From its humble beginnings 36 years ago to its ascent to the most valuable company on earth, Apple has achieved truly incredible things. 23.9% profit margins, for a hardware company? Yup. Roughly $100 billion in cash, tucked away for a rainy day? Yup. 60% Y/Y growth after 35 years in business? Yup.
How exactly have they achieved such incredible success? Now that’s the trillion dollar question.
I’ve studied Apple for years; their business methods, their products, their stock fluctuations. I’ve read books and articles, watched videos, studied earnings reports, and watched product launch after product launch after product launch.
After all that observation, I think I’ve got it figured out…and perhaps it will help to put it in context of some recent Apple happenings.
At WWDC last week, Apple announced their new 15″ MacBook Pro with a retina display. 2880×1800 pixels worth of pure awesomeness. It’s an impressive machine, to say the least. But to me, the most interesting part wasn’t the awesome list of specs…it was what was found when the new laptop was taken apart.
They found hardware that was seriously locked down. Like RAM welded into place locked down. The message comes through loud and clear: “don’t change anything about our machine.” (though why you’d pay $3-$4k just to make changes boggles my mind) And because of this, some people are complaining, some are worried, and some just don’t seem to understand why Apple would do that…but I get it 🙂
There’s a method to the madness.
Apple products are about a fantastic, replicable experience. Apple know that virtually anyone can use their products, with little or no instruction, and that the experience will be a great one…and they know that because they control all of the pieces of the user experience puzzle. By maintaining stringent control over both the hardware and the software, they ensure a consistent, high quality experience.
Why won’t they let you upgrade your own RAM in the new MacBook? Because they don’t want you messing with their perfectly crafted experience. Everything is designed to work together as perfectly as possible (in theory), and if you change a variable in such a carefully crafted ecosystem, you run the risk of upsetting the apple cart (pun intended.)
What sets Apple products apart, ahead of every Microsoft Surface, Motorola Xoom or Blackberry Playbook, is a near-perfect blend of both form and function, aesthetics and masterful usability. And it’s an experience that simply can’t come from a more open platform.
Steve Jobs may have been something of a control freak, and he was definitely a perfectionist, but the output of that approach is the Apple we see today. Well designed, well thought out, and meticulous in every way.
Apple is all about usability, and that is why they are kicking the trash out of their competitors. Other manufacturers focus on selling their awesome specs, or their low price, or their “open” operating system, and in the process they fail to be true competitors to Apple because they fail to understand what makes Apple products great.
Apple products are expensive. They look expensive. They feel expensive. They’re solid, durable, and made from high quality components. They work well, and they last a hell of a long time if you take care of them. They’re worth every penny, as anyone who owns an iPad, iPod or iPhone would tell you.
At the end of the day, that’s it, the heart and soul of why Apple has become such an incredible company. They make great, premium products that perform wonderfully time and time again. They’re easy to use regardless of your age or technical ability, and they look and feel both beautiful and expensive. Apple gets what people really want (not necessarily what they say they want, but what they really, really want) and they deliver it time and time again.
And of course, they produce their awesome products in a tightly controlled ecosystem that helps to deliver a consistently great product and an equally great user experience.
That’s why Apple will continue to kick the trash out of their competitors, and why I’ll continue to buy their products for myself and my family members. The folks at Cupertino may be mad, but they’re Willy Wonka mad…often misunderstood, but always awesome!
So…$1,000+ a share? Assuming the global economy doesn’t crash in the next year or two or three, I absolutely believe it’ll hit that price, and it’ll be worth every penny. Apple may truly become the first trillion dollar company, and that’s one hell of an accomplishment.