Thursday, January 11, 2007


January 11, 2007; WSJ

Unless you were one of the poor reporters who had to yo-yo between Las Vegas and San Francisco this week, you may not have noticed a hidden message in all of the hoopla over the new Apple iPhone.

Apple Computer (make that Apple Inc. now) deliberately counterscheduled its annual MacWorld Expo -- and its important new product announcement -- directly against the Consumer Electronics Show, the world's biggest consumer-electronics convention. Apple was sending a message that not only does it not inhabit the same universe as the rest of the consumer-electronics world (even Microsoft felt obliged to attend CES), but that its announcement would trump anything coming out of Vegas.

And it did. The blogosphere lit up the moment Steve Jobs took the stage. On places like, the usual fights broke out between the eternally moonstruck Macolytes (more cruelly, "Macsturbators") and the increasingly jealous Apple-haters. CNN, as is usual with Apple, turned its news coverage into a day-long iPhone flack. And at Mr. Jobs's old high school, my son's sophomore literature final exam was interrupted by his teacher, who projected on the classroom screen the new iPhone for everyone to see.

This raises the obvious question of why Apple needs to spend millions on advertising -- thus adding to its notoriously high product prices -- when it has cable networks and schoolteachers doing its marketing for free. But even more than that, one has to ask: How did Steve Jobs and Apple get to this point, where the entire tech world waits on their every announcement? And why haven't other, far bigger competitors such as Hewlett-Packard, Dell and Sony, learned from them?

Mr. Jobs is the most paradoxical of creatures. On the one hand, though time and mortality have mellowed him, he remains something of a monster. If, like me, you grew up in the same neighborhood, went to the same school, interviewed him in the early days of Apple, and even wrote a book about him and his company, there will always be things about him that are unforgivable -- cruelties and manipulations (especially to Steve Wozniak), early crimes (illegal telephones, ironically), megalomania, and an unquenchable need to take credit from others (Do you know who led the original Mac team? Invented the iPod? Devised the new iPhone? I didn't think so) -- and that no achievement will ever erase.

Yet there is no denying that Mr. Jobs is a business genius, the greatest marketer of our time, the most charismatic figure in electronics history. And he is the only really interesting person left in high tech, once the liveliest, most maverick corner of the industrial world. Sometimes, he seems like the only guy left in tech who's having fun.

Of course, there are also the products themselves. The iMac, the iPod and the new iPhone are, whatever the flaws, masterpieces of industrial design and enlightened human interfacing. They make competitors' products -- even when they're better machines -- seem plodding and prosaic. So even if Mr. Jobs shamelessly steals the limelight from his subordinates, we have seen, and hope never to see again, what Apple looks like without him.

That's why even tech people who are repelled by Mr. Jobs and his style caught their breaths a few years ago when he was diagnosed with pancreatic cancer, and again a couple weeks ago when he was linked to some shady backdating of Apple stock options. More than one Silicon Valley leader privately muttered that for the sake of high tech and American competitiveness, it might be best if the Feds just forgot all about the matter.

This week, Mr. Jobs showed just what he can do when he's in good health and sitting on a cool new product. There were great products at the CES, but after Tuesday no one noticed. The iPhone, which won't be shipped until June, suffers from a number of classic Apple-under-Jobs weaknesses: not enough memory, probably not enough battery, a comparatively large (though wonderfully thin) case, a touch screen that will infuriate cell phone users and scratch up like the early iPods, and an unpopular distribution partner (Cingular). And the iPhone is stunningly expensive ($500 plus a two-year Cingular commitment).

But who cares? As Mr. Jobs said, the iPhone is going to revolutionize the phone. Not because it offers anything fundamentally new, but because it brilliantly ties together nearly all of the currently disparate portable consumer tech functions into a single exquisite package driven by a powerful and intuitive interface. But that's only part of it. The iPhone will transform the market because unlike other tech mavericks who try to push the envelope, Mr. Jobs can introduce the iPhone, even in a clumsy, overpriced 1.0 version, and trust that the army of several million Apple true believers will rush out and buy.

That is the crucial, often overlooked, key to Apple's continuing success. Other wildcatters have to pray the market recognizes their brilliant new products quickly enough before they go bankrupt. Apple, by comparison, always knows that it will be able to finance versions 2.0, 3.0, etc., on sales to its captive market -- and by then, it will have perfected a definitive product the whole world wants to own. Mr. Jobs recognized the power of communities a generation before the current Web 2.0 crowd and is now its greatest master.

Apple has produced a few clunkers that even its own fanatics won't buy. And Mr. Jobs's obsession with control -- operating system code, distribution, partnerships -- usually cripples the company's competitiveness in the long run. But as long as he can keep pulling new, market-making rabbits out of his hat, even that doesn't matter.

A question remains: Why do none of his competitors adopt Mr. Jobs's business strategy? It's not like there's a shortage of good design engineers and smart code writers. So why do so many tech products these days seem so alien to human nature? Only the game console companies seem to have some of Apple's risk-taking and cleverness. Is it a lack of courage? An unwillingness to trust the creativity of employees? If it's a fear of failure, Apple's immense success (and skyrocketing stock price) ought to teach otherwise.

Whatever the reason, it's not likely to disappear soon. We can't count on an outbreak of cleverness in tech in the near future. So that leaves Mr. Jobs. For all his demons, thank God for him in this age of cookie-cutter CEOs. For a decade now (and for another decade at the beginning of the PC age) he has run the most enthralling and rewarding show in high tech. Let's hope he gives us at least one decade more.

Mr. Malone, a columnist for, is author of "Bill and Dave: How Hewlett and Packard Built the World's Greatest Company," to be published in April.

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