Microsoft’s Incredible Run

2011.07.15   prev     next

WHEN you say that somebody has had an incredible run, or an amazing run, or something like that, you typically mean that they’ve been pretty damn lucky for some time now. And you probably also mean that their good luck is about to run out.

That, I suspect, is what Fabrice Grinda meant when he said, “There is no denying Apple has had an incredible run.” (The article is titled, “Apple: Short Term Winner, Long Term Loser” — you be the judge what he’s trying to say.) And it’s probably what Joe Wilcox meant when he quoted Lea Meade, “Can’t see Apple continuing this amazing run of product successes without Jobs around to make those final calls.” And it might be what Jeff Bertolucci of PCWorld meant when he mentioned that Apple, “has had an amazing run of success product launches since 2001.” Or what Shane of TCGeeks meant when he opined that, “Apple has been on an amazing run for the past few years.” Or what Adam Fischbaum was trying to suggest in his StreetAuthority article, “3 Reasons Apple’s Incredible Run May be Over.”

The supreme irony of these suggestions is that Apple’s dramatic successes in recent years are not based on luck, but Microsoft’s dominance of the computer industry in the late ’80s and ’90s was based on luck.

Here’s how Bill Gates’s Microsoft rose to supreme power in the computing world:

• Apple was on top in the newly created personal computer market (late 1970s).
• In the early ’80s, IBM walked into that market and took it away from Apple with the IBM PC, largely based on business users opting for IBM due to its established name (and associated FUD factor).
• IBM lost control of the PC spec, and it became the MS-DOS PC with de facto Microsoft control.
• Microsoft blatantly copied the Mac, called it “Windows,” and slapped it on top of MS-DOS.
• In a jury trial, Apple won a huge verdict against Microsoft. Microsoft appealed, of course, then appellate judge Vaughn Walker threw the whole case out, which basically sank the Mac and handed it to Gates et al. on a silver platter.
• Apple’s board kicked out Jobs (a product visionary) and replaced him with a salesman. Apple limped along for many years after that with nothing much new to crow about.

So Microsoft basically lucked into the whole thing. It is Microsoft, not Apple, that has had the incredible run with Lady Luck. And that run came to an end when Apple, teetering on the brink of financial collapse in the mid ’90s, asked Steve Jobs back and gave him the reins of the company. Over the following five years, Apple rapidly climbed out of financial hardship to a reasonably successful (though still market-minority) position. Then, in 2001, Apple introduced the iPod. And right around the same time, Gates resigned the CEO post and gave it to Steve Ballmer. The iPod became wildly successful and helped build Apple into a financial powerhouse. Then Jobs introduced the iPhone in early 2007, and a few months later Gates retired.

Apple’s successes have never been based on luck, but rather on the creation of unique, new products that no one else was seriously attempting before.

• Late ’70s: The Apple II was the first personal computer with hi-res color graphics, sound, and a full, typewriter-style keyboard in one device.
• Mid-’80s: The Macintosh was the first mass-market computer with a graphic user interface and proportionate-width fonts.
• ’80s: The LaserWriter was the first near-print-quality printer to be be integrated with a mass-market OS featuring what-you-see-is-what-you-get printing.
• 2001: The iPod was the first portable digital music player to hold a large (thousand-song) library in a device small enough to fit in your pocket, and with high-speed data transfer.
• 2007: The iPhone was the first really decent touchscreen-based user interface on any device ever, and ran the first malware-free-by-design OS (used today on the iPhone, iPod Touch, and iPad).
• 2008: The App Store was the first piracy-resistant, all-electronic software market, in which app authors collect the great majority percentage of revenue, not the small minority percentage they had been given for decades prior.

And while the iPad technically may not be a first, it makes heavy use of several of Apple’s firsts from the 2000s.

Not only is Apple’s success due to the innovative quality of its products, but it has achieved this success despite Lady Luck giving gold nuggets to the competition for well over a decade — and still giving Apple no special favors after that.

It is Microsoft, not Apple, that had an incredible run. It is Apple, not Microsoft, that is finding enormous success through daring innovation, not luck.

And as long as Apple can continue to be run by a product visionary like Jobs, there’s little reason to think that its successes won’t continue on to heights greater than anything we’ve seen thus far.

Update 2012.03.17 — Tim Cook may not be a product visionary, but Jonathan Ive is, and the word is that Jobs made sure Ive’s position and design powers at the company are untouchable. I’m optimistic.

Four-year update — By any objective metric, Apple’s just done better and better every year — yet here’s Mike Daisey in The Guardian (1 November 2015):

“There’s no question that Apple has had a legendary run and often exceeds Wall Street expectations. A company, however, is more than its numbers. ... There’s no question Apple has had a legendary run over the last decade.”

“Apple is the most profitable company on the planet today ... who could see anything wrong? Well, there are signs, if you are interested in looking for them.”

Never mind about the future, Mike — what are the signs that Apple’s success over the past couple decades is some kind of “run?”

See also: The Fall of Microsoft

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