Hey guys, itās Greg with Apple Explained. So, ever since 2011, when Tim Cook became Apple CEO, every decision heās made has been challenged by the inevitable question of, āwhat would Steve Jobs do?ā And the answer to that by many people online is usually ānot what Tim Cook just did.ā Which sparks an entire thread about how SteveJobās legacy is dead, how Tim Cook cares more about profit than products, or how, quote, āSteve Jobs would probably be spinning in his grave because of what Tim Cook did to the company.ā Comments like these have become so common, and I take issue with every last one of them.
So I wanted to make this Article explain clearly, with hard proof, why Steve Jobs would be absolutely thrilled by where Appleāsat today. Now I want to start by addressing the idea that Tim Cook has raised the price of Apple products higher than ever before, whereas Stevie Jobs was always trying to release the most affordable products possible. And people online frequently cite the $200iPhone 3G or $100 5c as proof that Steve Jobs really cared about making a low-cost iPhone accessible to as many people as possible. Then, theyāll contrast those devices with the iPhone X, released under Tim Cook, which was the first model to feature a base price of $1,000.
But there is a huge flaw in that comparison since it doesnāt account for carrier subsidies. A common business practice at the time that was eventually ended by all carriers. The idea was that a phone carrier, like AT& T, would cover part of the deviceās upfront cost, to make smartphones more affordable. Then, to recoup their losses, the carrier would raise the price of the customerās monthly phone bill, typically by about ten to twenty-five dollars, and lock them into a two-year contract. But the problem was, customers most didna know about that extra monthly charge since it was simply baked-in to the price of their plan. So someone paying $500 for the original iPhone, would have actually paid $980 in total after 24 months of payments to their carrier. That means the iPhone 3G wasnāt actually two hundred dollars, but rather, seven hundred according to Fortune magazine.
That means the average real cost of iPhones was highest under Steve Jobs. And as for critics of Tim Cook claiming heās, quote, āshipping junk at premium prices.ā I would ask you to take a look at the four-hundred-dollar iPhone SE. The most affordable smartphone Apple has ever created first introduced under Tim Cook. And the second generation model released this year, features the same chipset as the $1,000 iPhone 11 Pro. Resulting in many tech journalists pointing out how great of a value the device is.
Something that Iām not sure has ever been saying about any iPhone released under Jobs. Now I want to address the idea that Tim Cookies more of a financial and logistics guy rather than a product visionary like Steve Jobs. And therefore, Cook is pushing Apple in the direction of profit maximization rather than innovative product creation. I think this assumption is a result of a misunderstanding of how both Jobs and Cook operate. Steve Jobs was quoted as saying his ultimate goal for Apple was to become the most valuable company in the world. And while brainstorming product ideas while running Next Computer, he said, āwe need to figure out what products have the potential to generate billions in revenue.ā And when he came back to Apple in 1997, the company was less than ninety days away from bankruptcy. So not prioritizing profit wouldāve definitely meant Apple was doomed. But if you donāt have to take my word for it, because Steve Wozniak, Apple co-founder, said this about Jobs, āSteve was sort like the leader, heās always looking for ways to turn things into a product or a company and make some money.ā But just because Jobs wants to make money from a product, doesnāt mean the quality of that product isnāt important to him. In fact, part of Jobs's philosophy was that truly great products will generate truly great profit. And itās a practice that still exists in the company today. In fact, I think Apple is doing a better job of implementing that philosophy than ever before. So let me break down exactly what criteria apply uses when creating a product.
Right after I break down the benefits of using Squarespace to build your next website. I actually started using Squarespace years ago to create appleexplained.com, and I chose their platform since it has a super easy-to-use drag and drop interface and the most website templates to choose from compared to any other site builder. But what I thought was really cool is that I could add an e-commerce store to my site when I was selling merch a couple of years ago, without starting over from scratch. Plus the payment processor was built in and I could print shipping labels straight from Squarespace. But you can sell more than physical items, itās also possible to sell digital items like eBooks and Music, or services if youārea consultant or fitness coach. It really is an all-in-one platform designed to do almost anything you can imagine. And you can get all this for cheaper than you might think, especially if you use the link squarespace.com/appleexplained since you'll get 10% off your first purchase, you can find that link in the description. Alright so whether Apple is considering creating a product under Steve Jobs or Tim Cook, it has to satisfy three criteria. First, the product must offer value. With the iPod, it was allowing users to fit1,000 songs on a compact portable device.
Which was incredibly convenient during a time when peopleās cars, living rooms, and bedrooms were filled with CDs that had to be organized, manually inserted and removed from cd players, and couldnāt really be carried around. Second, the product has to work better than the competition. For example, the iPodās click wheel and simple user interface made it faster and easier to use compared to other MP3 players. Lastly, the product needs to have long-term profit potential. Meaning Apple can not only ensure a healthy profit margin but also be confident that it can sell millions of units year after year. Both of which were true for the iPod. Under Steve Jobs, Apple managed to achieve a lot of success by sticking with this strategy, they avoided the PDA pitfall, released high selling products with high profit like the original iMac, and eventually achieved an unimaginable amount of success with the iPhone. But itās easy to reminisce over Appleāspast without acknowledging their failures. The Power Mac G4 Cube was a high-priced computer that looked and worked great but didnāt offer users much additional value over the more affordable Power Mac G4. It experienced disappointing sales and was eventually discontinued. The iPod Hi-Fi was a great sounding stereo system that actually cost more than the iPod itself, but it didnāt offer enough value over lower-cost stereos like the iPhone. Which resulted in disappointing sales and later being discontinued. But probably Steve Jobās biggest product failure was one he actually managed to turn into a success story.
The original Mac, released in 1984, actually experienced disappointing sales. Selling only 10,000 units per month by the end of the year, which wasnāt nearly enough to make up for the decline in sales of theApple II, which I'd been the companyās primary source of revenue for almost a decade. Now letās consider the product decisions made under Tim Cook. He led the creation of the Apple Watch and didn't rush the product to market as Samsung did with their Galaxy Gear in 2013. He actually allowed the Apple Watch to be developed properly, and itās now the most popular watch in the world. He led the development of the AirPods, which helped position Apple to become the number one headphone manufacturer in the world, overtaking Sony 2018. And, he helped create the iPhone X, which represented the biggest advancement in the iPhoneās history and sold better than any model before, despite itās $1,000 price. Which, remember was only $20 more than the real cost of the original iPhone back in 2007. And technically hundreds of dollars cheaper if you account for inflation.
But I think the most significant piece of evidence we have that Tim Cook is every bit as concerned about creating great products Steve Jobs, is how he handled the AirPower project. Apple introduced their own wireless charging pad called AirPower with the release of the iPhone X in 2017. The product wasnāt technically finished, but Phil Schiller said Appleās engineers were confident they could get the job done by early 2018. Well, 2018 came and went, and in early 2019Apple released a statement that read, āAfter much effort, weāve concluded AirPower will not achieve our high standards and we have canceled the project.ā Instead of releasing a charging pad with compromised features or unreliable technology, Tim Cook decided to not release anything at all. Costing Apple time and money, and preventing any potential profit from being made by releasing an Apple-branded charging pad. That decision was not made out of a desire to make money with disregard for a productās quality. In fact, it was exactly the opposite.
Cook was okay with losing millions if it meant preventing the release of a substandard product. So the next time you hear someone claim Cookies going against Jobās vision, or that he only cares about shareholders, itās worth considering whether or not that person is accurately assessing his reputation or just blindly jumping on the āI hate Appleā bandwagon since that has always been one of the internetās favorite things to do.
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