The world of computer hardware, software, and peripherals is considered to be revolutionary and innovative. In such a world, Steve Jobs and Apple Computers are considered to be more revolutionary and innovative than the rest of the pack. It is to be considered what makes the unique way that Apple Computers operate makes it possible for the success it has achieved. There is no dispute that one of the most important components of a computer system whether it is for personal use or heavy-duty business (or industrial) use, is the operating system commonly referred to as OS. There are many operating systems in use today and the most popular ones include the Microsoft OS, the one used by Apple Macintosh, UNIX and Linux. Each of the developers has its unique way of marketing and licensing its products. For example, the Linux operating system is considered to be open and free and can be used by any user on compatible hardware platforms. In the case of the Microsoft and Apple OS, both are not free and customers have to pay for their use unless it is pirated, which is illegal. A comparison between licensed and unlicensed operating systems is being done here in this section. For the sake of convenience, the licensing system of the Microsoft and Apple OS will be done since each has its distinct way of marketing.
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Microsoft allows licensing of its OS whereas Apple does not do so. In other words any PC (hardware) manufacturer can use the former OS to run on its computers if it is compatible and also based on purchasing a license agreement from Microsoft. On the other hand, Apple does not allow licensing and its operating system can be run only on computers manufactured by Apple. Each of these practices has its advantages and disadvantages. The major difference here is the basic ideology of each company. Microsoft is primarily a software developer whereas Apple is primarily and hardware vendor. Microsoft relies on selling software for profits while the latter relies on selling computers manufactured by it. Due to this philosophy Apple has made it mandatory that Mac PCs will run only on their OS. So, Microsoft’s bottom line will depend on the number of operating systems sold while Apple depends on the number of PCs sold. As long as Apple can maintain its unique USP (unique selling proposition) of its hardware and OS, there will be no significant advantages between the policies of the two companies. Microsoft on the other hand will need to make its OS competitive to the one developed by Apple. To cite another viewpoint assume that one company makes petrol that can be used to run any petrol engine while another company has developed a fuel which can be used only on engines developed by that company. As long as the fuel and engine are highly efficient and competitive, it can continue to sell the fuel and the engine.
But in the long run, the ideology of Microsoft (or the concept of licensing) is bound to succeed. This is because of the advantages of the concept of partnering which is always beneficial in business when compared to being isolated as in the case of not licensing. Apple will have to maintain a competitive and innovative edge in both its hardware and software. In the case of a licensed OS, the developer needs to mainly concentrate on the software, while innovation and development of hardware will be looked after by many independent vendors like Dell, Hewlett Packard, IBM and LG. As long as the software is good, they will be happy to partner with Microsoft. Another advantage that the company has is that once compatibility is committed, it will be difficult and expensive for the PC manufacturers or change operating systems and will be compelled to depend on software upgrades. An innovative thinker like Steve Jobs can maintain the competitive edge for Apple, but eventually he will have to be replaced. Relying on both hardware and software in such a competitive, innovative and revolutionary world will be difficult for the company. This was proven when Jobs was replaced by Sculley. Apple for some time rode on the PC boom but had to call Jobs back to lead the company back to success when competition began to match the ease and uniqueness of its software. It should be noted that even Apple had to switch over to Intel processors to keep up with PC performance and could not rely on the success of its hardware alone. It can be concluded that well-made licensed software can make profits in the long run while the radical and innovative style of Apple can create more news than profits. Licensing in a competitive computer industry makes more business sense.
Leadership vision (and lack of vision) of Steve Jobs and John Sculley
After the initial success of Apple during the late 1970s and early 1980s the company saw a reversal of fortunes and this forced Jobs to look for a replacement for himself and his original partner Steve Wozniak. One of the main reasons for this slump was that the computer giant IBM primarily engaged in the mainframe market began manufacturing personal computers. Apple’s virtual monopoly on the nascent PC market was given a rude shock. Jobs found an ideal replacement in John Sculley, an experienced and solid PepsiCo executive. Jobs was so impressed with Sculley’s capability that he step down as CEO and even considered the latter as his mentor. But the move proved costly for Jobs and also for the company in the long run. The entry of IBM and other companies soon proved to be a boom for the PC industry and Sculley thought that Apple now needed only well planned strategic moves and not innovation. The eventual power struggle caused Jobs to leave the company altogether. He even sold all his shares (except one) in protest. The characters of Jobs and Sculley were radically different. Steve Jobs was an innovator and risk-taker at heart. Sculley on the other hand was more solid, traditional and strategic in thinking. Both types of behavior had their advantages and disadvantages. But when Jobs resigned in 1985 (due to the power struggle) the vision of Sculley was more practical in terms of survival and growth. The PC industry began to boom and strategy was the key point rather than innovation. The developments in technology that came about in the PC microprocessors were also instrumental in this huge demand for computers. Apple’s unique graphical user interface (GUI) and the hardware technology at that time were more than enough for further growth. Sculley had rightly predicted this and the next decade saw a remarkable high growth period for Apple under his guidance. From 1990 to 1993, the company became the market leader in the USA and the world in terms of PC (and accompanying software) sales. Its profits also soared as a result. But things began to change rapidly (and expectedly) in this scenario. Microsoft abandoned its staid old MS-DOS operating system and jumped onto the GUI bandwagon, through its much hyped Windows operating system. Another major challenge to apple was the partnership between Intel and Microsoft. The processing speed of Intel and the GUI of Microsoft soon changed the balance of power. The licensing policy of Microsoft also did not make things easier for Apple. Companies like Dell, Compaq and Hewlett Packard readily adopted the Windows OS developed by Microsoft and soon replaced Apple as a market leader in hardware. Once again innovation became the need of the hour. Sculley’s strategic thinking began to be irrelevant with so much competition in the field. Sculley was replaced by a person called Michael Spindler by the management of Apple. But this move could not reverse the company’s rapidly declining fortunes. In 1998 Apple management had to recall Steve Jobs as interim CEO after purchasing NeXt, a company formed by him after his exit from Apple. Steve again changed the company’s style of functioning by bringing back many of its old policies in retailing and dropping several unprofitable operations of the company. His innovative style also resulted in the development of the iPod which became a revolutionary hit in the entertainment industry
It can be seen that each leader had brought forth benefits and problems for the company. This is also a textbook lesson on how organizations need to change visions and strategies as the situation of the time demands. Steve Jobs and Wozniak were practically the inventors of the PC and rode on its success until such time competitors began to appear. The boom in PC sales that eventually followed IBM’s entry was more conducive to Sculley’s style of functioning. His vision of strategic thinking as opposed to innovation was correct at that time. But things soon changed when the PC market was glutted with manufacturers all hoping to make a profit from the boom. The requirement soon changed back to innovation which Jobs, in his second innings was able to successfully implement and which resulted in the turnaround of fortunes of the company helped create.
Comparison of leadership styles of Steve Jobs and John Sculley
Leadership is inevitable for the success of any organization whether it is formed for profit or charity. It is also true for the development and survival of nations and regions. Since leadership has got a lot to do with the way a person thinks and believes, it is only natural that many styles have developed over the years. It should also be noted that while leadership is inborn in some people, it is a trait that can be learned. Whatever may be the case many theories have been developed about leadership focusing on the styles followed by people who are in a position to lead. In this regard, Steve Jobs and Sculley had distinct leadership styles that were different in vision and strategy. Eight major leadership theories have been accepted by sociologists and psychologists that fairly represent the different styles seen today. They are the great man theory, trait theory, contingency theory, situational theory, behavioral theory, participative theory, management theory, and relationship theory. (Wagner). Out of the above great man and trait theories are quite similar and believe in the factor of inborn and inherited leadership qualities and traits. According to the contingency theory, no fixed style of leadership exists and leaders should adapt their behavior according to the situation at hand. The situational theory also follows this stand to a large extent. Participative theory as the name suggests is a situation where leaders allow a lot of contribution, suggestions and participation from their followers. Management theory is followed by people who reward and punish employees and followers depending upon their performance. It follows the carrot and stick approach and is also called the transactional theory. Relationship theory or the transformational theory is one whereby the leader, apart from leading can transform willing followers into leaders in their own right. The leadership style of Steve Jobs indicates that it follows the great man or trait theory. He could also have a participative style. John Sculley seems to have the characteristics of participative or any other style other than the great man theory. This judgment is not final proof since there is not enough material to say so. Jobs had the vision and the foresight to see the future of computing and electronics while Sculley had the vision to read a particular situation and act according to it. Jobs also had the reputation of being a hard driver of work from his employees. Both had their successes and failures because none of them could adjust their vision to the situation at hand. Jobs could not handle the situation when the PC business took off since his focus was on innovation which was not required at the moment. Sculley could read the situation correctly at that time and could see that a strategy instead of innovation was the need of the hour. But when competition became hot after Microsoft introduced Windows, Steve
Jobs could handle the situation very well and was able to pull his company out of trouble.
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The invention of the iPod and customer satisfaction
The digital music revolution that was to take place due to the invention of the MP3 format was the major reason for the invention of the iPod. The iPod or its predecessor was actually invented by a company called Portal Player who had designed portal digital players for several customers. Even IBM had asked them to design one for them. The idea to build a product that was better and had more features than the existing MP3 players of the time had actually come a person called Tony Fadell, who was independently trying to make one. Apple came to know about the idea and hired Fadell to complete the project and provided him with a team of thirty people to compete the job. Apple (Fadell and his team) worked closely with Portal Player in developing the prototype that the latter had already built. The product had a lot of problems just before its launch. One was that the batteries lasted only about three hours when not playing and even less when it played. Apple persisted with the product and it was finally launched in 2001. The whole project was kept a secret until the project was ready to be launched. The difference between the iPod and other music devices of the time was that Apple also provided the option to download licensed songs also from its iTunes music store, a facility not thought of by anyone else. Hence the iPod became a music industry by itself rather than a music player. Another factor that contributed to the quality and features of the product was the personal involvement of Steve Jobs in the project. Once the prototype came near to being readied for the market, Jobs would involve with the team on a daily basis and continuously give suggestions. One example is that the iPod had the highest volume when it played music amongst all players in the market. This was in partly due to the fact the Job’s hearing was not quite good and he complained that he could not hear the audio output clearly. The design and style the innovative scroll button all contributed to the customer satisfaction the product generated. This was enhanced by the facility to download music, the introduction of a touch pad in the place of the scroll wheel, introduction of video display and the ability to connect to PCs (including that used Windows). There are other features that add to customer satisfaction of the product. Once thought of as only a device to download and listen to music, it is now being used as an educational aid. The Duke University has course materials in the iTunes format that students can purchase and download. The iPod is getting more popular with the introduction and popularity of audio books as well. The shuffle feature of iPod and the launch of the iPod Nano are other factors that contribute to customer satisfaction.
Advantages and benefits to Apple from the iPod
The launch of the iPod gave many advantages and benefits to Apple. It was surprising the reception is the US was quite lukewarm at first. But with the launch of the iTunes which gave customers the facility to add songs to their list changed the scenario. Now a whole new industry is now associated with the iPod bringing in large revenues to the company from this product alone. Apple charges for the songs downloaded and it has resulted in a new business for the company. The concept became such a success that iPod sales exceeded event the expectations of the company. Many innovative uses made the product more popular. As mentioned earlier, the product is now being used in education and also to listen to audio books. Hewlett Packard wanted to be a part of the digital music industry and instead of developing a new product, contracted with Apple to market the iPod, but under HP+iPod brand name. This had resulted in the product now being available in several stores (like Wal-Mart) which had not sold the Apple iPod before. Automobile manufacturers like BMW also had built in interfaces in their sound system that could enable iPod users to plug it in and listen to audio from the car speakers. The success of the iPod is such that revenues from its sale account for nearly half of the company’s total sales in 2006. The iPod touch which can surf the internet on a W-Fi mobile platform is opening up new avenues and businesses for the company. “We view the iPod market as bigger than the market for simple music players,” said Peter Oppenheimer, Apple’s chief financial officer. “We believe one of the iPod’s future directions is to become the first mainstream Wi-Fi mobile platform.” (Hansell, p.1). The company could sell more than 11 million iPods during the third quarter of 2008 which was a 11% growth in sales and 7% growth in revenue when compared to the same quarter of the previous year. If the trend continues, the company can achieve a near record of nearly 44 million iPods for the whole year. On the whole, the introduction of the revolutionary iPod has redefined the digital music industry with many copycats following Apple’s approach. The introduction of the iPhone has revealed an extra dimension to the company’s business. “Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market with its revolutionary iPhone.” (Apple Reports Record Third Quarter Results). It appears that the company has a bright future under the able leadership of Steve Jobs.