Can Steve Jobs keep walking on Air?

24 Jan 2008

Apple CEO Steve Jobs has twice-created a technological empire but can he possibly sustain this momentum?

Under the watchful eye of CEO Steve Jobs, Apple Inc manages to be an industry powerhouse pulling in annual revenue of US$24.1bn, yet commanding consumer respect and cult status with iconic products like the iPod.

Watching Steve Jobs unveil the new MacBook Air laptop at the Macworld conference last week, I finally understood why. This man manages to be part-cool kid, part-class prefect, a combination that seems to work well for Apple’s market strategy.

As Jobs confidently declares that the latest Apple product or service is immensely superior to anything else on the market, you find yourself wondering how this man manages to keep such a tight rein on his empire.

“Steve Jobs is God at Apple. He can do whatever he wants to. He is the king of Apple and he will say ‘this is where we’re going’ and Apple will go that way,” says Carl Gressum, senior analyst at UK technology trend firm Ovum.

“He decides what different people within the organisation will know and when they will know it so that he can control all the information flow, it is a very secretive organisation.”

The influence and charisma of Steve Jobs is notorious amongst both friends and foe and has helped the company break ground where other technology firms never thought to go.

“Apple decided to go into the phone market and it managed to convince one of the biggest carriers in the US to do revenue share. That is unheard of!” says Gressum.

This is the man who co-founded Apple Computer in 1976 with his friend Steve Wozniak and started the personal computer revolution with the Apple I, followed by the Macintosh.

Even back then clever marketing was a huge part of Apple’s appeal. The Macintosh computer was introduced via a commercial TV spot during the US Superbowl and was never to be played again, a move that made both the media and public hungry for more.

Apple’s success can be traced along with its leadership under Jobs. When he left the company in 1985 after internal disagreement over how the business should be ran, Apple managed to get by but failed to continue its earlier success, producing a confusing number of products and product lines.

When Steve Jobs returned as CEO in 1997, he brought his streamlined vision with him and thus the famous Apple design ethic was born with the multi-coloured all-in-one iMac and the minimalist ads that appealed to pop culture.

While the technology itself is what works, the brand and image is what is on sale and this is all down to how Steve Jobs handles public relations, says Gressum.

“Apple has a very distinct strategy whereby everything is shrouded in secrecy before a product or service launch. It is very good at using the media to build up this hype.

“If you take Microsoft, they will talk to the press about product roadmaps: where they see their products in the market going forward, so there is less excitement around what they do as a consequence.”

Gressum points out that every leader or CEO will have his or her own leadership style, especially those who are very successful but Steve Jobs has built up a culture in Apple that suits his personality.

“This might not go down well in say Microsoft or Sony. It is not something that you can photocopy and will work but other companies can learn a lot from the marketing end,” adds Gressum.

Even those associated with Microsoft are inclined to agree that Jobs’ method is nothing if not charismatic and media-savvy.

“They build suspense, they surprise, they tantalise, they deliver. More precisely, Steve Jobs delivers. “He’s one of the best presenters, best showmen, best product design people around,” said Frank Shaw, head of the Microsoft account at global PR firm Waggener Edstrom Worldwide, on his online journal.

However, Shaw voiced what many people in the industry are thinking: can the Steve Jobs magic hold and will consumers hang on his every word forever?

“The (Macworld) event and news today made me wonder if the Apple PR model of hold and surprise was wearing thin. Steve Jobs is the only one at Apple who really breaks news,” he said.

The problem with the hype built up around each Macworld is the constant need not only to out do the competition but also to trump the previous year’s Macworld announcements.

This year Macworld attendees were left wondering why Jobs failed to wow them as a distinct lack of ‘revolutionary’ products were unveiled.”I think from what we’ve seen so far, the product announcements with Macworld are becoming a little bit more difficult to do each time because as they have grown into new markets and announce new products, the whole announcement cycle becomes more difficult,” observes Gressum.

In previous years Jobs’ claims were impressive: “In 1984 we introduced the Macintosh. It didn’t just change Apple, it changed the whole industry.
“In 2001 we introduced the first iPod, and it didn’t just change the way we all listened to music, it changed the entire music industry,” he said at Macworld 2007 before introducing the iPhone.

This year people were expecting another ‘revolutionary device’ and while Apple is doing exceedingly well with over 120 million iPods sold to date, over 4 billion tunes downloaded from iTunes and the iPhone achieving No. 2 in the smartphone market, the MacBook Air was just another laptop.
It is the world’s thinnest laptop and has new, innovative Intel chip technology inside but Jobs has maybe done too good a job when both critics and fans alike seem disappointed.

“The MacBook Air wasn’t a game-changing product. Apple is already in the notebook market. It is important in one way though: it shows Apple’s innovation in making products even though it may not sell as well as a lot of people are hoping. It is easier to sway consumers with physical products than with services,” Gressum observes.

So while this year’s outcome from Macworld may not break sales records like its predecessors, it is part of what is perceived as Steve Jobs’ calculated approach to the market: it is a declaration of his confidence in the strength of the Apple brand.

“The MacBook Air will not be another iPod or iPhone. It is more of a statement to the market of the sign of appeal than expectations of becoming a mainstream product”, Gressum concludes.

Has the iPhone for Ireland been forgotten in the iHype?

While Macworld 2008 brought extra features to the iPhone including sat-nav in association with Google, Ireland has been left alongside many other countries wondering when the iPhone will ever come to its shores.

It has been over 200 days since the release of the Apple handset and although it has a 19.29pc smartphone market share, outside the US, only consumers in Germany, France and the UK have been able to use one.

Further excitement was generated last week when Steve Jobs unveiled the new movie rental format for iTunes. Yet again, Ireland will not benefit as it is still to get any additional download features save for music videos and a few Pixar animated shorts.

This, it is thought, is due to the level of control Jobs exerts over Apple, its contracts and especially its content rights negotiations in different territories.

“Bear in mind all these contracts are negotiated by and large by Steve Jobs and he has only 24 hours in his days to negotiate all this,” says Carl Gressum of UK technology trend firm Ovum

This control, Gressum feels, has led to Apple losing out, temporarily at least, on an iPhone contract with China Mobile and thus access to the Chinese market with about 340m mobile phone users.

“Other vendors are more flexible, they don’t need their CEO to negotiate every contract.

“If he wants to do content and contracts he will have to make his choice as to what he will prioritise.” says Gressum.

By Marie Boran