It is extremely rare in the business world to find a corporation that starts a revolution, and then have the very same company lead another revolution, but that is Apple!
Steve Jobs, who runs Apple Computer, successfully knocked the computer world off its high legs, and then shook its foundation when he created, with his associates, the very first personal computer. Yes, there were others before him, but they were nothing in comparison to the Apple. The operating system that Apple uses is still acknowledged to be vastly superior to anything that giant Microsoft has ever come out with.
Jobs did make one mistake however, and this mistake cost him his only opportunity to become the richest man in the world. Several decades ago, Apple had the opportunity to license the operating system to other personal computer manufacturers. Jobs made the mistake of believing that it was ABOUT THE HARDWARE. In reality, it was about the software.
Apple never licensed the software, and Microsoft did, which allowed the inferior Microsoft system to become the industry standard, which it still remains today. Gates became the richest man in the world, while Jobs had to settle for selling Apple personal computers with the software embedded into the hardware.
As an aside, the best investment Jobs ever made, was probably the 10 million he put up to buy half of Pixar films. Disney passed on that $10 million deal, instead choosing to pay $4 billion plus for the same $10 million dollar investment that Jobs made... a few years later.
Jobs' creation of the iPod revolutionized the music industry, which had experienced little to no growth for years, until Apple came along and sold a 100,000,000 iPods that required music and its associated royalty fees. The music industry should give an award ceremony just for Apple.
Then Steve Jobs and Apple Computer, now Apple Inc., did it again. Jobs and company created a cell phone device that shook the hegemony of the entire cell phone industry. The problem they addressed was that the sophisticated cell phones were too difficult to operate. The buttons on the blackberry required that you use a stylus to trigger them. Another cell phone, the Treo was not that much better in terms of operational design features.
What Jobs did for this industry is take it to the next level, and what a level it is. It really shouldn't be called an iPhone. The phone features of this device are probably the least interesting its software features are startling. This is the equivalent of going from silent films to the talking movie era.
Imagine yourself struggling with the Blackberry small buttons or the Sony Treo? Then along came the iPhone. There are practically no buttons on the device. It's got a very large screen, which dominates the front of the device, and it is a touch screen. You operate it by finger alone. It scrolls the various listings almost like a roulette wheel. It slows down, and zeros in on the item you want. As it is slowing down, you have the opportunity to re-engage the scroller. It's almost as if it has artificial intelligence built into it - that's how good the user interface is.
This flicking or scrolling feature also applies to iTunes software and your photo collection, address book, videos, and podcasts. With a 3. 5 inch screen, movies are far superior to previous Apple products, and there's real time e-mail delivery similar to a corporate Blackberry but without the extra fees involved.
Now without the small keys that I have on my Blackberry, you have to touch the screen of the Apple to send messages. It is clearly not as precise as the tactile response of a Blackberry, but the software wildly overcomes that deficit. The Apple software has spelling correction software built into it, so if you hit the wrong key the device corrects it.
Browsing the web with this device is a mind blower due to what is called the "Pinch feature". You can take a Web page that you are looking at, and with your thumb and forefinger pinch the picture wider or narrower, higher or lower. The real beauty here is the simplicity of the entire device.
Most products that are designed by engineers are created with an added level of complexity built into it. It's like a writer that wants to use words that very few people understand. Why do people design like this? It's because they want to impress themselves, and others with their brainpower. What is more interesting is how such designs survive to become marketed products.
The American car market self-destructed when for 20 years, the companies were run by financial / accounting types, not people who LOVED CARS. Apple has clearly developed a corporate culture that puts functional design first, and engineers, and software geeks second. From the PC to the iPod, and the iPhone to the iSlate, we have a history of fabulous, sterling products coming out of this American design factory.
Stay tune for more. Goodbye and Good Luck, Richard Stoyeck.
Richard Stoyeck's background includes being a limited partner at Bear Stearns, Senior VP at Lehman Brothers, Kuhn Loeb, Arthur Andersen, and KPMG. Educated at Pace University, NYU, and Harvard University, today he runs Rockefeller Capital Partners and StocksAtBottom. com. http://www. stocksatbottom. com>Value Investing at StocksAtBottom.com
