TechWeb

Jobs's Legacy: 8 Reasons Apple Will Dominate The Decade

Aug 25, 2011 (02:08 PM EDT)

Read the Original Article at http://www.informationweek.com/news/showArticle.jhtml?articleID=231600215


Steve Jobs may have resigned his position as CEO of Apple, but the company that he built and later revived will remain a driving force in the technology industry for at least the next decade.

Jobs leaves Apple with a foundation, vision, and culture that competitors have yet to match. His legacy is both intangible--as a figure who inspires and commands respect, he is without peer--and material--he leaves behind real corporate assets that will continue to drive Apple's success.

Assessing his value to Apple is difficult. He is irreplaceable and yet he has been replaced. He will no longer be CEO but Apple will continue to be guided by the corporate culture that he established.

You can read any number of hagiographic articles on Jobs's transition to get a sense of how he is seen by other business leaders, or you can visit a site like Glassdoor.com and consider how employees rate him compared to his peers--Steve Jobs, 97% approval; Larry Page, 96% approval; Mark Zuckerberg, 91% approval, and Steve Ballmer, 46% approval. But mixed in there is a lot of compassion for the man and his health.

While Jobs' influence on Apple defies measurement, apart from such crude metrics as stock value, his tangible legacy alone suggests that Apple will remain at the pinnacle of the tech industry for the remainder of the decade at least. Here are eight reasons why:

Cash

In July, Apple's cash and securities surpassed $76 billion, more than the cash reserves of the U.S. government at the time. It's enough to win any bidding war with competitors. And yet the company is frugal: While Google has been buying companies like mad in recent years, with mixed results, Apple makes its acquisitions carefully. Apple could have bought Nortel's patents outright, but it split the bill with Microsoft and other companies. Having amassed its war chest during a period of economic turmoil, the company appears to be positioned to keep printing money, with a new iPhone and iPad in the pipeline.

Platform

Apple's Mac OS X and iOS are arguably the best desktop and mobile software platforms at the moment, at least as far as user experience is concerned. iOS remains the most popular in terms of installed base, but Google's Android appears destined to surpass iOS. While Mac OS X hasn't toppled Windows as the desktop leader, Mac sales show growth where the rest of the PC market does not.

With the upcoming launch of iOS 5 and iCloud, and the likely convergence of iOS and Mac OS X next year or the year after, Apple's ecosystem appears well positioned to attract and retain developers. If you plan to develop a tablet app, chances are iOS will be your first choice.

Writing apps using Web technologies will become more popular, but Apple packages the Web as a subset of the computing experience rather than the main event, as Google would have us believe. And while there's an element of truth in Google's pitch for its Chromebooks--"nothing but the Web," without the headaches of traditional computers--that message impugns Microsoft's products more than Apple's. The headaches of yesterday's computers--the burden of software updates, slow start-up times, security problems--don't really exist on a MacBook Air.

Also, Google's bet on the Web depends on an affordable, omnipresent network connection. But mobile data plans are becoming less generous and metered pricing is death to casual computing--when watching videos on social networks can be detected in monthly bills, expect usage to plummet.

Windows 8, with its shift toward the Web, could change things. But Microsoft has failed to deliver in the mobile arena for too long to be given the benefit of the doubt. Apple's platforms at the moment are the place to be.

Chips

Apple bought P.A. Semi in 2008 and has used the company's chip designers to help it create the ARM-based chip that powers the iPad 2. Apple veteran and Be Inc. founder Jean-Louis Gassee has speculated that Apple may move its entire product line onto ARM chips. Whether or not this happens is less important than the fact that it could happen: Because it's a possibility, Apple gains pricing leverage with Intel and has the option to change its hardware to confound competitors, by forcing them to revise their software to keep up with Apple's system changes.

Microsoft is moving in this direction as well, with plans to support Windows 8 on both x86 and ARM silicon. How this transition goes remains to be seen. At the moment, it looks like Apple will be able to best optimize its processors for its products.




Brand

In May, WPP's Millward Brown division rated Apple the world's most valuable brand, worth an estimated $153.3 billion. Apple has been one of the most admired companies for years, and its phenomenally loyal customer base is growing fast. Microsoft's absence in the tablet market had turned many Windows users into Apple fans. And the iPhone has done the same. As former PC heavyweights like HP flee the market, Apple's reputation is likely to only increase its gravitational pull.

Design

To mark the occasion of Jobs's departure as CEO, Google SVP Vic Gundotra recounted a phone call Jobs had made to him in 2008 to show the attention to detail that has become Apple's standard. Gundotra wrote that Jobs had an issue with the design of the Google logo as it appeared on the iPhone.

"I've been looking at the Google logo on the iPhone and I'm not happy with the icon," Jobs said, according to Gundotra. "The second O in Google doesn't have the right yellow gradient. It's just wrong and I'm going to have Greg fix it tomorrow. Is that okay with you?"

Plenty of companies sweat the details. But you'd be hard pressed to find a CEO with that kind of attention to detail and with a record that shows he's right more often than not.

Patents

Apple has over 11,000 patents. That's not a lot by the standards of IBM, which holds over 40,000 active patents worldwide. But its patents are focused and Apple has been using them successfully as a barrier to competition. Google is spending $12.5 billion to acquire some 24,000 pending and granted patents from Motorola Mobility, along with the rest of its business. With allies of convenience in Oracle and Microsoft, Apple is likely to succeed in making Android more expensive and less competitive than it would be were it unencumbered by licensing costs.

Tablets

In the tablet world, there's the iPad and not much else. HP's TouchPad went down in flames. Samsung's Galaxy Tab 10.1 has been blocked in Europe. Motorola's XOOM hasn't been moving particularly well and faces Apple litigation in Germany. IHS iSuppli estimates that Apple's iPad will account for 74% of the tablet market in 2011. Almost half the Fortune 500 companies are testing or deploying the iPad, said Apple CFO Peter Oppenheimer in July.

Retail

Apple's retail stores have been so successful that Microsoft decided it needed to have its own retail chain, despite the past poor performance of retail operations operated by Dell, Gateway (prior to Acer's acquisition), and consumer electronics chains. Apple stores bring new customers into the company's fold, often selling iPads to those who might otherwise have bought a new Windows PC. Apple reported in July that revenue from its retail operations reached $3.5 billion in its fiscal Q3, up from $2.6 billion in the same quarter last year. The company expects to open 40 new stores in fiscal 2011, most of them outside the U.S. Other sellers of consumer electronics just don't compare.

Apple does have its weaknesses: It doesn't yet get social computing, which leaves an opening for the Microsoft-Facebook alliance and Google+. Its advertising platform has not been widely embraced, raising the possibility that Google could beat Apple by making computing more or less free. And its focus on keeping people within the Apple ecosystem makes it vulnerable to innovations that promote connection across platforms and devices.

But against these theoretical risks, Apple has proven products that sell and should continue to do so as Steve Jobs takes less active role in management.

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