Early this month, Apple Corporation became the first US company to hit 1 trillion dollar value. Steve Jobs would have been really proud if he was alive. It is truly remarkable how a once nearly bankrupt company is now world’s most valued corporation.
Such a recognition does not come without creative minds, near perfect marketing, attention to details in each of their products and a mantra they have carried for decades. Simplicity.
Today we talk about major milestones in Apple’s journey to a 1 trillion company.
Steve Jobs Return
Return, you ask? As many of you may already know tussle between Steve Jobs (Apple Co-Founder) and John Sculley who Steve had brought over from PepsiCo to make him Apple’s CEO. Steve believed Apple needed a CEO like John, who was then President at PepsiCo and had launched successful Pepsi Challenge marketing campaign. Jobs wanted Sculley to bring his marketing geniuses over to Apple to establish Apple as a consumer brand.
However, after many power clashes between John and Steve, John convinced the board to strip out management duties from Steve Jobs (which in my eyes was like firing) from Apple. This forced Steve Jobs to resign from Apple.
It was during this time that sales started to decline at Apple. The shift to high price – high profit margins led to slow sales making the management shift after Steve’s departure a failure.
It was just not about the high price. The market was getting loads of PC Clones at a much lower prices and with similar features to the Macintosh. It was also during this time Microsoft was gaining popularity and a fierce competition to the Apple. For sure Microsoft was a software company but Microsoft and Apple are always regarded as tech titans of their times and rivals of the PC era. Microsoft produced software for the PC clones which hit Macintosh in a big way.
Apple unable to bounce back even after trying various options. Ultimately, Gil Amelio (CEO then) purchased Steve Jobs’s NeXt (the company Steve founded after Apple) in 1997 which brought Steve Jobs back in the business.
The rise of Apple
Steve Jobs made radical changes including shutting a lot of their product lines to bring focus on few products, change of board and also shook hands with long time rival, Microsoft co-founder, Bill Gates.
Bill Gates appeared through satellite image in Macworld 1997 to announce 150 million dollar investment in Apple. This never went down well with a lot of Apple fans and enthusiasts. Microsoft’s investment appeared more of a help or bail out for Apple’s down fall than an actual investment.
When Bill Gates was projected on screen and Steve Jobs looking at the giant screen, many tech pundits and fans around the world felt Bill Gates boosting his power over Steve Jobs and making Steve look helpless and small.
The turn around for Apple happened when Steve Jobs introduced the All-In-One, smash hit – the iMac in 1998. The iMac was designed by Johnny Ive (current Chief Design Officer) and within its first five months it sold 800,000 units.
The “i” Era
Apple would never be the same after introducing the first iPod in October 2001. The company has since never looked back nor seen significant decline in their revenues. The “i” era that I like to call for Apple is a history that will not be replicated by any company in a long time to come.
iPod was a smash hit which has sold well over 400 million units. iPod was not a mere product but a cult. Its iconic headphones and dial like menu resonated with youngsters and well with older generation. It became a fashion statement just like the iPhones today. Indeed it is iPhone that made Apple swell with cash but the product that started it all, was undoubtedly, the iPod.
Apple was no more an underdog. Between 2003 to 2006, the stocks skyrocketed from $6 to $80 per share and in 2006 Apple dwarfed PC manufacturer giant, Dell in market cap.
And in 2007, the iPhone happened. iPhone was a game changer not only for Apple but for the entire smartphone industry.
The unveiling of the iconic first generation iPhone at WWDC 2007 was such an important moment for the entire industry and Apple that it has made what Apple is today and all the other players in the market.
Steve Jobs famously introduced iPhone as three in one devices, iPod + Phone + Internet.
iPhone dethroned the leaders of that time, like the Nokia, BlackBerry who were on top of the game. I don’t need to go deep into this as everyone knows the history. The number one brands and companies of that time went bankrupt and out of business. Nokia and BlackBerry however have relaunched themselves.
Undoubtedly, in the times where customization, physical keyboards, downloading apps from the internet was all normal. iPhone came and changed each of those. You could no longer download apps from the internet. You could not transfer music or data from one phone to other. Which at that time we were all used to via Infrared and later Bluetooth. I loved carrying extra battery whenever I travelled longer distanced just in case I run out of juice from my phone I could swap the battery, iPhone chose simplicity over complexity and got rid of swapping batteries. Above all, where each one of us sworn upon physical keyboards, Apple made us believe software based QWERTY touch keyboard was the way into the future. Where you could simply update keyboard with new features via system updates, unlike physical keyboard where you had to wait for the new model to release and users to buy new phones.
The next category defining product by Apple was not so surprising, was the iPad.
At first when I held the iPad (launched in 2010) I actually did not understand the existence of such a device when one owned an iPhone. But later I realized it was an important category for users who mostly consumed content. It was a perfect in between device. A bigger screen than an iPhone and easy to use, long battery life and touch first mobile operating system that was smaller than a laptop which could be used while sitting on a couch.
Apple has reportedly sold over 360 million units since its launch. And it is the only successful true tablet in the market even today. Microsoft’s Surface Pro devices are also considered as tablets, but they are first productivity and lean more towards a 2-in-1 hybrid device. Surface Go however is Microsoft’s first tablet device aimed at students and first line workers.
Apple – 1 trillion dollar company
More than 10 years later, and iPhone is still Apple’s biggest selling product that accounts for more than 50% of the entire Apple revenues.
Granted, Apple has slowly shifted it’s strategy towards services and subscription model. Apple Music, a service which was recently launched now stands right behind world’s number one music streaming service Spotify. To put into perspective, Spotify currently has 83 million paid users since the service launched in 2008 while Apple Music which launched in 2015 has 50 million paid users.
Apple overtime has created the very best ecosystem of its products and services. It is no wonder once a user buys an Apple product rarely gets out of it. It has seamlessly stitched all of its products and services.
Look at it this way. You have an iPhone, you get free and paid apps from the AppStore. But Apple Watch and AirPods works magically with the iPhone that compliment each other so well. AirPods by far are one of the best wireless Bluetooth headphones that just works each time you plug them into your ears. iPad, Macbooks also work harmoniously with each other and of course with rest of Apple devices, specially the iPhone. With handoff feature, you could painlessly continue working on your MacBook. You could pick up calls or reply to iMessages. All these devices work beautifully and handle complex tasks behind the scenes.
iPhone X, iPhone 8, HomePod, refreshed MacBooks, the new powerful iMac, the new iPad, Apple Music, AppStore all leading devices and services in their categories has made Apple reach the 1 trillion market cap.
Apple users merely don’t take Apple products as products, but it is a status symbol, a device that defines simplicity over complexity.
Apple doesn’t market its products. It markets emotions, experiences that touch peoples lives with their products. It is sheer marketing genius.
Today Apple enjoys being the number one brand in the world and it will continue to sell well its products in high numbers in years to come.
But as the smartphone market saturates, Apple must shift focus from its cash cow iPhone and make the next blockbuster product soon.
Other companies, such as Microsoft are already looking at the next wave since it missed the smartphone train in a big way. Its rumored dual screen foldable Andromeda device is expected to hit the market sometime next year which reported will run customized version of Windows 10 focusing on productivity first.
There are very many inspirational lessons and vision for the future in the history of Apple. Some of the things that I am inspired by are when Steve Jobs said,
We’ve to let go of this notion that for Apple to win, Microsoft has to lose.
This statement by Steve is so profound in my opinion. We must not look at our competition or fight them to win. We should always strive to be better than yesterday as a person or as a company. Every organization has its strengths and weaknesses, for Apple, they focused only on its strengths and forgot what the competition was doing or as if they were in some war and must win.
Steve, also focused on design and simplicity. He famously said in many occasions on stage that, “it just works”. For Steve, a device should be very easy to use, very simple, and should always work as expected, the way it did when the user bought it first.
As much as many tech enthusiasts may not agree with this, as techies love to customize their devices to how they want. But the majority of the average users who want the device to just work, the way it is supposed to with limited technical knowledge, Steve’s idea works best for them.
As the industry enters into the next wave of technology in the smartphone, it will be interesting to see if Apple still leads from the top as it has for more than a decade. Apple is so dominant that, when it ditches headphone jack, the industry follows, when Apple creates the stupid notch, the industry copies. This is the impact Apple has over the industry. We wait and watch for how long this continues as the new players are rising while Samsung and Microsoft prepare their foldable dual screen pocketable devices.