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Hey guys, it’s Greg with Apple Explained.
So, ever since 2011, when Tim Cook became Apple’s CEO, every decision he’s made
has been challenged by the inevitable question of, “what would Steve Jobs do?”
And the answer to that by many people online is usually “not what Tim Cook just did.”
Which sparks an entire thread about how Steve Job’s legacy is dead, how Tim Cook cares
more about profit than products, or how, quote, “Steve Jobs would probably be spinning in
his grave because of what Tim Cook did to the company.”
Comments like these have become so common, and I take issue with every last one of them.
So I wanted to make this video to explain clearly, with hard proof, why Steve Jobs would
be absolutely thrilled by where Apple’s at 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 Steve Jobs was always trying to release the
most affordable products possible.
And people online frequently cite the $200 iPhone 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, they’ll 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 doesn’t 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 device’s upfront
cost, in order to make smartphones more affordable.
Then, to recoup their losses, the carrier would raise the price of the customer’s
monthly phone bill, typically by about ten to twenty-five dollars, and lock them in to
a two year contract.
But the problem was, customers most didn’t know about that extra monthly charge, since
it was simply baked-in to their price of their plan.
So someone paying $500 for the original iPhone, would have actually payed $980 in total after
24 months of payments to their carrier.
That means the iPhone 3G wasn’t 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 he’s, quote, “shipping junk at premium prices.”
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 I’m not sure has ever been said about any iPhone released under Jobs.
Now I want to address the idea that Tim Cook is 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 misunderstanding 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, “we need
to figure out what products have the potential to generate billions in revenue.”
And when he came back to Apple in 1997, the company was less than ninety days away from
bankruptcy.
So not prioritizing profit would’ve definitely meant Apple was doomed.
But if you don’t have take my word for it, because Steve Wozniak, Apple co-founder, said
this about Jobs, “Steve was sort’ve like the leader, he’s always looking for ways
to turn things into a product or a company and make some money.”
But just because Jobs wants to make money from a product, doesn’t mean the quality
of that product isn’t important to him.
In fact, part of Jobs philosophy was that truly great products will generate truly great
profit.
And it’s 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 Apple uses when creating a product.
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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 fit 1,000 songs on a compact portable device.
Which was incredibly convenient during a time when people’s cars, living rooms, and bedrooms
were filled with CDs that had to be organized, manually inserted and removed from cd players,
and couldn’t really be carried around.
Second, the product has to work better than the competition.
For example, the iPod’s 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
they 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 it’s easy to reminisce over Apple’s past without acknowledging their failures.
The Power Mac G4 Cube was a high-priced computer that looked and worked great, but didn’t
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 didn’t offer enough value over lower cost stereos like the iHome.
Which resulted in disappointing sales and later being discontinued.
But probably Steve Job’s 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 wasn’t nearly enough
to make up for the decline in sales of the Apple II, which’d been the company’s primary
source of revenue for almost a decade.
Now let’s consider the product decisions made under Tim Cook.
He led the creation of the Apple Watch, and didn’t rush the product to market like Samsung
did with their Galaxy Gear in 2013.
He actually allowed the Apple Watch to be developed properly, and it’s now the most
popular watch in the world.
He led development of the AirPods, which helped position Apple to become the number one headphone
manufacturer in the world, overtaking Sony in 2018.
And, he helped create the iPhone X, which represented the biggest advancement in the
iPhone’s history and sold better than any model before, despite it’s $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 as 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 wasn’t technically finished, but Phil Schiller said Apple’s engineers
were confident they could get the job done by early 2018.
Well, 2018 came and went, and in early 2019 Apple released a statement that read, “After
much effort, we’ve concluded AirPower will not achieve our high standards and we have
cancelled the project.”
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 to a product’s
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 Cook is going against Job’s vision, or that he
only cares about shareholders, it’s worth considering whether or not that person is
accurately assessing his reputation, or just blindly jumping on the “I hate Apple”
bandwagon, since that has always been one of the internet’s favorite things to do.
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