

    So I suggest there is also a ‘tribal’ effect in play with Apple’s success. We want to identify with, to be part of, a winning tribe. In terms of evolutionary psychology, there is possibly a faint resonance with the survival value conferred by such membership.

    • hannahjs

      I’d say you’re right on the money! Others will say with a sneer, sure, it’s the iSheep. They’re right too, except that the sheep are self-shepherding; no “reality distortion field” required.

  • handleym

    “think of Apple … as a customer creator”
    The obvious rejoinder (or at least point to consider) is what happened to all the customers for those Windows systems? What about Dell customers, Google customers, Samsung customers?

    The MS case is easy. Most of those Windows/Office purchasers were corporate entities, or individuals more or less forced to match the environment around them. Coerced purchases that were switched as soon as it was possible and, even when not switched, were not repeated if at all possible.
    Dell (and pretty much every other PC vendor) seems in much the same situation, unable to generate any sort of real loyalty and satisfaction.

    Google is more interesting. They do have a loyal customer base (along with, of course, a much larger indifferent customer base). They have a business model that is problematic, and who knows how that will play out? Things could continue as today, they could turn into the dystopia of a thousand SF novels (with Google as the actual form of malevolent corporations from Ubik to The Windup Girl), or Google could transition to a company selling its (generally worthwhile and worth-paying for) services as monthly rentals.

    Samsung (or Xiaomi) in principle could be an Apple-lite; perhaps unable to compete with the full Apple package, but providing Apple-level hardware to those who, for whatever reason, don’t want the full Apple experience. However I’m dubious about both of them. They both seem to be driven by the worst sort of short-term MBA mentality rather than the sort of Akio Morita or Steve Jobs build-it-great-and-customers-will-follow mindset.

    Meaning, I guess, that I don’t see Samsung (and Xiaomi) as worth betting on for any sort of long-term growth. And I see Google as a much riskier bet than Apple. Google probably has a slight edge over Apple in sheer technical competence, but they have tremendous business model risk.

    Apple’s vulnerability remains the same as it has been for the past four years or so — incompetence in software and the cloud. The (multiply-) botched iOS 9.3 delivery just reinforces the point — why, after three years of customer and developer complaints about this, is this sort of thing STILL happening? They are treading water, not growing noticeably worse, but not not noticeably improving either, in spite of claims that they would do better. This sort of vulnerability is very real, and doubtless is hurting Apple at the margin, but it isn’t as vulnerable as the sort of catastrophic risks Google faces. (eg a truly serious rampant attack on Android — maybe a 30% ransomware infestation — coupled to Google’s limited ability to control the incompetence and intransigence of its hardware and carrier partners; or a drastic reappraisal of the laws around the collection and use of private data in Europe, the US, or even some unexpected outlier like Japan or South Africa).

    So I’d say in terms of safety of bet, Apple is at the top of the heap — but that is somewhat conditional on their, eventually, getting their SW/cloud act together. People are willing to tolerate some level of bugginess in their OS, some level of Siri incompetence compared to Google’s voice recognition, some level of maps brokenness (today it is that OSX maps is not displaying traffic, at least not where I live — iOS is fine). But this forbearance will not last forever.

    The rapid drive to Swift seems like a good attempt to try to deal with some of this, but it only solves a small part of the problem. Another part of the problem seems to be a curiously anemic (or incompetent?) testing infrastructure that seems to test only very constrained use cases, and to learn nothing from past fiascos. A third problem seems to be cultural (and is, IMHO, the most worrying of all) — an unwillingness to provide the tools to peer into the guts of iOS (and increasingly OSX) so as to allow power users to understand why their systems have broken and thereby provide Apple with early warnings of issues in existent or upcoming software.

    Who would have thought that the biggest ever (as far as I can tell) actual data-loss/denial of service to iOS devices would have come from Apple’s own software (and a variety of high-level incompetence surrounding its testing, rollout, and inability to examine why it had failed)? THAT is what Apple is up against over the next five years…

    • Walt French

      Your post suggests an interesting question about the right metric for quality. The rollout for iOS 9.3 was completely glitchless for my 6+; my wife’s 5S showed it as not ready until we looked last night. I have seen discussions of failures, for sure, but I have no idea what fraction of users were inconvenienced for an hour or a day. For sake of argument, let’s say [1%] of iOS users who tried to upgrade were troubled for at least 30 minutes, and that only 20% of users tried, netting 0.2%, actually a rather large number. Again, an arbitrary number.

      Meanwhile, 9.3 included security updates that benefit the other [99.8%] of users. Releasing the update means that black hats will have much less incentive to push exploits based on the fixes. It will therefore forestall or prevent untold woe—possibly, hours of grief changing credit cards, trying to get money back, etc—for ALL users from those black hats.

      What percentage X% of users who’d be inconvenienced in an update, would be the cusp, where you proceed with fewer, and delay with more? And what level is low enough to be able to claim that the update preserves Apple’s “premium” experience, given that the gains are so invisible, so immeasurable?

      • handleym

        It’s not just the users who were unable to use their devices because of lack of SIM and/or lack of knowledge of earlier AppleID info.
        An apparently larger problem is the issue related to, especially if the problem there has more or less totally destroyed the usability of one’s keychain (details remain uncertain, including the extent to which a doubtless soon to be released 9.3.1 can rectify the damage).

        But, as I said, the REAL worry here (IMHO) is that Apple is preventing even power users from being in a position to monitor this sort of thing and warn Apple in advance. Sure, people, including power users can tell Apple “my phone has stopped working”. But it’s the existence of tools that allow for looking into the system that could have allowed power users (at or elsewhere) the ability to see how large the a given phone’s alternate link databases is, to perhaps see how the system slows down as that database grows, and to warn Apple that there is likely a problem here. To give a different example, quite a few people have occasionally warned of shenanigans on OSX because they’ve been able to use Little Snitch to warn them of some app behaving badly. But no-one is in a position to make similar warnings on iOS.

      • Walt French

        I saw stats yesterday that 9.3 is apparently the MOST STABLE of recent iOS releases, in terms of % crashes. I’ve misplaced the link—I don’t think it’s either the most unbiased source OR the best metric—but I haven’t seen a BETTER metric that does support your concerns.

        With regard to this bug: Alexa apparently says Booking is #327 in the US, #105 globally. (Did anybody else go wild w associations?) With ~9K reviews, I’ll guess tens or hundreds of thousands installed the iOS app, and were at risk from the bug IF they updated. That’s hardly obscure, but a clumsy workaround for 0.01% of users, versus forcing the other 99.99% to download a new OS version, doesn’t seem like a bad tradeoff.

        I’m not saying I’m fine w bugs—I’ve recently lost a couple of days to a very similar situation, where my somewhat-ill-designed C program caused Xcode to freeze, apparently chasing a dependency graph in a loop. (The prior version merely crashed after printing a file.) It should NOT be possible for a user, even one as lacking in skill as I, to crash software. But bugs happen, and the question is how well the company and its user base manages them. I don’t see the gawdawful-worrisome trend you do.

      • handleym

        I think companies like Apple are in a race of software quality against expectations.
        The issue is not just some sort of raw “crashes per user per day” (I saw the same article but the methodology involved, or exactly what was being reported, was not explained at all). As we come to depend more on these devices, even minor bugs start to have more of an impact on our lives.

        So when, say, Apple Maps first appears, if it’s a little buggy, well, we lived for years without Apple Maps and life goes on as before. But once you have reshaped your life to expect that Apple Maps is always present (or some part of it, like say Transit directions in an area you are new to), it’s a much bigger deal if Maps (or Transit, or Traffic, or whatever) go down for whatever reason.

        And the same sort of thing if, for example, your phone is mostly unusable (eg all links don’t work); that’s simply a much bigger deal today than five years ago; and it’s a bigger deal than if some lousy 3rd party app frequently crashes (which, for all I know, is what that Apteligent is recording and reporting).

      • Childermass

        The follow up question has to be: are power users customers?
        Given what has happened over the last twenty years or so the effort has all gone into usability and simplicity (or invisibility). No screws on the cases is a pretty clear message. Opening something and having your warranty voided is another.
        Are power users customers? Not to Apple, it seems.
        This is probably the single most important legacy Jobs left.

  • Rocket_man

    Excellent analysis, as always Horace. By the way, I notice that your annual rate of blog posts on is similar in trajectory to the Atari ST (see my scaled addition to your graph). Your posting has been disrupted by your podcasts and conferences, I think!

    • Horace Dediu

      That and my having a job which has a different publishing agenda.

  • RichardinMelbourne

    “The purpose of [a] business is to create and keep a customer.” Peter Drucker

  • Fran_Kostella

    Great article, as usual. Just one nit to pick. About 8% of males have varying degrees of red-green color blindness. For myself I have to enlarge those charts about 500% and stare at them a bit to determine which is red and which is green. If they don’t have a similar light/dark value then it is easier to spot the difference. Publications that pay attention to this avoid the problem by either avoiding one of the colors or by varying the light/dark difference between them. It seems most common to make the red brighter or more vibrant and darken the greens. If that’s an easy change that can be made in the future that would be grand, thanks!

  • hannahjs

    Horace, your paragraph 4 can be true only if Apple (being an American computer company) were excluded from “all American and Japanese computer companies put together.” Sorry—I’m just a squirrelly nit-picker today, overawed by your Yoda-like farsight.

  • berult

    What would be the right qualifier for an entity that is all at once software’ish, hardware’ish, service’ish, all the while trussed up in a tightly knitted mantle of humanism…which can only be unstripped, not by evolutionary verdict, but by reactionary decree?

    Dare I venture an over-mashed, blush-inducing, buzz-worded cliché:

    Apple is a paradigm’ish company. And time syncs effortlessly…and unapologetically…to it.

  • BennyMarks

    Say there is indeed a unique set of rules, or a unique point of view that we should use in order to be able to analyze correctly and understand the difference between Apple’s way of conducting business and other tech. companies regular way. Say further that in turn, this analysis may reveal to us Apple’s possible different future from the somewhat gloomy future inevitably waiting for other companies, based on the known business lifecycle statistics.

    Setting aside any bias I might or might not have towards Apple, I tend to agree with this idea, since it can explain the constant dissonance between how Apple is portrayed by many expert market as well as tech. Analysts, and the yet again surprising results in each fiscal quarter, and after every “dull” company event in which a new product is introduced.

    However – in order to make this hypothesis valid, there need to be a proof that Apple is indeed utilizing this strategy to its full, making this more than just a nice wishful thinking theory running in our minds.

    If I got it right, the theory you suggested can be roughly summarized into two major rules that should be at the heart of Apple’s business strategy:
    1. Constantly “create” more customers, as if your product is customer units.
    2. Bind the customers to your company, preferably by positive means like loyalty, beliefs, common sense and logic, emotional reasoning etc.., rather then negative means like a binding contract.

    Looking at it this way immediately raises some difficult to answer questions:
    1. How do we know that Apple is indeed using this strategy, when our minds keep telling us that it manufactures gadgets, and not customers?
    2. These set of simple rules are actually the ABC of marketing, the first thing taught to every freshman in its first marketing 101 lecture. How can we take the liberty to assume that they apply to Apple only, making it the sole company in the world that is wise enough to fully understand and implement them correctly?
    3. Assuming that Apple indeed is implementing the rules better than it’s rivals, and knowing that some of it’s competitors don’t hold themselves from imitating Apple’s each and every move, what stops these companies from learning and eventually performing the same strategy to its fullest, thus escaping their forecasted gloomy future, as well as improving their ability to compete better against Apple?

    So far there is nothing that suggests that Apple is doing something uniquely different, that it’s competition can’t imitate immediately, leveling down the slightly small advantage it hoped to have. And yet we can intuitively feel that there is a difference that is hard to pinpoint between Apple and the rest. Apple seems to always be at the front, and all other companies are chasing it, almost as if Apple knows where it is going, whereas others are guessing. Maybe Apple knows something that all others don’t.

    This brings us to the most intriguing set of questions:
    4. Does Apple know or understand something that is hidden from its competitors, analyzes and in fact all of us?
    5. If so – how does Apple keeps this secret a secret for so long, and with such a success?
    6. Trying to follow Apple’s way of thinking, based on it’s public actions visible to all, can we understand the logic behind Apple’s long term agenda? Can we at least stumble on it’s secret?

    Wow. There is a slight smell of conspiracy in the air.

    Making things short:
    We all know that Apple is unique somehow, maintain some sort of a difference between it and the rest of the market, that is clearly evident both market wise as well as tech-wise. It is somehow able to constantly beat the analysts forecasts, as well as the competition, in spite of apparent solid logic and reasoning.
    Clearly this is not based on pure ongoing luck. Neither it is the result of a unique marketing method that can’t be duplicated.

    There must be something else that can explain Apple’s enigma.
    The question is: Can we – using the tools that are available to us, reveal this mojo that gives Apple it’s advantage?

    • berult

      The ambiguity resides in the profound, and widely held misconception about Apple, “the one-product company”. A product can be an object, can be a service, can be an algorithm, can be a subject…an end-user profile, can be anything in the realm of the marketable. Tangible or intangible.

      Seldom has evolution afforded life the explicit vectorization of its own intrinsic mission statement: to make the world a better place than we, as an evolving species, found it. In the process of evolution, dynamics subserve dialectics. Therefore all of the above manifestations of the product concept must arbitrage their own cog in the grand scheming of things to come. Concurrently, either complementarily or adversarially so.

      Apple’s one and only product, intrinsically…a Steve Jobs legacy one, is but a ‘formality’. Natural, for it espouses basic evolutionary tenets. Extraordinarily complex, for it does so while exposed to differentiated timeframes in dealing with simultaneities. Only a single integrated, well ‘versed’ organism can achieve that level of perfunctory efficacy under the immense, effervescent pressure of efficiency.

      Apple’s core, go-to-market product can no more be duplicated than evolution can be risk-abated. berult.

      • BennyMarks

        Kindly let me say first that I am honored by your profound thought reply to my comment. In our nowadays communication bombarded world, such replies are scarce.

        Philosophically your notion is of course correct, and is applicable also to Apple’s case. One has a huge advantage in being able to grasp the idea that events take much more complex reciprocal relations with each other than is usually seen by the naked eye. Understanding deeply the objects involved, their affinity to each other and the processes being performed on/with them, often reveals the logic behind, and the fact that this logic is much more simple and coherent then the sometimes random Brownian motion of its particles.

        Unfortunately, the perception of the simplicity of the whole, while still being aware to the particles comprising it in harmony and balance, is eluding to most of us humans, hidden to but few. Perhaps this is the cost of us being a rapidly evolving species, or a product of the dissonance between our high thinking capabilities, and our animalistic survival driven instincts.

        Most of us will come to the understanding at a certain phase of our lives that “The world is not just black and white, there’s also grey”. Then we usually realize that on the Black-White spectrum there are many kinds of grey (although for some there are only 50 shades). Few will come to the conclusion that there are also other colors, and even fewer will realize that color is not the only factor in the equation. It is our survival instincts that drives us to categorize attributes and characteristics of objects around us using strict cause/effect relationships between them, so that when later stumbled upon, or at times of need in the future, understanding their meaning will be immediate, based on previous encounters, without the necessity to recalculate their meaning again, an act that takes much more time. In fact there is no good/bad absolute linear scale, neither there are hate/love, truth/lie, just/unjust, right/wrong, and so on (black/white included). All attributes coincide in making a mix, contributing their impact independently and without contradiction to each other, making together what we refer to as the whole. It’s the combined contributions that defines the attributes of the whole.

        Back to the subject at hand. Observing and analyzing correctly a given system, in our case – Apple’s marketing strategy, is not always straightforward and easy, as we all agreed above. However as outside observers we can suggest new points of view, and formulate new set of rules that may pore new light on the so far unexplained shadowed aspects of Apple’s success, as did Horace in this article. Horace’s unorthodox point of view is then validated and broadened by your comment as a manifestation of basic evolutionary tenets, which I absolutely agree to. The extraordinarily complexity of this way of thinking, having to go down to the particles level in order to locate the particle contributing more significantly to our understanding of the whole, and taking into account some other factors like time-frames and simultaneities (by competitors), is another hurdle we have to deal with. All of these are hard to implement, but as outside observers, analyzing one aspect of a given picture, it is doable.

        However – taking this so complex evolutionary tenets, and assuming that there is a man made organism that can put them to practice on a daily basis as simple as tying shoelaces is in my opinion, impossible, and presumptuous by any such organism. It’s one thing to look at a given static picture, figuring out one or few aspects of it using down-scaled hints from another very complex system. It is another thing to build a full live system from scratch, that is based on the full scale of rules of a very complex system called evolution. There are too many variables and interactions between them than Apple could successfully implement rationally, and then fine tune and maintain. This is assuming that Steve Jobs was rational and logical like a robot to begin with, or otherwise had aspirations to play god. And if Apple indeed possesses the capability to build such a system, why stop there? Why limit yourself to creating customers of electronic devices? Why not run the world?

        As smart as Apple is, i don’t think that it is capable of constructing and running an “evolution based system” with all its complexity.

        However – since Apple is successful, there must be something else, that is still complex but not divinely complex that Apple learnt to utilize, a way of thinking that can be adopted as a guideline for every product they design, whether it is an electronic device, a piece of software, a service or a customer. This theory that Apple may implement should be basic enough to comprehend and to follow, but hidden from plane sight. Acting according to it in the particle level will have automatic influence on the whole picture, leading other particles to automatically react and align themselves to the same direction. Since Apple’s strength is in the computers market, and since it is interested in “creating” and “maintaining” customers using the tools that it knows best to make, Apple’s secret must be somewhere between technology and psychology.

      • SubstrateUndertow

        Or maybe “Organic Process Literacy” applied to a constrained domain does not require unlimited
        micro-management drill down.

        Maybe defining/operating a limited set of related processes to share an emergent/integrative end-point mediating substrate-vector (Strange-Attractor) such as mutually-adaptive participation in targeting and surfacing the characteristics of the desired functional halon is enough to manage/mimic a good enough evolutionary trajectory within a limited domain/goal ?
        i.e. early plant and animal breeding/evolution

        Both James G. Miller and Douglas R. Hofstadter were trying to tease out an accessible “Organic Process Literacy”. Meaning tease out a general/simplified set of organic narratives, metaphors and language to elucidate the recurring reusables common to all complex/adaptive living systems. They tried to elucidate an “Organic Process Literacy” that could expedite a wide spread meme/appreciation that all social/economic system are in fact simply fractal instantiations of a universal complex-adaptive-living-system dynamic. We cannot work that magic organic-mojo sauce if we can not effectively characterize its components into a workably shared conceptual platform.

        Completing/evolving/popularizing a generally workable and generally accessible “Organic Process Literacy” seem to me the prerequisite to any serious social/economic stability in an organic network-effect dominated global organizational culture.

        Mutually-adaptive-behaviour(synchronicity) is the universal “Strange Attractor”, the organic magic-sauce. It evolves and colonizes all material realty relentlessly towards a universal causal-teleological-integration by statistically favouring the emergence of mutual-adaptivity–>complexity–>conscieousness, while all other organizational vectors ultimately dissipates as noise. Complexity is times way of filtering/surfacing all the inevitably sustainable organizational dynamics.

        I think Steve Jobs was well aware of these
        Living-System/Zen general principles and he managed to surface a corporate culture that within its limited functional domain could surf such mutually-adaptive narratives/metaphors to a first approximation organic success. The question is can that culture be sustained and expanded or does his first-approximation organic-corporate-culture hit an inherent local-domain complexity wall as you suggest ?