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They did. Apple got beaten by the PC. Apple is back because they learned their lessons and picked a market that is more forgiving for closed systems. But they

They did. Apple got beaten by the PC. Apple is back because they learned their lessons and picked a market that is more forgiving for closed systems. But they won't succeed forever. Just now they had to maintain their lead by vertically integrating processors. This has positioned them against the entire chip market where everybody is threatened by Apple. Can Apple outspend everybody else, including the entire Chinese and Korean economy? Sooner or later, the open market will have the better components, just like the PC market. How many more buffers does Apple have to stay in front?

oblio 6y ago
They only need to fail once in a big way, while the others can fail multiple times, because they are many, in short.
- visarga 6y ago
  When you have 2T market cap you can afford more than one big fail.
  - axiolite 6y ago
    Market cap is just public opinion, one bit of negative press can destroy it. To handle failures you need cash on hand, which can't get suddenly erased. Apple has plenty, but not 2T.
microtherion 6y ago
You're articulating an investment thesis that has been fairly popular the last 20 years: That other tech companies are protected by impregnable moats, while Apple is perennially one botched product away from going out of business. But it seems to me that the company is in reality demonstrating far greater resilience and versatility than the cliches would have it. Consider "picked a market": In 2005, I was joking that my job (macOS Engineer) was "writing firmware for iPod docks", because back then Apple was perceived as a Music player manufacturer that built computers as a hobby. Then, for a good decade, everybody decided Apple was a phone manufacturer. The increasing share of iPhone revenue was seen as an alarming sign. The last couple of years, iPhone revenue share decreased slightly, and that was seen as an alarming sign as well... go figure. Now (after having done a casual drive by on the fitness tracker and mid-range watch industry), Macs are getting talked about again. You see this as a desperate lunge for survival. I beg to differ. As a more specific argument, competing against the open market was a disadvantage for Apple when they were low volume, in the PowerPC days. But at this point, I believe they have sufficient volume to maintain custom components. The rest of the industry still has greater volume, but they have to live on lower margins, and are lacking some of the synergies working for Apple, so it's not a given to me that Apple is truly at a disadvantage. However, at the level of semiconductor manufacturing as opposed to design, the considerations are somewhat different (no clear long run advantages for anyone, no clear benefits to vertical integration, open market wins in the end), which is, I think, why Apple is still outsourcing that step.
cturner 6y ago
I feel like you're echoing Clayton Christensen in this comment. It may be possible to escape the inevitable destruction he describes by sustaining a culture that cares about innovation. The thing that woke me up to the Apple way was when I learnt that an early macbook did not need a crossover cable, because its ethernet adapter would auto-negotiate. In design terms, this was low-hanging fruit that was lying around for years. Nobody gets paid for innovations like that, so nobody did it. Until Apple did. Imagine working at a normal company, and trying to implement that. You would be scorned by colleagues and middle managers as someone who does not focus on the bottom line. I doubt that IBM, HP or Dell could execute a transition like M1. Apple maintains some spark that makes it possible. > Can Apple outspend everybody else The best things in engineering come from small teams who care about quality, and who are given room to chase it. No amount of spend or manpower can compensate for a lack of spark.
- xorcist 6y ago
  > in design terms, this was low-hanging fruit that was lying around for years. Nobody gets paid for innovations like that, That is perhaps not the best example. Auto-MDI/X was pretty expected after auto-duplex and auto-speed. It was available in switches for years before it was available in NICs. This wasn't an Apple initiative. They probably sourced the autosensing NIC in your Macbook from some established vendor. What held all three standards back, apart from the additional components and cost, was mainly compatibility issues. Early on, vendor incompatibilities caused autodetection to misfire sometimes, link drops made for a frustrating experience.
  - cturner 6y ago
    Noted, thanks.
Razengan 6y ago
> But they won't succeed forever. Just now they had to maintain their lead by vertically integrating processors. They had been one of the richest companies years before vertically integrating processors. > How many more buffers does Apple have to stay in front? Because they seem to be the only ones who know what to TAKE OUT and when, and yes, as per the meme, the courage to go ahead and fucking do it. Disc drives, legacy ports, headphone jacks, blinking lights, chargers... Every other hurr-durr company seems to think that the only way forward is to keep piling crap on top of crap. Apple shows everyone when it's time to take something out and leave it in the past. And people fucking love it. That's their biggest "buffer". Microsoft & Samsung et al. are the kings of "Me Too", whereas Apple (like Nintendo) is "Not me". There are people that don't give a fuck about specs and numbers, but what something can do and how pleasant it is to use. Until other companies can figure that shit out, Apple is always going to have a lead.
- axiolite 6y ago
  > And people fucking love it. That's their biggest "buffer". Yes, Apple has a strange cult appeal. Their customers are happy even when they are being exploited. > Disc drives, legacy ports, headphone jacks, blinking lights, chargers... Apple shows everyone when it's time to take something out and leave it in the past. There are plenty of manufacturers refusing to throw away headphone jacks, and customers are making buying decisions based on it. It may yet turn out to be a poor decision for Apple. It certainly hasn't resulted in them clawing back any market share from Android. I believe Asus' EeePC was the first massively popular computer to omit a disc drive, not anything from Apple. Ultrabooks were similarly an upmarket response to the popularity of netbooks. Most of the legacy ports Apple has discarded were their own unpopular proprietary ones, adopting USB dug them out of their own hole and put them on an equal footing with PCs. For years Apple was trying to push firewire and avoid USB2, to their customers' detriment, which was an obvious mistake to everyone at the time and proved to be a failure. Apple's record is mixed at best.
  - Razengan 6y ago
    > Most of the legacy ports Apple has discarded were their own unpopular proprietary ones, adopting USB dug them out of their own hole and put them on an equal footing with PCs. Uhh the first iMac was the first computer to ditch all legacy ports and go USB-only, and Apple got flak for that too. https://en.wikipedia.org/wiki/Legacy-free_PC https://en.wikipedia.org/wiki/Legacy-free_PC

oblio 6y ago

They only need to fail once in a big way, while the others can fail multiple times, because they are many, in short.

visarga 6y ago
When you have 2T market cap you can afford more than one big fail.
- axiolite 6y ago
  Market cap is just public opinion, one bit of negative press can destroy it. To handle failures you need cash on hand, which can't get suddenly erased. Apple has plenty, but not 2T.

microtherion 6y ago

You're articulating an investment thesis that has been fairly popular the last 20 years: That other tech companies are protected by impregnable moats, while Apple is perennially one botched product away from going out of business. But it seems to me that the company is in reality demonstrating far greater resilience and versatility than the cliches would have it. Consider "picked a market": In 2005, I was joking that my job (macOS Engineer) was "writing firmware for iPod docks", because back then Apple was perceived as a Music player manufacturer that built computers as a hobby. Then, for a good decade, everybody decided Apple was a phone manufacturer. The increasing share of iPhone revenue was seen as an alarming sign. The last couple of years, iPhone revenue share decreased slightly, and that was seen as an alarming sign as well... go figure. Now (after having done a casual drive by on the fitness tracker and mid-range watch industry), Macs are getting talked about again. You see this as a desperate lunge for survival. I beg to differ. As a more specific argument, competing against the open market was a disadvantage for Apple when they were low volume, in the PowerPC days. But at this point, I believe they have sufficient volume to maintain custom components. The rest of the industry still has greater volume, but they have to live on lower margins, and are lacking some of the synergies working for Apple, so it's not a given to me that Apple is truly at a disadvantage. However, at the level of semiconductor manufacturing as opposed to design, the considerations are somewhat different (no clear long run advantages for anyone, no clear benefits to vertical integration, open market wins in the end), which is, I think, why Apple is still outsourcing that step.

cturner 6y ago

I feel like you're echoing Clayton Christensen in this comment. It may be possible to escape the inevitable destruction he describes by sustaining a culture that cares about innovation. The thing that woke me up to the Apple way was when I learnt that an early macbook did not need a crossover cable, because its ethernet adapter would auto-negotiate. In design terms, this was low-hanging fruit that was lying around for years. Nobody gets paid for innovations like that, so nobody did it. Until Apple did. Imagine working at a normal company, and trying to implement that. You would be scorned by colleagues and middle managers as someone who does not focus on the bottom line. I doubt that IBM, HP or Dell could execute a transition like M1. Apple maintains some spark that makes it possible. > Can Apple outspend everybody else The best things in engineering come from small teams who care about quality, and who are given room to chase it. No amount of spend or manpower can compensate for a lack of spark.

xorcist 6y ago
> in design terms, this was low-hanging fruit that was lying around for years. Nobody gets paid for innovations like that, That is perhaps not the best example. Auto-MDI/X was pretty expected after auto-duplex and auto-speed. It was available in switches for years before it was available in NICs. This wasn't an Apple initiative. They probably sourced the autosensing NIC in your Macbook from some established vendor. What held all three standards back, apart from the additional components and cost, was mainly compatibility issues. Early on, vendor incompatibilities caused autodetection to misfire sometimes, link drops made for a frustrating experience.
- cturner 6y ago
  Noted, thanks.

Razengan 6y ago

> But they won't succeed forever. Just now they had to maintain their lead by vertically integrating processors. They had been one of the richest companies years before vertically integrating processors. > How many more buffers does Apple have to stay in front? Because they seem to be the only ones who know what to TAKE OUT and when, and yes, as per the meme, the courage to go ahead and fucking do it. Disc drives, legacy ports, headphone jacks, blinking lights, chargers... Every other hurr-durr company seems to think that the only way forward is to keep piling crap on top of crap. Apple shows everyone when it's time to take something out and leave it in the past. And people fucking love it. That's their biggest "buffer". Microsoft & Samsung et al. are the kings of "Me Too", whereas Apple (like Nintendo) is "Not me". There are people that don't give a fuck about specs and numbers, but what something can do and how pleasant it is to use. Until other companies can figure that shit out, Apple is always going to have a lead.

axiolite 6y ago
> And people fucking love it. That's their biggest "buffer". Yes, Apple has a strange cult appeal. Their customers are happy even when they are being exploited. > Disc drives, legacy ports, headphone jacks, blinking lights, chargers... Apple shows everyone when it's time to take something out and leave it in the past. There are plenty of manufacturers refusing to throw away headphone jacks, and customers are making buying decisions based on it. It may yet turn out to be a poor decision for Apple. It certainly hasn't resulted in them clawing back any market share from Android. I believe Asus' EeePC was the first massively popular computer to omit a disc drive, not anything from Apple. Ultrabooks were similarly an upmarket response to the popularity of netbooks. Most of the legacy ports Apple has discarded were their own unpopular proprietary ones, adopting USB dug them out of their own hole and put them on an equal footing with PCs. For years Apple was trying to push firewire and avoid USB2, to their customers' detriment, which was an obvious mistake to everyone at the time and proved to be a failure. Apple's record is mixed at best.
- Razengan 6y ago
  > Most of the legacy ports Apple has discarded were their own unpopular proprietary ones, adopting USB dug them out of their own hole and put them on an equal footing with PCs. Uhh the first iMac was the first computer to ditch all legacy ports and go USB-only, and Apple got flak for that too. https://en.wikipedia.org/wiki/Legacy-free_PC https://en.wikipedia.org/wiki/Legacy-free_PC