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Source link: http://archive.mises.org/18212/steve-jobs-making-lives-better-through-marketing/

Steve Jobs: Making Lives Better Through Marketing

August 24, 2011 by

The excellent personal tech columnist Walter Mossberg discusses the marketing genius exhibited by Steve Jobs (who just announced his retirement) throughout his career (see video below).  About Jobs and Steve Wozniak’s introduction of the Apple II, he says,

They popularized the idea of the personal computer.  (…)

But after bringing the personal computer into the mainstream, he changed it all up, and brought out the Mac; didn’t invent the basic technologies in that either.  They were developed at Xerox, but Xerox had no ability to market them.  So he brought out a computer that had a mouse, that didn’t have command lines, that had icons, and drop-down menus, that we actually think nothing of today.  It was ridiculed; it was laughed at.  Now every computer runs that way.  (…)

Then he did the iPod: again, not the first music player, just the first one you would ever want to buy.

Mossberg underlines a crucial step in the production process, and one that is too often dismissed by people who deride “mere” marketing and product development, and extol only the development of the raw technology underlying products.  Consumer goods only starts to make our lives better when final goods entrepreneurs assemble higher order goods so as to produce a package appealing enough to actually get onto our desktops and in our pockets, and demonstrate through achieving profits that the final product is considered more valuable by consumers than the alternate uses of the factors that went into it.

Apple-haters love to point out that Apple is able to charge a premium for the “fashion statement” of using Apple products.  I think the appropriate response to that is a Rothbardian, “so, what?”  There is also a personal technology item called “clothing” which protects us from the elements.  And some purveyors of this “clothing” technology are also able to charge a fashion premium.  Are they to be derided as well?

And yes, society would have been better off if Apple, and everybody else, did not have recourse to intellectual property.  But given the legal framework we have, we are far better off than we otherwise would have been without the restless energy, improving ardor, and anticipative insight of (to use the Misesian term) “promoter-entrepreneurs” like Steve Jobs.

Mossberg concludes:

I would say that Steve Jobs is absolutely, unquestionably, a historical figure who will be studied, not only in business schools, but elsewhere.  I think we have lived through, in the last 30 years, an era like the era at the beginning of the auto industry, or the railroads, or the oil industry, or even earlier parts of the industrial revolution.  It has its outstanding historical figures, and Steve Jobs is not the only one.  But he is one of the two or three leading historical figures of the tech revolution.

Hopefully some day a Misesian scholar will write a modern-day follow-up to Orison Swett Marden’s How They Succeeded, and include a chapter on the extraordinary career of Steve Jobs.

{ 18 comments }

The Peak Oil Poet August 25, 2011 at 1:52 am

“Apple-haters love to point out that Apple is able to charge a premium for the “fashion statement” of using Apple products. I think the appropriate response to that is a Rothbardian, “so, what?” There is also a personal technology item called “clothing” which protects us from the elements. And some purveyors of this “clothing” technology are also able to charge a fashion premium. Are they to be derided as well?”

absolutely

:-)

as Oscar Wilde once said (pardon my poor memory): fashion is ugly, only things made to be useful are beautiful

fashion steals from the inventiveness of those too poor to afford otherwise, puts a hefty price tag on it and uses modern psychology to sell it as a necessity

i have two teenage daughters so i know what i say is truth

the peak oil poet

when all of what we are today
is dim dim distant past
a racial memory mostly myth
known to the shaman caste

http://thepeakoilpoet.blogspot.com/

ps, people hate Apple for the same reasons they hated Microsoft and IBM before them – selling overpriced junk simply because they stole a march on better technology

Tom E. Snyder August 25, 2011 at 7:36 am

“I Am John Galt” by Donald Luskin has a good review of Job’s accomplishments.

London Accountant August 25, 2011 at 8:01 am

I hope he is as good to his retirement as he was to Apple! :) this man’s a genius

J. Murray August 25, 2011 at 8:21 am

The problem with being a fashion statement is consumers eventually see through it. Apple may have popularized the PC, but thy also quickly lost the market share because of the underlying business structure of selling style over substance. We’re already seeing the same pattern emerging with the iPhone and iPad line. Quick out the gate, quickly popularizing a product, and then quickly losing mark share.

What irritated me about Apple is the solid hardware being hindered by the absurd walled garden approach. This approach destroys the largest potential market, B2B, where fancy marketing campaigns that play on emotion don’t work. Apple has almost no presence in the business world, and this greatly hinders economies of scale and consumer level development. And Apple could easily turn this around if they weren’t control freaks. This is the biggest reason why Apple products are overly expensive and lack meaningful support beyond games and a few boutique bandaid setups for restaurant orders. You’re not going to be putting in a custom engineering drafting program that links to your UNIX server. The hoops necessary to jump to get there are too ridiculous when you could just pick up a Samsung Galaxy Tab instead.

This is why Microsoft dominates the desktop and Google is in the process of making Apple as relevant in the mobile world as thy are in the PC world. MS doesn’t care what you do with Windows once you buy it and Google doesn’t care how you use Android.

I don’t hate Apple, but I do resent those who get emotionally attached to products. Marketing is merely the part of the business that says, “Here I am.” If that’s all your product is, you won’t last long.

Danny Sanchez August 25, 2011 at 8:35 am

J Murray, there comes a point where world-beating, long-running, wild success reaches such a level that backseat entrepreneurship like yours becomes somewhat comical.

spiritsplice August 25, 2011 at 10:25 am

In other words, you can’t refute his argument.

JFF August 25, 2011 at 1:02 pm

No, he doesn’t have to because it doesn’t need refutation as it’s obvious he’s off base.

I’m really surprised, J. Murray, because you usually really get it.

1. “We’re already seeing the same pattern emerging with the iPhone and iPad line. Quick out the gate, quickly popularizing a product, and then quickly losing mark[et] share.” I don’t know where you are seeing this, but frankly, this is flat out wrong; both the iPhone and iPad have consistently grown in demand since their introduction, even in the face of competition that cannot keep up, even when offering hugely similar products that they can’t even give away (see below).

2. “Apple has almost no presence in the business world, and this greatly hinders economies of scale and consumer level development.” I’d think the millions of design, architectural, music production, accounting, publishing, management, legal, and scientific research professionals using Apple products would disagree with you.

3. “You’re not going to be putting in a custom engineering drafting program that links to your UNIX server.” J. Murray’s foot, meet J. Murray’s mouth: http://usa.autodesk.com/adsk/servlet/pc/index?id=17326753&siteID=123112

4. “The hoops necessary to jump to get there are too ridiculous when you could just pick up a Samsung Galaxy Tab instead.” Really? Is that why they’re giving them away?
http://www.macrumors.com/2011/08/19/best-buy-offering-free-samsung-galaxy-tab-10-1-with-tv-purchase/

They make products that work, which look good, and which people want to buy. Period, end of story. Your argument, notwithstanding it’s glaring errors, is seriously disjointed. If I didn’t know better, I’d think you were adopting the old “advertising is bad because people can’t make decisions for themselves” Keynesian nonsense.

J. Murray August 29, 2011 at 3:06 pm

1. Consistent is hard to claim at this point. The iPhone has only been around for 4 years and is already become a small player. Here’s the market in 2009:

http://www.blackberrycool.com/2010/02/23/gartner-release-breakdown-of-mobile-os-market-share/

And again in 2011:

http://en.wikipedia.org/wiki/File:Smartphone_share_current.png

In two short years, Android has managed to gobble up 43% of the market while Apple is hovering at about the same place it was two years ago. This is the exact same pattern Apple experienced in the late 1970s and early 1980s before being quickly toppled by the then upstart Microsoft.

2. Who are these millions? I’ve been in numerous company offices from small mom and pop outfits to major corporate offices both as an auditor and as an employee and the only time I saw any Apple products is when someone pulled out an iPhone. Businesses simply DO NOT run on Apple outside niche products like graphic design or other entertainment mediums (Pixar). The Internet is run on Linux and the business world is run on Windows. The MacOS is still hovering around 7%, where it’s been for most of two decades:

http://en.wikipedia.org/wiki/File:Operating_system_usage_share.svg

This is entirely because the business world has not adopted the Apple system for the very reasons I mentioned above. The company is too closed off to people using the product without their approval to ever gain the necessary inroads where necessary to maintain the consumer market.

3. That’s AutoCad, not custom, and that still requires the purchase of a MacOS system, which is not exactly present in engineering companies. Further, that’s NOT an iPad or iPhone product and does NOT show any kind of evidence of talking with other network protocols using different operating systems via that same iPad or iPhone. My foot is still firmly planted on the ground.

4. It was a random example, doesn’t change the fact that the Android OS has managed to triple the market share of the iOS in about a year.

Dagnytg August 26, 2011 at 4:14 pm

Danny,

Your response to J. Murray is surprisingly emotional. Furthermore, you seem to be implying that success is a morally superior position and to criticize it is unethical.

Danny Sanchez August 26, 2011 at 7:08 pm

I have no idea where you’re getting any of that.

Dagnytg August 27, 2011 at 5:11 pm

Danny,

Well…if you need me to explain it…

Words/phrases like world-beating, long-running, wild success, backseat entrepreneurship, and comical are subjective terms (opinions, feelings, beliefs, etc.) and hence, emotional.

A deconstruction of your comment:

…there comes a point where world-beating, long-running, wild success (all these phrases imply superiority)… reaches such a level… (What level would that be? Taken in conjunction with the previous phrases I can only infer the highest-level possible…complete superiority.)

…that backseat entrepreneurship (an unqualified opinion) like yours becomes somewhat comical (ridiculous and not worthy).

Therefore, to summarize your statement:
Apple has reached such a level of superiority that people (J. Murray) are not qualified and thus unworthy to critique it….ergo, success (Apple’s) is a morally superior position and to criticize it is unethical.

Note:
Though I liked the post and your writing in general, I found your comment to J. Murray a bit flippant.

I agree with the premise of your article, which leads one to ask: What does the future hold for Apple? If history is any indicator and you take a Randian view of the situation, then people should consider unloading their shares of Apple stock over the next couple years.

Danny Sanchez August 29, 2011 at 1:11 am

You considering my comment as “flippant” is a subjective judgment. Is it therefore an emotional one, too? Only under your bizarre and useless broadening of the term “emotional”.

Apple has reached such a level of superiority that people (J. Murray) are not qualified and thus unworthy to critique it….ergo, success (Apple’s) is a morally superior position and to criticize it is unethical.

Yet more bizarre and useless broadening of terms. Whether someone is likely to have a better business strategy than someone with a track record like Steve Jobs’ at Apple is not a question of ethics.

Robby August 25, 2011 at 10:22 am

The walled-garden approach is very beneficial to Apple because they know their market. Outfitting a company that has 10 floors of a New York high-rise or a million-square-foot warehouse facility are not things Apple can do with their products. But outfitting an ever-growing number of houses with content-provider devices is something they can do, and they do it very well.

I think connecting the iPod family to wifi networks was the key to Apple really taking off. That gave us streaming abilities that are replicable and more configurable in a non-Apple framework, but not as easy to pull off. Want to make it super-easy to play my iPod Touch or my iPhone on my stereo while I carry it around with me? Buy an (Apple) Airport Express. Is it worth $99 compared to its competition? Probably not, but it has the killer feature of zero set-up when used with an iOS device. The same feature is integrated into iTunes. iPods and iPhones are not the highest-quality devices, not the most configurable devices, not the most flexible. But they work for watching netflix and youtube, listening to music, and making phone calls all from one device that your grandmother can use. Want to do something fancy? Look elsewhere; Apple products are extremely frustrating if you want to do something Steve Jobs doesn’t think you should do. Advanced user? Move on; you’ll hit the garden walls hard and often.

But most people are not advanced users. Most people (even people who, like me, knew DOS line commands in kindergarten and have moved on through to Windows 7 over the years) are completely baffled by applications more advanced than Gmail. I could find a problem in a corrupted part of the XP registry and fix it. Doing fancy things in Windows used to be sort of a hobby. Somewhat masochistically, I enjoyed getting some crazy external equipment and spending a weekend setting it up to behave exactly the way I wanted it to, hacking my way through to get the performance I want.

But, really, why bother? For not that much money, if I will just stay within the confines of the Apple ecosystem, I can get the functions I want without the work. Wanna see iTunes on my TV? $99 for an Apple TV. Done. Wanna see it all shaded purple? Sorry. Buy Windows stuff and figure it out. I can live without the work and take the functionality prepackaged even if it is limited. And I will pay the premium for the different pieces because I’m too busy to keep up the computer hobby like I used to.

And that’s what Apple figured out how to do so well. Streaming everything across a network, playing movies and music from a computer on your home theatre, is nothing new. Geeks could do that at least 15 years ago. But the technology required geeks to make it work. Wire the house with Cat5 or try to rely on powerline networks, whatever, but it wasn’t easy. Lots of troubleshooting was involved, and that part was ongoing. Apple has boiled down all that fancy stuff and packaged it in a way that my wife, who doesn’t care the least bit for doing anything geeky with a computer, thinks it’s cool and wants to have it in the house. Apple is the prepackaged version of _most_ of the functionality the DIYer computer geek can achieve, but made cool so people who simply cannot understand how to do this stuff or who don’t have the time anymore to fool with it can have it. Apple is McDonald’s. It’s not the best you can get, but it’s easy, mindless, and gets the job done, all at a price point where people lap it up as fast as they can turn the products out.

J. Murray August 29, 2011 at 3:26 pm

The problem is, in the computing world, where the B2B market goes, so does the consumer market. This pattern is already emerging as hiring for programmers for the iOS has trickled to the point of being non-existent while hiring for Android applications has exploded. This is mainly because of the explosion in demand for the rapid change-over from Blackberry to Android devices in the business sector. Because of this large uptick in demand for programmers for the Android platform, there will be little incentive to continue gaining skills in the now niche iOS market share (noted in a response above to be around 14% to Android’s current 43%). Since smart phones and other mobile devices are becoming mainstream, the biggest player now is likely going to solidify the market dominant position through pure momentum driven by the business sector.

This is the likely scenario (being a repeat of Apple’s early days of the Macintosh):

With the explosion in Android hiring to replace the aging Blackberry system with the Android platform, programming professionals will spend most time gaining experience on the Android platform. Because of this being the major source of jobs, educational facilities will place more emphasis on the platform as will training programs in development companies. Because of the employment opportunities, non-major platforms like iOS will take a backseat or become otherwise abandoned by the development community with exception of small teams focused on creating ports for highly popular programs. This will lead to a general dearth of software available for the iOS platform, reducing incentives to buy the newest iterations or replace aging devices with another iOS platform.

Additionally, Apple’s history of planned obsolescence that can range from 6 months to 1 year and an almost permanent marketing blitz will burn out the consuming public. One thing Apple has done consistently over the course of the company history is continue the advertising blitz, but people have become so accustomed to seeing Apple advertising in the home computing market that the consuming public has become entirely desensitized to it. The “I’m a Mac and I’m a PC” campaign was cute and got people talking, but it didn’t move iMacs.

This will be further complicated due to Apple’s general distaste of change. The iPhone was a major change for the company, but since the original 2G was released, there’s little that’s apparently different, and with an iPhone 5 on the horizon, all we’re seeing are a few hardware improvements. Major market preferences, like adding a tactile keyboard, have been ignored, mainly because of Apple’s strategy of being the sole provider of hardware. The consumers will see the Android marketplace, already boosted by becoming the B2B preferred platform, getting a host of competitors providing a host of options. Want a phone with an autostereoscopic 3D display? The Evo 4G 3D has it. Want your keyboard? Motorola Droid provides it. We’re seeing all kinds of innovations in the Android market that are leaving Apple as the also-ran, with Apple now playing copy-cat long after someone else put their product on the market. With Apple’s poor economies of scale from being the sole provider, the costs will become the same as in the PC market – same hardware for a 50% premium price and limited software support library.

Apple will eventually find itself back to where it was from around 1982 through 2007, a niche company with a strong, but small, fan base; and a stubborn resistance to business change that keeps it from becoming a long-term, major market player.

And all those convenience factors you just mentioned? My television does that right out of the box. All anyone needs is a wireless dongle (I ran a Cat5 cable because I hate wireless), not an entire suite of Apple products. And those home networking convenience systems are more than likely going to be either on the Windows or Android platform, because all those conveniences will be programmed for corporate lobbies and suites before economies of scale bring them down to the home level, and those corporate offices as you just mentioned aren’t interested in the Apple platform.

jon August 25, 2011 at 8:30 am

“Apple-haters love to point out that Apple is able to charge a premium for the ‘fashion statement’ of using Apple products.”

perhaps they do. but capable people in general would point out — and sadly, i might add — that you can buy retail for half the price and get, quite literally, the exact same hardware. sometimes better hardware.

to address the analogy, this would be akin to buying cheaper clothes that look just like high-fashion name-branded ones and finding out that they fit comfortably and last longer. say seams don’t rip. say they don’t chafe. is this impossible? certainly the ones that do this are to be derided. otherwise, just how free is the market for clothing?

polished linux and *bsd distributions, some with very good community support, are also completely free. apple’s osx is a bsd variant. OS X is at least cheap, but it is not free.

from the point of view of someone who simply googles and browses newegg (or similar) to find a way to get the same things out of their computer but pay less, apple users do appear to host a large contingent of persons with unwarranted-self importance — whether or not they care at all about the wonderful process of bringing a raw technology to retail.

when presented with the options they overlooked, there is a kind that will refuse to understand just what they’ve paid for, and make excuses. and it will come down to “i belong to an elite group” rationalizations, just like the advertisements depict. c’est la vie. invest in AAPL.

i see no reason to define rothbardian based on the coexisting realities of informed and uninformed apple users.

Franklin August 25, 2011 at 8:48 pm

The business model met many successes and sometimes failures. A formidable company, its brand strength indicates its staying power. The devices, the look and feel, the UI have been enormously well received — good for those whose success this is. And whose success is it?
As far as deification of a CEO, any CEO, the pop culture obsession with “rock star” personas is tiresome.
I’m reminded of “I, Pencil”…..

FDominicus August 27, 2011 at 4:40 am

I suggested an Apple computer to my brother because of it’s MAC OS X, but I’m no fan of Jobs. This suggestion was received very well ….

But I do not care about any premium or whatever it’s just Apple is one of the giants in monopolies and patents. Because of this I will never suggest an Apple computer or tool to anyone again. Feel free to flame me on that. I’m glad I know my Linux well enough to feel comfortable, yes I know using FreeBSD or OpenBSD would be better. But you know you can get software for Linux, you hardly can find any software to buy for those BSD Systems. Anyway if it’s about freedom the order is clear:
Apple (Microsoft) -> Linux -> xxxBSD Unices.

Hip Hop November 27, 2011 at 11:45 am

“Apple-haters love to point out that Apple is able to charge a premium for the ‘fashion statement’ of using Apple products.”

Even Apple-haters have to agree that this tactic seems to be working very well for Apple.

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