Five Obvious Mistakes and How Apple Made them Work

by Chris Seibold Jul 24, 2007

Apple, as every Apple fanboy can attest, does no wrong. The iPod sock? That is pure frickin gold; the laughable looks and questionable utility are there for reasons mister, and if you don’t like them that’s because your taste isn’t sufficiently refined. That stupid iPod boom box thing? Sheer genius: the sound rivals speakers that a serious audiophile* would gladly pay ten times the three hundred dollar cost for. It isn’t that Apple made an overly bulky, semi-useless, mostly unwanted product; it is that the average guy just doesn’t get it. As far as music systems go that you can’t fit in your jailhouse billfold, the iPiece of crap is the best option for music KNOWN TO MAN!

Which is great, as the fanboys are entitled to their opinions, overly convoluted logic, and mindless devotion to all things i. The rest of the world, the 99.9% that doesn’t spend every waking moment apologizing for Apple, doesn’t care at all. If Apple produces a worthwhile product the interest is there, and if not they’ll move on to a court date for Paris Hilton (due to stellar ratings the tentative dates are 10/02/07, 12/1/07, and 4/3/08 by the way). So the hype isn’t enough to propel Apple to success, and there has to be some substance to the offerings from Cupertino’s biggest taxpayer.

So how does Apple stay successful? Apparently the key is taking bad ideas and making them work. Thanks for reading! Wait, for this to work we’ll need some examples. What is more example friendly than a list? Wrong, James R. Stoup, Sam’s Club is more “sample” friendly, and I said “example” friendly.

5. Apple Stores

Why it was obviously a bad idea:

When the first Apple store opened, the question wasn’t if the internet was going to replace brick and mortar stores, it was a question of if that would happen Tuesday or possibly Wednesday. There was plenty of evidence. Computer maker Gateway was suffering from the affliction of physical stores like a merchant marine suffers from lack of penicillin after a port call in Thailand. Amazon was already huge and, aside from milk, there didn’t seem to be anything that wasn’t cheaper online. The undoubted shift from bricks to clicks was only the most obvious reason not to open up retail stores, and there are plenty of more boring and mundane reasons to stay away from the local mall. With retail, Apple incurs not only extra cost with every product sold (buying over the internet is much more efficient as far as Apple is concerned), it also stood to piss off Apple’s network of retailers and CompUSA. To top it all off, the logistics of holding stock that people can buy is a terrible burden. Ask, heh, a Gateway store. Any reasonable executive would have looked at the idea and said: F—!

How they managed to pull it off:

For all the easy logistics of being an online-only deal, there are drawbacks. Apple products weren’t displayed in the best possible way at most resellers unless you think that great presentations are defined by thick layers of dust and non-working units. The sales people employed by, say, CompUSA, weren’t indoctrinated into the Apple way of things. And even when actual Apple employees were working at CompUSA they were surrounded by, well, CompUSA.

The success of the brick and mortar has as much to do with the feeling the retail spaces convey as the products they sell. That feeling is crucial and Apple was able to set the scene because they went to great lengths to get the feel of the stores just right. The company hired a Target VP, designed the store in secret, and offered on-site tech support. Toss the fact that there isn’t a $399 bare bones PC to be found in an Apple store (so Apple prices don’t seem so high) and you’ve got a recipe for success.

4. Switch to Intel

Why the move was ridiculously stupid:

From time immemorial, well, since the early nineties at least, the triumvirate of evil for every Mac fan was Microsoft, Dell, and Intel. These three represented every reason why the Mac wasn’t dominant. Microsoft sold an inferior operating system but coupled said systems with cheap computers. Dell powered the computers with Intel chips that ran at much higher speeds than the PowerPC chips powering the Mac. If you weren’t a Mac fan you could be forgiven for thinking a Windows PC was cheaper (Dell), faster (Intel), and better (Windows).

Of course, no Mac fan really believed that. Dells weren’t cheaper when specced similarly. Windows was operating system hell (just how did those millions muddle through?) and Intel chips were overheating power hungry whores that couldn’t match innovations like Altivec. Apple was happy to reinforce at least one of the beliefs and produced a series of ads in an attempt to expose the megahertz myth, ads aimed specifically at Intel.

So, when the question comes up: How about switching to Intel? Most people would laugh at the notion. Not only was there every chance that Apple would seriously disenfranchise the steady base, they had been fed the notion that Intel sucked for decades after all. There was also the risk of looking ridiculously hypocritical, the possibility that users might think that Apple had been delivering subpar performance for years. It’s not as bad as donating a kidney to a complete stranger, but it was still right up there with attempting to clean your ear canal with a Philips screwdriver.

Why it worked:

If you’re doing something like this, the first thing you do is blame someone else. People instinctively understand that some things are beyond your control. When Steve Jobs promised chips running at 3 GHz and then couldn’t deliver the faithful forgave him as they knew the fault was IBM’s.

Since IBM dropped the ball justifying the move was pretty easy for Steve. Stop talking performance, start talking energy savings. For the larger market the move was shrewd to say the least. People stopped seeing the Mac as running off a weird incompatible chip but on standard chips everyone wanted and used.

3. The original iMac

Why the iMac was stupidity on display:

As far as bad decisions go, this one was right up there with running a dog fighting ring when you’re cashing paychecks from sponsors. The first rule of dog fighting? YOU DO NOT TALK ABOUT DOG FIGHTING!

In the age of modular computers, Apple introduced an all-in-one. That’s right, when every maker was shipping a system in multiple boxes when easily upgradeable computers were accepted by the masses, Apple said, “Hey, we’ve got a great idea. Now that everyone is familiar with video cables and audio cards let’s insult their intelligence with an all-in-one computer!” The entire industry, save Apple, thought that the days of an easy to use, all-in-one machine were as gone as the career of Debbie Gibson. 

The belief was well founded in something called logic. Everyone who wanted a computer had a computer. Introducing an all-in-one would be asking users to jettison their entire system and asking them to do it for no particularly good reason; after all, the iMac was no more capable than a regular Mac.

Making success happen:

How did Apple get it right and the rest of the industry get it wrong? In 1998 there was a little thing that was gaining traction known as the internet. Suddenly not everyone who wanted a computer had a computer. Those who just wanted the internet flocked to the iMac, not so much for translucent plastics and USB ports, but because the iMac promised an easy road onto the internet.

The iMac didn’t do anything new but it did what people wanted: get on the net with a minimum of fuss. The fact that every other Mac sold at the time got on the internet with the same amount of fuss is irrelevant. The iMac played off the desire of people to get on the internet easily. Make a computer visually different, pretend it is made for a single function, and congrats, you’re Steve Jobs.

2. The iPod

The iPod a bad idea? Right up there with storing gas-soaked rags and newspapers next to the water heater.

If you were going to build a monument to stupid decisions, it would have an iPod as the focal point. Can you imagine a decision worse than entering an already marginal market with an obscenely expensive option?  On the one hand, you’ve got the fact that a few devices sell to a few geeks every year; on the other hand, you have the fact that if you examine the listening habits of people, you’ll find that 99% of the population needs less than an hour of music at any one time.

Selling the iPod:

Thanks to Apple’s name, people knew that it was an mp3 player done right. Turns out the market wasn’t so marginal, as sales of previous mp3 players would lead a dispassionate observer to believe.  Screw the fact that the iPod relied on FireWire, screw the fact that it was Mac only, people knew it would be easy, thanks to Apple’s reputation. The iPod was easy and it stayed easy when Apple started making Windows compatible iPods.

1. The iPhone

Worst Apple Decision Ever:

If you purposely slam your car into a tree, you damage the tree and the car. If you purposely slam your car into a transformer, you damage the car, the transformer, and leave a bunch of people without electricity. A classic example of where the bad decision has a wider impact than harming only you. The iPhone had every chance of seriously undermining the Apple name and hurting all of Apple’s business rather than just being a plain flop.

And the iPhone seemed destined to be a flop. Apple was going to sell a phone in a tricky market against large and seasoned competitors. Oh, and the phone was going to be unsubsidized and carry a hefty contract.

If anyone ever comes to you with an idea to sell an already established product at a premium that doesn’t do anything that other products don’t do the prudent, in fact the only, rational response, is to punch them right in the mouth for wasting your time.

One can only imagine how the conversation went with AT&T:

SJ: I want to sell an unsubsidized cell phone.
ATT Exec: Wow me Steve, what does it do that our phones don’t do right now?
SJ: It doesn’t suck.
ATT: That’s it?
SJ: Pretty much.

Not exactly a stellar plan for success.

How they got it right:

Sure, the iPhone doesn’t do anything that other phones can’t. The slick gadget is honestly rivaled by a Motorola RAZR if you only look at capabilities. But where everything is hard to do on most phones, everything is easy to do on the iPhone. The contract is easy to understand, mail is easy to send, the internet is easy to browse, and it is very easy to take crappy pictures with the iPhone. It is the ease of use people are paying for, the knowledge that if it comes from Apple users won’t have to scroll through cryptic menus and punch unmarked buttons to get things done.

In the end there is one realization about all these products that stands out. Apple doesn’t sell products so much as they sell a promise. The promise is that Apple will sell you a product that lets you do the most popular things and insulates you from the annoyances. It is a carefully crafted message and one Steve Jobs is fully exploiting.

*Were it left to me, and it unfortunately isn’t, serious audiophiles would be exiled to Greenland. Were they to start arguing about which rocks gave the truest bass when banged together they would be garroted.


  • Why did you delete my posting?

    diablojota had this to say on Jul 24, 2007 Posts: 25
  • WOW! What a horrible and stupid article. I’m not a fan-boy, but I do use Apple products. You have no sense of business acumen. What is worse is that you label these 5 things as stupid, yet you go on to say how Apple pulled it off (though you did forget the integration with iTunes for the iPod, which enhances the actual usability of the iPod). These things were not ‘stupid’ in the eyes of the top management, they saw these things as opportunities where they could do it better. Gateway failed at the retail setup, that’s because they were no different than Dell, HP, IBM, etc. Their prices weren’t cheaper, and there was a lot of competition. Apple, while a hardware and software company, has something that is different and addresses a problem with the WinTel machines. These stores were brilliant because it allows the average person to give these computers a test drive.
    The iMac didn’t sell because of the internet alone. It sold because it actually fit into the decor of people’s homes. It was no longer just another ugly computer. It was easy to setup, very few cables, sleek, and you could buy one that would match in color to your residence.
    The iPhone was a great idea from the start. It addressed the disadvantages of all cellphones these days. They may have a lot of functionality that is really functional at all. They are difficult to sync with your computer, they are clunky, they don’t have a lot of visual appeal (there are a couple), they have a smallish screen that is difficult to read. They addressed the problems of all the other cellphones.

    This is another article that is full of rubbish, and the author definitely shows that he has no sense of seeing opportunities in business. If Apple thought they were stupid, and the world thought it was stupid, they wouldn’t have done it. I guess that’s why you write and are not an executive of some business, or even a business analyst. I could continue to chip away at this article (including some grammatical issues), but I’m not going to get too exhaustive. Write something that’s useful and really is irreverent.

    Oh, and the iPod Hi-fi works not only because of the sound quality, but also in terms of appearance. It is targeted for a different group of individuals, not necessarily audiophiles. It fits well on the bookshelves in offices, in homes, and so on.

    diablojota had this to say on Jul 24, 2007 Posts: 25
  • Since you deleted my first post, I figured I would just repost what I originally wrote. Thanks a lot!

    diablojota had this to say on Jul 24, 2007 Posts: 25
  • Uh, sarcasm?  I found the article entertaining.

    Dave Marsh had this to say on Jul 24, 2007 Posts: 44
  • “Which is great, as the fanboys are entitled to their opinions, overly convoluted logic, and mindless devotion to all things i. The rest of the world, the 99.9% that doesn’t spend every waking moment apologizing for Apple, doesn’t care at all.”

    For proof of this paragraph, please see comment #2.  raspberry

    MojoJojo had this to say on Jul 24, 2007 Posts: 14
  • The Intel/PPC switchover… WAY OFF…

    Intel chips could not compete in shear power of the PPC chips (why the hell do you think mainframes ran/run PPC?) UNTIL the new Core Duo’s/65nm/2gb bus bandwidth running at 667+mhz. The models that gained were the mobiles/micro’s. The models that lost out, the TowerMac/iMac.

    Even today the Power6 will not only run, but blaze past any intel chip on the market, hell any 12 quad core chips on the market… And that’s before overclocking…

    PPC G5 chips were too hot for mobiles, and consumed alot of power.

    Intel cought up, plain and simple. And with the switch to the intel chips Apple put the Mac’s on level playing fields with other development suites, OS’s (not just windows), and got higher clock speeds without sacrificing buswidth and system capacity.

    I wish we had Power6 towers, would be nice to have bandwitdh and cpu throttling. But for most apps, most, the intel chips will work fine. CISC it is, RISC is out…

    If you ever noticed anything running intel/ppc macs side by side intel’s will consume twice the ram, twice as fast… Complex Instruction Set’s loaded into RAM. Leopard on Intel requires 512mb, PPC only 256… CISC Vs. RISC designs.

    Also low level applications such as games can now be ported to the Mac very fast, since they were written for the intel CPU’s (instruction sets again here) than they could have for the PPC.

    So it’s a give and take. Under POWER6 tech, we’d be rolling 5-20x’s faster, but not mobile. IBM produced a spec G5 chip for mobile PC’s and was able to throttle back the G5 to 2.0ghz, maintain a TDP of 44*C, and delvier a 1333 bus speed, that was 2 years ago… Under Intel we won’t see that for 2 more years, 5 Years after IBM displayed it, imagine in 2 years we could have a Power6 rolling 8ghz (they come in 4.16-12+ models) with a 8+gb bandwidth on a 2.6ghz bus. A laptop fast enough to hit a teraflop? Imagine the desktops… Exportation would be monitored again.

    iPhone. I got one, held back for 2 weeks but I got one. I have a growing list of about 19 grips right now, and Apple gets feedback on all of them once a week, hopefully we’ll be heard. But the fact is that it’s the right phone/device for the right time. It’s enough to make the public love it, not enough to make us hate it, but more than what we had before. It’s upgradeable to a point and for the first time I’ve got a phone that can manage more than an address book without taking forever. It’s nice, I wish it was more, integrated more, synced through BT even for to use the data plan on my laptop to send files. But all in all, I can run some aspects of my business through it and I don’t need to have the PB open and on to collect email’s from clients/servers/PC’s being administrated.

    HOWEVER: I see car accidents on the rise from iPhone users…  :>)

    xwiredtva had this to say on Jul 24, 2007 Posts: 172
  • To number 5. The response is not as a fan boy, but rather as the astuteness of the business logic driving Apple’s decisions. If the article was meant to be sarcastic, then I missed it, and for that I apologize.

    diablojota had this to say on Jul 24, 2007 Posts: 25
  • Hilarious! Love the imagined conversation between Steve Jobs and AT&T.

    Neil Anderson had this to say on Jul 24, 2007 Posts: 23
  • diablojota,

    The article was meant to be tongue-in-cheek. Chris’ point seems to be that Apple took what others in the industry considered bad ideas or “done before” and did them right… And consumers rewarded Apple.

    I know you were going for a humorous tone, but you overlooked a couple points (not sure if on purpose or not).

    Gateway store failed because you couldn’t actually BUY anything there. You walked in, configured you machine, and walked out with a slip of paper with a promised ship date.

    This is why the Dell/Gateway model doesn’t work in retail—if you are allowed to configure everything down to the smallest option, there is no way a store can have stock to support the customers.

    Apple understood that even before Jobs came back (with ole Gil in charge) when they chopped their lineup into a more easily understood and simple consumer/pro division. After Jobs came back, it became even simpler - iMac, PowerMac or Powerbook.

    Now Apple has a few more models, but the number is low enough that a typical Apple Store has no problem making sure you walk out with the box you desire.

    As far as Intel goes, well, there were many industry changes from the G3/Pentium II days up to the G5/Core Duo change over. The chip industry is like a dog—it ages 7 times faster than the rest of the world… but I know you knew that but discarded that thought for the sake of the humor.


    vb_baysider had this to say on Jul 24, 2007 Posts: 243
  • Great article, Chris. Great angle. Great to have you back.

    This piece reminds me of Walt Disney. He kept having these great ideas but people kept telling him they wouldn’t work.

    So he speaks to someone else who says, “The next time you have an idea, if everyone says you’re crazy, then do it.” He did. That next crazy idea that would never work was Disneyland. smile

    And to those who missed the tongue-in-cheek, that was the point of this article: Guys like Walt and Steve can turn ideas that others say are crazy, into winners.

    diablojota, we don’t delete comments, but I know sometimes folks have found that the system loses them. Some folks here wouldn’t get a say if we did delete comments! smile

    Chris Howard had this to say on Jul 24, 2007 Posts: 1209
  • Isn’t someone at Apple the largest single shareholder too? Who was that…

    xwiredtva had this to say on Jul 26, 2007 Posts: 172
  • @vb
    What? this doesn’t cover the faults of the Gateway store?
    “To top it all off, the logistics of holding stock that people can buy is a terrible burden. Ask, heh, a Gateway store.”

    Onto a more salient point, there seems to be a notion that you can’t have a ton of options and still have a decent retail store. The idea being that Gateay and Dell can’t hold stock because the products are too configurable. That is the purest nonsense.

    Compare the number of options available for your average toyota. You’ve got color (maybe six choices) you have leather or cloth, V6 or four cylinder or hybrd, tinted windows or clear, stick or automatic, cold weather package or warm weather package etc.

    That doesn’t even scratch the surface when it comes to buying cars. But most people go with what is on the lot, who really wants to wait?

    The Apple store will sell you a highly configurable MAc Pro, but the dell kiosk won’t. The difference lies in logistics, Dell’s model is based on the notion that it is cheaper to build computers after thay are ordered.

    That idea makes a lot of sense. The general trend is that prices go down, what customers think is valuable today will be cheaper tomorrow. And there is a lot more to it than that. Holding stock is expensive, you’ve got to consider oppurtunity cost, capital cost and more. Trust me when I say there is no sweeter moment than whenyou can talk a supplier into supplying you product and then billing you as they are used.

    All the reasons not to hold stock pale in comparison to the reasons to hold stock when you have a brick and mortar store: People want it now!

    Chris Seibold had this to say on Jul 26, 2007 Posts: 354
  • Chris, I like your article and have just registered because I thought it is worth a comment.

    You scratch the surface with some of the issues above but I won’t use words like diaboljota:
    “What a horrible and stupid article.”. Constructive criticism, ha?

    Good you mention that. I am currently considering a purchase - PC or Mac (I am PC owner). I am visiting different stores in the UK from Comet, Currys to Apple.

    I have just sent my complaints to the first two moaning about poor customer service - horrible way of presenting products (turned off computers, monitors, systems you can’t log in to etc.) and staff that can’t be bothered to serve or convince you to buy anything. I am not even talking about any valuable advices.

    Now I go to the Apple Store - nice and bright, I can experience any type of the machine that is there, I can have one-to-one session working on a specific area. Small selection of products and a bit of retro marketing - ‘hello Sir, have a look at this iMac, look in the camera, shot!, your face is on the screen! Cool, ha? ‘

    What Apple did is maximised the opportunities of retail. And I agree with other comments - people don’t want to wait for products. They want to have it now. That is why I don’t buy many things on the Internet - I want to have it now!

    Product management
    We all know what marketing is, right? Not at all!
    Apple know - simplicity!

    Customers don’t know what they want.
    Customers don’t buy products - they buy solutions to their problems.

    I am web developer and I want a computer that will be suitable for me that I will work on for another 3-4 years. So I want to compare Apple offer with some PC one. I am looking for a computer that will have a nice design and will be powerful. I am going to SONY website to see the laptops and what!? Instead of solving my problems they give me a headache - how can I find out which of these 30-40 models is suitable for me? Sometimes there is just a difference of one little detail between models. Even comparing them is so difficult.

    Apple did it simple! Want a laptop, right? Small, portable, powerful enough for a casual user - take a MacBook. Want a nice machine? - buy MBP. Simple!

    Why other people can’t understand that?

    Why in the XXI century I can’t buy a nice all-in-one-non-Apple machine? Why do I need to buy a noisy tower? Apple realised that all-in-one is just comfortable (cables are killing me), easy to carry and it is just the way it should be. Why do you need big monitor, tower, cables etc. to access an Internet?

    And the last thing – USB and firewire usage – they do it great before anybody else thinks about it. had this to say on Jul 27, 2007 Posts: 3
  • Is Apple’s success because it is so good at software and hardware, or because it has branched out into “non-computer” areas that that have finally gotten people to notice their original talents?

    Apple has always been a “success,” it is only the odd comparison to Microsoft that makes others see them as “losing” somehow.

    Steve Consilvio had this to say on Jul 27, 2007 Posts: 47
  • Weird. For some reason I totally missed that last line about Gateway.  %)

    But I guess my other point is that Apple streamlined its product line even before the Apple Store. Anyone remember the Centris 630?  Or was that the Quadra 630? LC? No wait, Performa 630…

    There were 4 different Mac models that were all basically the same machine.

    This is how I feel when I visit the Dell site. It’s like “What the @#$% is the difference between an Superion 333 and an Inferion 666?”

    And it takes you two weeks to figure out one has Bluetooth and the other doesn’t. Just take a moment to browse their “small office” vs “home office” offerings and you’ll be like, “WTF?”

    Seriously… Inspiron, Vostro, Optiplex and Precision. How many different product lines do you really need to supply an office? (servers not included)

    But I digress… Gateway would have probably done better if they had stocked the basic models that 80% of their buying public were ordering. Why make the customer wait for the other 20% that want a BTO box?

    However, I am *still* waiting for the headless iMac (ie - mini without the sh!tty video card). It’s time for Apple to make that “mistake”.

    (sigh - never happen)

    vb_baysider had this to say on Jul 27, 2007 Posts: 243
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