Siliconrepublic.com editor John Kennedy says the story of Apple and its subsidiary in Cork pretty much tells the story of the technology industry in its entirety. It’s also a good signpost to the future of tech.
Last Friday, Apple celebrated its 35th anniversary from the time that three unlikely lads – Steve Jobs, Steve Wozniak and Ronald Wayne – made their own computer after meeting at a computer club. They took the parts of an old typewriter and bought some bits and bobs from a local electronics store and built the first Apple computer, the Apple I.
Today, Apple has almost 50,000 employees and is worth US$200bn.
The company’s products go beyond personal computers like the Mac and now embrace tablet computers like the iPad, a rich tapestry of software, smartphones like the iPhone and media player devices. Every time the company unveils a new product, the entire computing industry skips in an endeavour to march in step.
Apple and U2 – have they found what they’re looking for?
The story of Apple, a Silicon Valley legend, has interesting parallels with Ireland over the last 35 years and our march to become Europe’s leading location for technology, with eight out of 10 of the world’s biggest computing giants located here, not to mention internet stalwarts like Google, Amazon.com, Facebook and recently, LinkedIn.
You see, in 1976, when Wozniak and Jobs (Wayne left after two weeks) were running around building their first computer and bootstrapping by working at HP and Xerox, in Dublin the four members of rock band U2 were also beginning; they were still in school in North Dublin operating under the name ‘Feedback.’
Zoom forward about to 1981 and the arrival of Apple in Cork to manufacture computers. It was one of Ireland’s earliest IT industry inward-investment stories alongside then-stalwarts Digital Equipment Corporation, Atari and Wang. This was arguably one of U2’s most productive eras as they produced the watershed albums Boy, October and War.
When Apple arrived in Cork, the company was on the verge of winning the race to bring out the first personal computer with a GUI (graphical user interface) called the Lisa to the market. Around this time and despite Jobs instigating the Lisa project in 1978, Jobs was pushed off the Lisa team and internally in Apple there was conflict between Lisa’s ‘corporate shirts’ and Jobs’ Macintosh ‘pirates.’ In 1984, Jobs launched the Macintosh, bolstered by the famous ‘1984’ Super Bowl ad directed by Ridley Scott.
Former workers at the Apple plant in Cork around this time remember Jobs’ visits to the plant and how he’d stop people at any point and God forgive you if you didn’t have the answer to his questions on output, engineering, logistics, etc. He was razor focused.
Apple’s decline and rebirth
Unfortunately for Jobs at the time, the power struggles between corporate and his team of innovators were reaching fever pitch. In 1985, Jobs resigned from Apple and founded NeXT Computer.
In the years that followed, Apple witnessed the rise and rise of Microsoft’s Windows operating system, failed to defeat it in a lawsuit and by 1993, the company’s array of product lines, including lines like the Peforma and Newton, weren’t achieving the desired market effect. Various attempts at reinvention including replacing John Sculley with Michael Spindler and subsequently Gil Amelio had failed.
It was around this time I got my first visit to Apple’s manufacturing plant in Cork. Nestled somewhere between massive tracts of housing estates somewhere up on a hill, I was brought on a tour of the manufacturing facilities and saw that local R&D teams were working on products like the industry’s first TV tuner for computers. Long lines of grey Apple notebooks were being boxed by enthusiastic young workers.
You could argue that by 1997 Apple had reached its lowest ebb, compounded by arch rival Microsoft investing US$150m in the company – considered an essential lifeline. By 1999, the Cork plant had also reached its lowest point, losing 450 staff as some manufacturing moved to Wales.
But somewhere in the darkness, change occurred. Jobs returned to Apple in 1997 and the company showed hints of a strategy that would define the company to this day. A young designer called John Ive led the design team behind a curious product called the iMac, an all-in-one computer that, unlike the rest of computers at the time, was not beige. Instead, it had an intriguing luminescent range of colours and some 800,000 computers were sold in first five months.
Following on from the iMac, Apple began innovating with clever multimedia software like Final Cut Pro and iMovie. The Mac OS X was introduced in 2001, and the same year Jobs correctly guessed the intersection of broadband, e-commerce and personal media and the iPod and iTunes were born.
The shape of Apple in the ‘post-PC world’
The recent history of Apple has largely been defined by this course of events. A pattern was created where Apple would not only break the mould of computing but change the shape and design of products as we know them. Each year with precision, Apple has continued to shape the market with a combination of updates on tried and trusted computing families but at the same time adding a flourish with new shapes, forms and concepts.
Following on from the iPod we saw the arrival of the iPhone, which has single-handedly reinvented the mobile device industry, though few rivals would thank Apple for this. We have seen the onset of new models of notebooks, like the MacBook Air, and the last two years the onset of the iPad tablet computer has reinvigorated the computer industry, though few rivals would thank Jobs et al for this, either.
While the personal computer has defined Apple for much of the last 35 years, it is interesting to hear Jobs talk about a ‘post-PC’ world.
For Apple’s operation in Cork, which began as a manufacturing operation, it has evolved to become a post-PC world player. Its 2,000-plus workers today are engaged in high-end strategic work, with engineers engaged in managing the global supply and manufacturing chain from the Far East to arrival at the Apple Stores in Paris, New York and London. The operation also has executives engaged in areas like intellectual property, finance and e-commerce. Both Apple and Cork have benefited strongly from their relationship and Apple’s chief information officer in Silicon Valley is Irishman Niall O’Connor.
So in many ways, the story of Apple in Cork mirrors the story of Apple and the computing industry here in general. As we enter Jobs’ ‘post-PC world’, routes to the survival of the overall technology industry could easily be informed by the steps Apple takes to transform and grow.
As a US$200bn business, that task gets harder. So far this year, Apple has sold 15m iPad computers and this growth can’t be easy to sustain no matter how much the products are desired. How long can the numbers keep going up? In addition, Jobs in recent months has had to take sick leave and while he still retains the CEO role, he won’t be there forever. So the issue of succession is large in the minds of shareholders.
The next 35 years of Apple
So what will happen the next 35 years at Apple? Crystal balls don’t work but here are a few areas in which Apple could flourish:
· Cloud computing and social media – So far, some 10bn tracks have been downloaded from the iTunes store and Apple last year introduced a social media feature called Ping. The next evolution for Apple will no doubt be streaming and providing people with trusted storage in the cloud for their music, apps and personal stuff, like videos and photographs.
· Hardware wise, Apple can go in any number of directions with its iPhone smartphone family, and a number of devices have been mooted, such as an iPhone Nano as well as the expected iPhone 5. This is a rich niche for Apple which continues to succeed as it maintains a proprietary stance over its hardware and software in the face of competition from Google’s Android OS.
· Computing – Despite Jobs’ talk of the post-PC world, expect personal computers to feature for some time yet in Apple’s future. In the fourth quarter of 2010, Apple shipped an estimated 1m MacBook Air computers, by far the most successful Mac product launch ever. But in terms of tablet computers, there are rumours of an iPad 3 coming out later this year that will be slimmer and possibly have a smaller, 7-inch screen. These are just rumours. The iPad is an important franchise for Apple and will be for the rest of this decade. Do expect the company to evolve new form factors for computers.
· Multimedia – Hints to the new form factors could be guessed at by the interoperability of technologies, such as the Mac TV with HD TVs, iPads, etc. With all of its expertise in terms of display, interoperability and wireless standards, Apple technology could feature strongly in the digital home. I’m not sure Apple would do something as obvious as develop a HD TV that would double as a home hub for computing and the cloud.
But then again, Apple re-invented the smartphone, the tablet computer and the mobile computer. So what next? The iTV, the iCar, the omnipresent iCloud? The best is yet to come.