On the second day Steve Jobs came back to lead Apple in 1997, I had a chance to meet with him and ask how he planned to revive and save Apple. Apple was $1 billion in the red and we now know they were about 6-8 weeks from possibly going under. He did not hesitate to tell me he had two key initiatives to bring Apple back to health.
The first thing he told me was he was going to go back and take care of the needs of his core customers. He defined these customers as the creative types who loved the Mac as well as engineers, programmers, publishers, and ad agencies. Indeed, these were the users who put the Mac on the map when it was first released in 1984. Jobs felt that, in the time he had been gone, past Apple CEOs had forgotten about these customers as they tried to expand the Mac’s reach in the marketplace.
The second thing he said he would do would be to focus on industrial design. Even then, Jobs saw something none of us did at the time. He started Apple down a path towards making design a cornerstone of all Apple’s future products.
But it was his first initiative that has been coming back to me a lot these days as have I read multiple stories that suggest Apple has been too slow to upgrade products and be more innovative on the Mac, especially when it comes to meeting the needs of their core customers. Various articles suggest Microsoft, particularly with its Surface tablet PCs and their new desktop Surface Studio is now the leading innovator in developing products for the creative professionals and they are starting to steal Apple’s core customers.
Over Thanksgiving, I was told of a person who had been a major Apple devotee and was a serious creative professional. This person decided to buy a high-end Windows machine, adding key processors and components to it. They said the renderings they were doing took considerably less time than it did on their Mac Pro. Consequently, his entire team bought these new modified Windows machines and sidelined the Mac Pros.
This may be an isolated case. I have also talked to other high-end creative types and, given their significant investments in software and hardware designed around Apple products, I just can’t see them ever jumping over to Windows. However, the fact this one creative pro was able to upgrade a Windows machine to deliver more power for faster rendering of their work is not something Apple can ignore.
The one complaint that seems common is it takes Apple too long to bring out new MacBook Pros and Mac Pros to keep up with the growing needs of the creative professionals. This is not necessarily Apple’s fault. They rely on the processor upgrade cycles Intel has on next generation CPUs and especially ones that would meet Apple’s design and power criteria. But it did take them 14 months to bring out a new MacBook Pro, something that has caused frustration from their creative community of users.
I believe Apple still has the creative community high in their focus. Although, to be honest, the products for this class of users are more like trucks than sedans. When Steve Jobs introduced the iPad in 2010, he said PCs were like trucks, designed for specific uses, but the iPad was more like a car and where the largest growth in users would be. Although I believe Apple will always make Mac Pros, MacBook Pros, and MacBooks (representing around $20 billion of their current revenue), I do think that, over time, they would like to see more and more people transition to an iPad Pro and iOS as it has the best link to their services business, which is a huge growth segment for them.
Regardless of Apple’s long term strategy, I do think Steve Jobs’ goal to keep their core customers happy needs to be top of mind for Apple. I also think they probably do need to be quicker in innovating around the Mac Pro platform as it is clear Microsoft has these same customers on their radar and would love to steal them from Apple if they can. While this market is small, the products for these customers have high margins and is still a very lucrative product line for Apple. I don’t think they want to give up any ground to Microsoft if possible and I do expect them to continue to make the MacBook Pro and Mac Pro the best of class tools for the creative community.