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Becoming Steve Jobs: The Evolution of a Reckless Upstart Into a Visionary Leader by Brent Schlender, Rick Tetzeli
Albert Einstein, Apple II, Apple's 1984 Super Bowl advert, Bill Gates: Altair 8800, Bob Noyce, Byte Shop, computer age, corporate governance, El Camino Real, Isaac Newton, John Markoff, Jony Ive, Marc Andreessen, market design, McMansion, Menlo Park, Paul Terrell, popular electronics, QWERTY keyboard, Ronald Reagan, Sand Hill Road, side project, Silicon Valley, Silicon Valley startup, skunkworks, Steve Ballmer, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, Tim Cook: Apple, Wall-E, Watson beat the top human players on Jeopardy!, Whole Earth Catalog
Anderson still keeps two mementos from his retirement in his office at venture capital firm Elevation Partners: a plaque from Steve calling him “The World’s Greatest CFO” and a commissioned caricature portrait signed by all his closest coworkers, including Steve. Jon Rubinstein and Avie Tevanian were the next members of the “Save Apple” team to depart. Ruby and Avie had been a buddy act of sorts, managing the hardware and software sides of Apple’s whole widget. Says Ruby, “There’s as much of the turnaround team’s DNA in Apple as there is of Steve’s, and you can still see it today.” They had been involved in every key decision at Apple since 1997. And before they left they helped pull off a move that they’d been talking about with Steve and with Tim Cook for years—switching the microprocessors that powered every Apple personal computer from the PowerPC chip to one made by Intel. The primary buyers of the PowerPC chip were IBM and Apple. This was a customer base that paled next to Intel’s enormous market for Windows PCs and servers—millions of units a year for the PowerPC versus hundreds and hundreds of millions for Intel.
He just sat there and had been talking to her for a half an hour. He didn’t talk to anybody else.” THE LAST MEMORIAL service occurred at the Apple campus in Cupertino, on October 20. Nearly ten thousand people gathered on the lawn within the ellipse formed by the campus’s main buildings. Every Apple retail outlet around the globe had been closed for the occasion, with the store employees gathered to watch video of the event streamed live to them over Apple’s virtual network. Tim Cook was the first speaker. Coldplay and Norah Jones, whose music had been featured in Apple television advertisements, played short sets for the crowd. But two speakers provided the highlights: Jony Ive and Bill Campbell, the Apple board member who had been a close adviser of Steve for many, many years. “Steve changed,” said Campbell. “Yes, he had been charismatic and passionate and brilliant.
To avoid the litigation that would naturally arise from Apple abrogating the contracts, the company had to pay the clonemakers to disappear quietly. The most successful of these was Power Computing, which had commandeered a 10 percent share of the market for MacOS-compatible computers. Apple paid $110 million in cash and stock to acquire the company and hire some of its engineers. Out went the inventory. Tim Cook became a new member of the team in March 1998 when he was hired away from Compaq—where he had been called “the Attila the Hun of inventory”—to be Apple’s chief of operations. Cook was a wiry bird of a southerner, thin and bookish-looking despite his athleticism—he biked and ran long distances regularly. Cook spoke quietly, with a soft Alabama drawl, but he may have been the toughest executive at Apple. Cook’s work drew no public attention, but it was crucial to trimming the company.
Dogfight: How Apple and Google Went to War and Started a Revolution by Fred Vogelstein
Apple II, cloud computing, commoditize, disintermediation, don't be evil, Dynabook, Firefox, Google Chrome, Google Glasses, Googley, John Markoff, Jony Ive, Marc Andreessen, Mark Zuckerberg, Peter Thiel, pre–internet, Silicon Valley, Silicon Valley startup, Skype, software patent, spectrum auction, Steve Ballmer, Steve Jobs, Steve Wozniak, Steven Levy, Tim Cook: Apple, web application, zero-sum game
Android’s share of the mobile phone and tablet markets: “Android Captures Record 80 Percent Share of Global Smartphone Shipments in Q2 2013,” Strategy Analytics press release, 8/1/2013; “Small Tablets Drive Big Share Gains for Android,” Canalys press release, 8/1/2013. Apple was also taking heat: Charles Duhigg and Keith Bradsher, “How the US Lost Out on iPhone Work,” New York Times, 1/21/2012; Duhigg and Bradsher, “In China, Human Costs Are Built into an iPad,” New York Times, 1/25/2012; Mark Gurman, “Tim Cook Responds to Claims of Factory Worker Mistreatment: ‘We Care About Every Worker in Our Supply Chain,’” 9to5mac.com, 1/26/2012; “Here’s Apple CEO Tim Cook’s Apology Letter in China” (Digits blog), Wall Street Journal, 4/1/2013. But perhaps the most notable example: Jessica Lessin, “An Apple Exit over Maps,” Wall Street Journal, 10/29/2012; Liz Gannes, “Google Maps for iPhone Had 10 Million Downloads in 48 Hours,” AllThingsD.com, 12/17/2012. Apple’s Tim Cook knows all the challenges: Ina Fried, “Apple’s Tim Cook: The Full D11 Interview,” Tim Cook interviewed by Walt Mossberg and Kara Swisher (video), AllThingsD.com, 5/29/2013, available at www.allthingsd.com/20130529/apples-tim-cook-the-full-d11-interview-video.
Indeed, the best phone ads of 2012 and 2013 came from Samsung, Google’s biggest Android phone maker. After Apple unveiled the iPhone 5, Samsung pounced with a barrage of TV spots that amusingly depicted iPhone users as misguided elitists waiting in line for a phone that was inferior in every way to the Galaxy S III. Apple was also taking heat for the way it was making its phones. The New York Times, in a handful of long articles about the “iEconomy,” presented evidence that Apple was making its iPhones and iPads in Asian sweatshops, forcing CEO Tim Cook to acknowledge Apple could do more to make its contractors provide safer workplaces. A year later he was apologizing to Chinese customers for Apple’s unresponsiveness to customer service and technical support issues. But perhaps the most notable example of Jobs’s absence was the public relations disaster surrounding Apple’s new mapping application.
What wasn’t symbolic were the scores of angry investors left in the wake of Apple’s plunging stock price. For four years Apple shares had been some of the best-performing of all time, rising nearly tenfold from about $80 in 2008. But investors who bought Apple shares in the fall of 2012—believing, as many did, that its stock was headed to $1,000 a share—watched their investment lose 40 percent of its value while the rest of the stock market was up around 15 percent. Jobs never discussed Apple’s stock price with investors. He rarely even met with them. But by early 2013 the shareholders refused to be ignored, forcing CEO Tim Cook to pledge more than $100 billion in dividends and stock buybacks. Indeed, when Page made his remarks, the innovation gap between Apple and Google for dominance of the mobile Internet looked downright stark.
Jony Ive: The Genius Behind Apple's Greatest Products by Leander Kahney
Apple II, banking crisis, British Empire, Chuck Templeton: OpenTable, Computer Numeric Control, Dynabook, global supply chain, interchangeable parts, John Markoff, Jony Ive, race to the bottom, RFID, side project, Silicon Valley, Steve Ballmer, Steve Jobs, Steve Wozniak, Steven Levy, the built environment, thinkpad, Tim Cook: Apple
Larry Elliott, “Better Design Requires Better Product,” http://www.guardian.co.uk/business/2005/nov/21/politics.economicpolicy, November 20, 2005. 22. Ibid. 23. Jonny Evans, “Apple Design Chief Jonathan Ive Collects CBE,”Macworld, http://www.macworld.co.uk/mac/news/?newsid=16510, November 17, 2006. 24. Marcus Fairs, ICON, http://www.iconeye.com/read-previous-issues/icon-004-|-july/august-2003/jonathan-ive-|-icon-004-|-july/august-2003, July /August 2003. 25. Dick Powell, “At the Core of Apple,” Innovate, issue 6, Summer 2009, http://www.innovation.rca.ac.uk/cms/files/Innovate6.pdf 26. Phil Schiller, Apple v. Samsung trial testimony. 27. Isaacson, Steve Jobs, Kindle Edition. 28. Apple Press info, “Tim Cook Named COO of Apple,” http://www.apple.com/pr/library/2005/10/14Tim-Cook-Named-COO-of-Apple.html, October 14, 2005. 29. Interview with Jon Rubinstein, October 2012 30.
Interview with Phil Gray, January 2013. 10. Apple WWDC 2010—iPhone 4 Introduction, 2010, video, http://www.youtube.com/watch?v=z__jxoczNWc. 11. Apple Press info, “Apple Announces Changes to Increase Collaboration Across Hardware, Software & Services,” http://www.apple.com/pr/library/2012/10/29Apple-Announces-Changes-to-Increase-Collaboration-Across-Hardware-Software-Services.html, October 29, 2012. 12. Mark Gurman, “Tim Cook Emails Employees, Thanks Scott Forstall, Says Bob Mansfield to Stay On for Two Years,” http://9to5mac.com/2012/10/29/tim-cook-emails-employees-thanks-scott-forstall-says-bob-mansfield-to-stay-on-for-two-years/, October 29, 2012. 13. Nick Wingfield and Nick Bilton, “Apple Shake-Up Could Lead to Design Shift,” New York Times, http://www.nytimes.com/2012/11/01/technology/apple-shake-up-could-mean-end-to-real-world-images-in-software.html, October 31, 2012. 14.
Shane Richmond, “Jonathan Ive Interview: Simplicity Isn’t Simple,” Telegraph, http://www.telegraph.co.uk/technology/apple/9283706/Jonathan-Ive-interview-simplicity-isnt-simple.html, May 23, 2012. 15. Apple 2013 Worldwide Developers Conference, keynote video: http://www.youtube.com/watch?v=qzUH9PJA1Ro, June 10, 2013. 16. Interview with Sally Grisedale, February 2013. 17. Interview with Larry Barbera, June 2013. 18. Alex Schleifer, “The Age of the User Interface,” http://saydaily.com/2013/02/design-really-is-everything-now.html, February 15, 2013. 19. Josh Tyrangiel, “Tim Cook’s Freshman Year: The Apple CEO Speaks,” Bloomberg Businessweek, http://www.businessweek.com/articles/2012-12-06/tim-cooks-freshman-year-the-apple-ceo-speaks, December 6, 2012. 20. Isaacson, Steve Jobs, Kindle edition. 21. Ibid. 22.
The One Device: The Secret History of the iPhone by Brian Merchant
Airbnb, Apple II, Apple's 1984 Super Bowl advert, citizen journalism, Claude Shannon: information theory, computer vision, conceptual framework, Douglas Engelbart, Dynabook, Edward Snowden, Elon Musk, Ford paid five dollars a day, Frank Gehry, global supply chain, Google Earth, Google Hangouts, Internet of things, Jacquard loom, Jacquard loom, John Gruber, John Markoff, Jony Ive, Lyft, M-Pesa, more computing power than Apollo, Mother of all demos, natural language processing, new economy, New Journalism, Norbert Wiener, offshore financial centre, oil shock, pattern recognition, peak oil, pirate software, profit motive, QWERTY keyboard, ride hailing / ride sharing, rolodex, Silicon Valley, Silicon Valley startup, skunkworks, Skype, Snapchat, special economic zone, speech recognition, stealth mode startup, Stephen Hawking, Steve Ballmer, Steve Jobs, Steve Wozniak, Steven Levy, Tim Cook: Apple, Turing test, Upton Sinclair, Vannevar Bush, zero day
The Register, a UK-based tech pub known for its strident, critical views of the industry, ran a funny story detailing its employees’ efforts to obtain an invite to the iPhone 7 Apple Event. They installed an email tracker to see if Apple’s press folks were in fact reading their entreaties. It turned out they were. (They didn’t get in.) So I decided to do the same. Apple hadn’t responded to my latest futile request for interviews for months. So, I installed an email tracker made by a company called Streak, and I sent a fresh query. By the end of the day, it had been read on three different devices, presumably by three different people. I never heard back. I tried again a week later, with the same result. Nice. Eventually, I decided to cut out the middle man and write directly to Tim Cook. You never know, right? Jobs was famous for randomly responding to notes in his in-box, and Cook had done the same once or twice. I sent Tim Cook an email requesting an interview on August 31, 2016.
When it’s opened, the image pings the server it came from with data that includes the time and location that the email was opened as well as the kind of device used to open it. That was the weird thing. When Tim Cook opened my email, the software showed me what kind of device he’d opened it on: A Windows desktop computer. That couldn’t be right. I emailed Streak to ask how accurate that part of the service was. Their support team told me, “If it has specific device data: Very accurate.” I sent a follow-up email to Cook. Once again, it was opened—on a Windows desktop computer. Was Tim Cook using a PC? Or was whoever was sorting through his emails? Either possibility seemed odd. Apparently, the email I sent to Cook made its way to Apple PR; my Hail Mary had been hailed. I asked the PR rep if Tim Cook had actually opened my email. “Yes,” she said, “he read it and forwarded it on.” Okay, then. A couple weeks later, I sent one more follow-up.
So, while I made Apple officials fully aware of this project from the outset and repeatedly spoke with and met their PR representatives, they declined my many requests to interview executives and employees. Tim Cook never answered my (very thoughtful) emails. To tell this story, I met current and former Apple employees in dank dive bars or spoke with them over encrypted communications, and I had to grant anonymity to some of those I interviewed. Many people from the iPhone team still working at Apple told me they would have loved to participate on the record—they wanted the world to know its incredible story—but declined for fear of violating Apple’s strict policy of secrecy. I’m confident that the dozens of interviews I did with iPhone innovators, the talks I had with journalists and historians who’ve studied it, and the documents I’ve obtained about the device all helped render a full and accurate portrait. That portrait will emerge on two tracks. The first puts you inside Apple to show how the iPhone was imagined, prototyped, and created by a host of unsung innovators—those who pioneered new ways of manipulating and interacting with information.
3D printing, accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, additive manufacturing, Airbnb, algorithmic trading, Alvin Roth, Asian financial crisis, asset allocation, bank run, Basel III, bonus culture, Bretton Woods, British Empire, call centre, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, centralized clearinghouse, clean water, collateralized debt obligation, commoditize, computerized trading, corporate governance, corporate raider, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, crowdsourcing, David Graeber, deskilling, Detroit bankruptcy, diversification, Double Irish / Dutch Sandwich, Emanuel Derman, Eugene Fama: efficient market hypothesis, financial deregulation, financial intermediation, Frederick Winslow Taylor, George Akerlof, gig economy, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, High speed trading, Home mortgage interest deduction, housing crisis, Howard Rheingold, Hyman Minsky, income inequality, index fund, information asymmetry, interest rate derivative, interest rate swap, Internet of things, invisible hand, John Markoff, joint-stock company, joint-stock limited liability company, Kenneth Rogoff, knowledge economy, labor-force participation, labour mobility, London Whale, Long Term Capital Management, manufacturing employment, market design, Martin Wolf, money market fund, moral hazard, mortgage debt, mortgage tax deduction, new economy, non-tariff barriers, offshore financial centre, oil shock, passive investing, Paul Samuelson, pensions crisis, Ponzi scheme, principal–agent problem, quantitative easing, quantitative trading / quantitative ﬁnance, race to the bottom, Ralph Nader, Rana Plaza, RAND corporation, random walk, rent control, Robert Shiller, Robert Shiller, Ronald Reagan, Satyajit Das, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Silicon Valley startup, Snapchat, sovereign wealth fund, Steve Jobs, technology bubble, The Chicago School, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, too big to fail, trickle-down economics, Tyler Cowen: Great Stagnation, Vanguard fund, zero-sum game
He does dead-on imitations of everyone from the Kansas oil tycoon who tried to give him the boot in his early days as an options dealer (“Cahhhl, I love yah, but I gotta leave yah—mah cousin’s in this business now”) to the aristocrat whom Icahn helped unload a block of Texaco shares when his cash was tight (“So I say, ‘Sir Robert, I hear you got some problems,’ and he says, ‘Quite correct, quite correct,’ ” Icahn mocks with a perfect lockjaw), to the trophy wife who complains about people on welfare while entertaining at her Hamptons megamansion, to his own mother. But when I once asked him to do Apple CEO Tim Cook, he declined. “Nah, I can’t do Cook. I can only do crazies.”1 Of course, some people say Cook is crazy to listen to Icahn, who has spent the last several years trying to persuade him to give back more and more of Apple’s $200 billion cash hoard to investors in the form of massive share buybacks, instead of investing it back in R&D or product development. This had the effect of pushing up the price of Apple’s stock while conveniently increasing the value of Icahn’s $7 billion in Apple holdings along with those of all the other Apple investors. In April 2015, Icahn’s efforts paid off, bigger than even he could have imagined. Flush with revenues from iPhone sales in China, Apple increased its dividend by 10.6 percent, the largest bump-up for a nonfinancial firm in history, and announced the most massive corporate payout ever: between 2015 and 2017, it would hand back more than $200 billion in the form of dividends and share buybacks to investors like Icahn.
Securities and Exchange Commission, Definitive Proxy Statement, Schedule 14A, Apple Inc., January 9, 2015. 3. Matt Levine, “Apple Bonds and Endless Mortgage Suits,” Bloomberg View, June 5, 2015; Ahmed and Childs, “Apple Is the New PIMCO and Tim Cook Is the New King of Bonds.” 4. Interview with OFR economists and analysts for this book. 5. William Lazonick, Mariana Mazzucato, and Oner Tulum, “Apple’s Changing Business Model: What Should the World’s Richest Company Do with All Those Profits?” Accounting Forum 37, no. 4 (2013): 249–67. 6. Edward N. Wolff, “Household Wealth Trends in the United States, 1962–2013: What Happened Over the Great Recession?” National Bureau of Economic Research, Working Paper No. 20733 (December 2014), 56; Apple, Inc., “Apple Expands Capital Return Program to $200 Billion,” press release, April 27, 2015. 7.
In the spring of 2013, Jobs’s successor as CEO of Apple Inc., Tim Cook, decided the company needed to borrow $17 billion. Yes, borrow. Never mind that Apple was the world’s most valuable corporation, that it had sold more than a billion devices so far, and that it already had $145 billion sitting in the bank, with another $3 billion in profits flowing in every month. So, why borrow? It was not because the company was a little short, obviously, or because it couldn’t put its hands on any of its cash. The reason, rather, was that Apple’s financial masters had determined borrowing was the better, more cost-effective way to obtain the funds. Whatever a loan might normally cost, it would cost Apple far less, thanks to a low-interest bond offering available only to blue-chip companies. Even better, Apple would not actually have to touch its bank accounts, which aren’t held someplace down the street like yours or mine.
The Wisdom of Finance: Discovering Humanity in the World of Risk and Return by Mihir Desai
activist fund / activist shareholder / activist investor, Albert Einstein, Andrei Shleifer, assortative mating, Benoit Mandelbrot, Brownian motion, capital asset pricing model, carried interest, collective bargaining, corporate governance, corporate raider, discounted cash flows, diversified portfolio, Eugene Fama: efficient market hypothesis, financial innovation, follow your passion, George Akerlof, Gordon Gekko, greed is good, housing crisis, income inequality, information asymmetry, Isaac Newton, Jony Ive, Kenneth Rogoff, Louis Bachelier, moral hazard, Myron Scholes, new economy, out of africa, Paul Samuelson, Pierre-Simon Laplace, principal–agent problem, Ralph Waldo Emerson, random walk, risk/return, Robert Shiller, Robert Shiller, Ronald Coase, Silicon Valley, Steve Jobs, The Market for Lemons, The Nature of the Firm, The Wealth of Nations by Adam Smith, Tim Cook: Apple, transaction costs, zero-sum game
So now, enterprises previously run by owner-managers have separate owners and managers. As just one example of this, the largest individual owner of Apple is CEO Tim Cook, but he owns only 0.02 percent of the company. Even the largest mutual fund owner of Apple owns less than 10 percent of the company. There are millions of investors in Apple who have decided to delegate the job of running Apple to managers—and these investors expect the managers to pursue what is in the best interest of the investors in Apple. For financial economists, this transition to companies with diffuse owners who delegate authority to professional managers is akin to Adam biting the apple in the Garden of Eden—it represents the end of innocence and the beginning of the modern world. Why is this change so profound? Consider the mighty Tootsie Roll, the first individually wrapped penny candy in the United States.
Oh, and those pension funds, which are the principals of those investors, are actually our agents, as savers and retirees. In short, capital markets begin to look like a daisy chain of principal-agent contracts, each with significant problems and conflicts. Let’s return to Apple. In 2013, Tim Cook faced a revolt triggered by the actions of David Einhorn of Greenlight Capital, who wanted Cook to start releasing all the cash that was building up inside of Apple. Cook, and Steve Jobs before him, had resisted calls to release that cash. Einhorn was the principal telling his agent, Tim Cook, to return that cash to shareholders. But Einhorn is himself the agent of state pension funds that have delegated to him the job of generating returns. And those state pension funds have our savings invested in them, and we’ve appointed those pension fund managers to manage our wealth.
And those state pension funds have our savings invested in them, and we’ve appointed those pension fund managers to manage our wealth. It is a series of principal-agent relationships—we (the ultimate principal) save through pensions funds (our agents), which appoint David Einhorn (the agents of the pension funds), who monitors Tim Cook (the agent of David Einhorn), who appoints Jony Ive (Cook’s agent as Apple’s chief design officer), who appoints . . . you get the idea. Once you become attuned to the principal-agent relationship, it’s hard not to see it playing out everywhere in life. In many ways, the biggest debates today on what is wrong with capitalism are actually debates about finance and agency theory. For some, the big problem is that the proponents of agency theory have been too successful: managers now only care about their owners! They should be looking out for workers, customers, and the environment, too.
Digital Wars: Apple, Google, Microsoft and the Battle for the Internet by Charles Arthur
activist fund / activist shareholder / activist investor, AltaVista, Build a better mousetrap, Burning Man, cloud computing, commoditize, credit crunch, crowdsourcing, disintermediation, don't be evil, en.wikipedia.org, Firefox, gravity well, Jeff Bezos, John Gruber, Mark Zuckerberg, Menlo Park, Network effects, PageRank, pre–internet, Robert X Cringely, Silicon Valley, Silicon Valley startup, skunkworks, Skype, slashdot, Snapchat, software patent, speech recognition, stealth mode startup, Steve Ballmer, Steve Jobs, the new new thing, the scientific method, Tim Cook: Apple, turn-by-turn navigation, upwardly mobile
The latter was the case with the town of Mildura, in the Australian Outback, which was shown miles from its correct location; Australian police issued a warning to people not to use Apple’s Maps to find it lest they die of heatstroke in the arid land. (The error was tracked down to a difference in the official Australian gazetteer, which gives place locations, between ‘Mildura’, the town, and ‘Mildura Rural City’, the nominal centre of a 22,000 square kilometre area including the town. Apple had used the latter. It was corrected within days.) A week after the release, and with Apple’s maps a laughing stock, Tim Cook – who had now been in unquestioned charge of Apple for a year – surprised the media with an effusive apology posted on the website. Maps ‘fell short’ and he was ‘extremely sorry for the frustration’ users had experienced. He outlined what Apple had wanted to bring – ‘turn-by-turn directions, voice integration, [3D views] and vector-based maps.
The message – problem in one batch, not many calls, same material, concerned users should buy a case – became the only one that Apple would put out. There was no off-the-record nudge and wink, no backroom briefing. Apple had its message and stuck to it. Later in October, during Apple’s quarterly results, chief operating officer Tim Cook was asked about the scratching issue. He sang from exactly the same hymn sheet: ‘We’ve had very, very few calls from customers,’ he said. ‘We don’t believe it’s a widespread issue. It’s made of the same material as the fourth-generation iPods. For customers who have concerns we suggest they use cases now on the market.’ There it was: batch, not many calls, material, case. Cook noted that, a month after its release, supply of nanos was ‘still far short of demand’. The reaction to the media storm – whether teacup-sized or not – is interesting. Apple wasn’t paralysed by size (a problem that sometimes afflicts Microsoft when trying to respond to questions).
Though he had popped up a few times through the year in public – launching the iPad 2, introducing the next version of iOS, finally in June lobbying Cupertino town council over Apple’s proposed new headquarters – paparazzi photos in August had suggested he was losing muscle mass rapidly to cancer. Yet he would not be hurried; once again he managed the moment perfectly, releasing a statement to the board later that month saying that ‘I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come.’ He ‘strongly recommended’ that the board ‘execute our succession plan and name Tim Cook as CEO of Apple’. That Apple had a succession plan came as a surprise to analysts and shareholders who had repeatedly asked the company to specify what, if any, plans there were if Jobs were to fall under a bus, and been rebuffed.
Matchmakers: The New Economics of Multisided Platforms by David S. Evans, Richard Schmalensee
Airbnb, Alvin Roth, big-box store, business process, cashless society, Chuck Templeton: OpenTable, creative destruction, Deng Xiaoping, if you build it, they will come, information asymmetry, Internet Archive, invention of movable type, invention of the printing press, invention of the telegraph, invention of the telephone, Jean Tirole, John Markoff, Lyft, M-Pesa, market friction, market microstructure, mobile money, multi-sided market, Network effects, Productivity paradox, profit maximization, purchasing power parity, QR code, ride hailing / ride sharing, sharing economy, Silicon Valley, Snapchat, Steve Jobs, Tim Cook: Apple, transaction costs, two-sided market, Uber for X, Victor Gruen, winner-take-all economy
A year after launch, out of 100 users, about 17 had ever tried it and out of those 17 just 5 used it when they could.20 Over the course of the year more people got the new iPhone model so that more people in total had Apple Pay set up on their phones and used it when they could. The number of people who probably had Apple Pay on their phones increased from roughly 2.7 million in November 2014 to 11.7 million in October 2015.21 As a result, the likelihood that an American adult would use Apple Pay at a terminal that accepted Apple Pay increased from 0.7 percent in November 2014 to 1.8 percent in October 2015.22 When it planned Apple Pay, the company had reasons to believe that more retailers would have the slick NFC terminals that Tim Cook showed at the September 2014 announcement. The payment card networks in the United States had told merchants that to reduce fraud, they had to install terminals that took “chip-and-pin” cards in addition to mag-stripe cards.
And so far, the prospect of taking Apple Pay has not resulted in a rapid movement toward making NFC terminals available at the point of sale. Although hard data is not available, the fraction of retail sales that takes place at terminals that can take Apple Pay was probably somewhere around 10 percent in October 2015. Apple Pay accounted for about 1.8 percent of the value of transactions at those terminals that month. It therefore accounted for about .18 percent—18 out of 10,000—of all card-based transactions at retail stores after a year. Apple Pay Diagnosis, One Year In It was apparent in the two back-to-back videos that Tim Cook showed on September 9, 2014, that Apple would face challenges in igniting its new mobile payment service. The first video suggested that there was a significant friction paying with plastic cards at the point of sale. The woman in the video had to dig into her pocketbook to find her card.
Chapter 10 Fizzle or Sizzle Making Smart Bets on New Matchmakers Forty-three minutes into the Apple live event, on September 9, 2014, after introducing the new iPhone 6, Tim Cook announced he was going to talk about an “entirely new category of service” for Apple.1 A thick wallet with cash and cards sticking out appeared on the screen behind him. “Our vision is to replace this.” According to Cook, people in the United States “scramble” for their cards about 200 million times a day, and they “go through what is a fairly antiquated payment process.” A video showed a woman paying for some clothes. She fumbled for her plastic card in her pocketbook, presented it to the clerk, who then asked for identification. The clerk swiped the mag-stripe card through a clunky-looking terminal. Apple’s CEO noted that the widely used mag-stripe card was based on a fifty-year old technology, wasn’t secure, and was easy to lose.2 Cook then unveiled Apple Pay.
Affordable Care Act / Obamacare, Bernie Madoff, big data - Walmart - Pop Tarts, call centre, carried interest, cloud computing, collateralized debt obligation, correlation does not imply causation, Credit Default Swap, credit default swaps / collateralized debt obligations, crowdsourcing, Emanuel Derman, housing crisis, I will remember that I didn’t make the world, and it doesn’t satisfy my equations, illegal immigration, Internet of things, late fees, mass incarceration, medical bankruptcy, Moneyball by Michael Lewis explains big data, new economy, obamacare, Occupy movement, offshore financial centre, payday loans, peer-to-peer lending, Peter Thiel, Ponzi scheme, prediction markets, price discrimination, quantitative hedge fund, Ralph Nader, RAND corporation, recommendation engine, Rubik’s Cube, Sharpe ratio, statistical model, Tim Cook: Apple, too big to fail, Unsafe at Any Speed, Upton Sinclair, Watson beat the top human players on Jeopardy!, working poor
“In terms of business competitiveness”: Businessweek Archives, “Same Sex Benefits: Where IBM Goes, Others May Follow,” Bloomberg Business, October 6, 1996, www.bloomberg.com/bw/stories/1996-10-06/same-sex-benefits-where-ibm-goes-others-may-follow. a gay man, Tim Cook: Timothy Donald Cook, “Tim Cook Speaks Up,” Bloomberg Business, October 30, 2014, www.bloomberg.com/news/articles/2014-10-30/tim-cook-speaks-up. Apple, the most valuable company: Verne Kopytoff, “Apple: The First $700 Billion Company,” Fortune, February 10, 2015, http://fortune.com/2015/02/10/apple-the-first-700-billion-company/. In 1907 alone, 3,242 miners died: MSHA, “Coal Fatalities for 1900 Through 2014,” US Department of Labor, accessed January 9, 2016, www.msha.gov/stats/centurystats/coalstats.asp. drew up such an oath: Emanuel Derman and Paul Wilmott, “The Financial Modeler’s Manifesto,” January 7, 2009, www.uio.no/studier/emner/sv/oekonomi/ECON4135/h09/undervisningsmateriale/FinancialModelersManifesto.pdf.
If we think about human resources policies at IBM and other companies as algorithms, they codified discrimination for decades. The move to equalize benefits nudged them toward fairness. Since then, gays and lesbians have registered impressive progress in many domains. This progress is uneven, of course. Many gay, lesbian, and transgender Americans are still victims of prejudice, violence, and WMDs. This is especially true among poor and minority populations. Still, as I write this, a gay man, Tim Cook, is the chief executive of Apple, the most valuable company on earth. And if he so chooses, he has the constitutional right to marry a man. Now that we’ve seen how corporations can move decisively to right a wrong in their hiring algorithms, why can’t they make similar adjustments to the mathematical models wreaking havoc on our society, the WMDs? Unfortunately, there’s a glaring difference. Gay rights benefited in many ways from market forces.
But with the Internet, people across the earth have produced quadrillions of words about our lives and work, our shopping, and our friendships. By doing this, we have unwittingly built the greatest-ever training corpus for natural-language machines. As we turned from paper to e-mail and social networks, machines could study our words, compare them to others, and gather something about their context. The progress has been fast and dramatic. As late as 2011, Apple underwhelmed most of techdom with its natural-language “personal assistant,” Siri. The technology was conversant only in certain areas, and it made laughable mistakes. Most people I know found it near useless. But now I hear people talking to their phones all the time, asking for the weather report, sports scores, or directions. Somewhere between 2008 and 2015, give or take, the linguistic skills of algorithms advanced from pre-K to middle school, and for some applications much higher.
Success and Luck: Good Fortune and the Myth of Meritocracy by Robert H. Frank
2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Amazon Mechanical Turk, American Society of Civil Engineers: Report Card, attribution theory, availability heuristic, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, carried interest, Daniel Kahneman / Amos Tversky, David Brooks, deliberate practice, en.wikipedia.org, endowment effect, experimental subject, framing effect, full employment, hindsight bias, If something cannot go on forever, it will stop - Herbert Stein's Law, income inequality, invisible hand, labor-force participation, labour mobility, lake wobegon effect, loss aversion, minimum wage unemployment, Network effects, Paul Samuelson, Report Card for America’s Infrastructure, Richard Thaler, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, Rory Sutherland, selection bias, side project, sovereign wealth fund, Steve Jobs, The Wealth of Nations by Adam Smith, Tim Cook: Apple, ultimatum game, Vincenzo Peruggia: Mona Lisa, winner-take-all economy
Frank, Thomas Gilovich, and Dennis Regan, “The Evolution of One-Shot Cooperation,” Ethology and Sociobiology 14 (July 1993): 247–56. 7. Adam Smith, The Wealth of Nations, part 4, section 3, Library of Economics and Liberty, http://www.econlib.org/library/Smith/smWN.html. 8. Adam Satariano, Peter Burrows, and Brad Stone, “Scott Forstall, the Sorcerer’s Apprentice at Apple,” Bloomberg Business, October 12, 2011, http://www.bloomberg.com/bw/magazine/scott-forstall-the-sorcerers-apprentice-at-apple-10122011.html. 9. Jay Yarrow, “Tim Cook: Why I Fired Scott Forstall,” Business Insider, December 6, 2012, http://www.businessinsider.com/tim-cook-why-i-fired-scott-forstall-2012–12. 10. Robert D. Putnam, Our Kids: The American Dream in Crisis, New York: Simon and Shuster, 2015. 11. M. A. Fox, B. A. Connolly, and T. D. Snyder, “Youth Indicators 2005: Trends in the Well-Being of American Youth,” Washington, DC, US Department of Education, National Center for Education Statistics, table 21, http://nces.ed.gov/pubs2005/2005050.pdf. 12.
According to Bloomberg Business, some associates described him off the record as someone who “routinely takes credit for collaborative successes, deflects blame for mistakes.”8 When Forstall was dismissed in October 2012, Apple CEO Tim Cook explained that the move was necessary to preserve the company’s collaborative culture.9 Does willingness to acknowledge the contributions of others—to admit that your success stemmed in part from what others did—affect your attractiveness as a teammate? My experience with former Fed chairman Ben Bernanke, with whom I had the privilege of coauthoring an introductory economics textbook, suggests that it does. Ben is by far the most successful economist I’ve ever worked with closely. In addition to his tenure as chair at the Fed, he served as editor of the prestigious American Economic Review and was for many years the chairman of Princeton’s highly ranked department of economics.
Perceptions that someone is “too ambitious” may sometimes be rooted in jealousy or envy, but unusually ambitious individuals can threaten team cohesion even in the absence of such emotions. Many believe, for example, that former Apple senior vice president Scott Forstall was discharged from his post for that reason. Forstall had been the chief architect of the iOS operating system that powers the iPhone and iPad, whose meteoric sales growth made Apple the most profitable company in history. He had been the longtime protégé of Apple cofounder Steve Jobs, was universally acknowledged as an extraordinary engineering talent, and was sometimes mentioned as a potential future Apple CEO. Yet few press accounts of him during his heyday at the company failed to mention that he was unusually ambitious. According to Bloomberg Business, some associates described him off the record as someone who “routinely takes credit for collaborative successes, deflects blame for mistakes.”8 When Forstall was dismissed in October 2012, Apple CEO Tim Cook explained that the move was necessary to preserve the company’s collaborative culture.9 Does willingness to acknowledge the contributions of others—to admit that your success stemmed in part from what others did—affect your attractiveness as a teammate?
The Entrepreneurial State: Debunking Public vs. Private Sector Myths by Mariana Mazzucato
Apple II, banking crisis, barriers to entry, Bretton Woods, California gold rush, call centre, carbon footprint, Carmen Reinhart, cleantech, computer age, creative destruction, credit crunch, David Ricardo: comparative advantage, demand response, deskilling, endogenous growth, energy security, energy transition, eurozone crisis, everywhere but in the productivity statistics, Financial Instability Hypothesis, full employment, G4S, Growth in a Time of Debt, Hyman Minsky, incomplete markets, information retrieval, intangible asset, invisible hand, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, knowledge worker, natural language processing, new economy, offshore financial centre, Philip Mirowski, popular electronics, profit maximization, Ralph Nader, renewable energy credits, rent-seeking, ride hailing / ride sharing, risk tolerance, shareholder value, Silicon Valley, Silicon Valley ideology, smart grid, Steve Jobs, Steve Wozniak, The Wealth of Nations by Adam Smith, Tim Cook: Apple, too big to fail, total factor productivity, trickle-down economics, Washington Consensus, William Shockley: the traitorous eight
Studies in Comparative International Development 32, nos. 3–4: 208–32. Liedtke, M. 2012. ‘Apple Cash: CEO Tim Cook Says Company Has More Than It Needs’. Huffington Post, 23 February. Available online at http://www.huffingtonpost.com/2012/02/23/apple-cash-ceo-tim-cook_n_1297897.html?view=print&comm_ref=false (accessed 19 July 2012). Lim, B. and S. Rabinovitch. 2010. ‘China Mulls $1.5 Trillion Strategic Industries Boost: Sources’. Reuters, 3 December. Available online at http://www.reuters.com/article/2010/12/03/us-china-economy-investmentidUSTRE6B16U920101203 (accessed 24 July 2012). Linden, G., K. L. Kraemer and J. Dedrick. 2009. ‘Who Captures Value in a Global Innovation Network? The Case of Apple’s iPod’. Communications of the ACM 52, no. 3: 140–44. Liu, C. 2011. ‘China Uses Feed-In Tariff to Build Domestic Solar Market’.
Borrowing the method that Shapiro used, one could factor that the top 9 Apple executives are expected to earn the same amount of money as roughly 17,600 of the company’s US retail employees did in 2011 (64 per cent of the total) and 15,000 (55 per cent of the total) in 2012 (Shapiro 2012).2 When Apple’s CEO, Tim Cook, announced in February 2012 that the company has more cash ($98 billion) than it currently needs to sustain its operations, many analysts and shareholders expected Apple to return a portion of its record-high cash to its shareholders (Liedtke 2012). The top executives were intrigued by the question of what to do with the excess sitting cash, since the company had not been distributing dividends or repurchasing its own stocks during Steve Jobs’ tenure. As many have predicted, Apple has recently announced a 3-year dividend and share repurchase plan that would divert slightly less than half of the company’s current cash stock ($45 billion) to its shareholders (Dowling 2012).
Economic Journal 49, no. 193 (March): 14–33. Hart, J. and M. Borrus. 1992. ‘Display’s the Thing: The Real Stakes in the Conflict over High Resolution Displays’. Berkeley Roundtable on the International Economy (BRIE) Working Paper no. 52. Available online at http://brie.berkeley.edu/publications/WP%2052.pdf (accessed 24 January 2013). Haslam, K. 2012. ‘Tim Cook’s Disastrous First Appointment as CEO’. Macworld, 30 October. Available online at http://www.macworld.co.uk/apple-business/news/?newsid=3407940&pagtype=allchandate (accessed 22 January 2013). Henderson, J. 2004. ‘UT Professor, 81, Is Mired in Patent Lawsuit’. Houston Chronicle, 5 June. Available online at http://www.chron.com/default/article/UT-professor-81-is-mired-in-patent-lawsuit-1662323.php (accessed 11 February 2013). Henderson, N. and M. Schrage. 1984.
The Best Interface Is No Interface: The Simple Path to Brilliant Technology (Voices That Matter) by Golden Krishna
Airbnb, computer vision, crossover SUV, en.wikipedia.org, fear of failure, impulse control, Inbox Zero, Internet Archive, Internet of things, Jeff Bezos, Jony Ive, Kickstarter, Mark Zuckerberg, new economy, Oculus Rift, pattern recognition, QR code, RFID, self-driving car, Silicon Valley, Skype, Snapchat, Steve Jobs, technoutopianism, Tim Cook: Apple, Y Combinator, Y2K
Adam Lashinsky, “Amazon’s Jeff Bezos: The Ultimate Disrupter,” Fortune, November 16, 2012. http://fortune.com/2012/11/16/amazons-jeff-bezos-the-ultimate-disrupter/ 3 “Cook: It’s never been stronger. Innovation is so deeply embedded in Apple’s culture. The boldness, ambition, belief there aren’t limits, a desire to make the very best products in the world. It’s the strongest ever. It’s in the DNA of the company.” “Live Recap: Apple CEO Tim Cook Speaks at Goldman Conference,” Wall Street Journal - Digits, February 12, 2013. http://blogs.wsj.com/digits/2013/02/12/live-apple-ceo-tim-cook-speaks-at-goldman-conference/ 4 Jesse Solomon, “Google Worth More Than Exxon. Apple Next?” CNN, February 7, 2014. http://money.cnn.com/2014/02/07/investing/google-exxon-market-value/ 5 2012 Lobbying (Millions $) Google, 18.22 Exxon Mobil, 12.97 “Biggest Increases in Lobbying in U.S.,” Bloomberg, May 28, 2013. http://www.bloomberg.com/visual-data/best-and-worst/biggest-increases-in-lobbying-in-u-dot-s-companies 2014 April–June (Q2) Lobbying (Millions $) Google, 5.03 Exxon Mobil, 2.80 Pfizer, 1.60 Lauren Hepler, “Google Drops $5M on Q2 2014 Lobbying: Self-Driving Cars, Health, Tax, Immigration,” Silicon Valley Business Journal, July 28, 2014. http://www.bizjournals.com/sanjose/news/2014/07/28/self-driving-cars-health-tech-immigration-google.html 6 Ashlee Vance, “This Tech Bubble Is Different,” Businessweek, April 14, 2011. http://www.businessweek.com/magazine/content/11_17/b4225060960537.htm Chapter 5 Addiction UX 1 “A whopping 96 percent of Google’s $37.9 billion 2011 revenue came from advertising . . .”
It likely lies near the root of the commonly pervasive and disturbingly screen-obsessed approach to design. The result is that much of our lives today is dominated by digital interfaces asking us to tap, touch, swipe, click, and hover because that’s what people were hired to create. HP CEO Meg Whitman says, “We’ve got to continue the innovation engine.”1 Amazon CEO Jeff Bezos says, “We innovate by starting with the customer and working backwards.”2 Apple CEO Tim Cook says, “Innovation is so deeply embedded in Apple’s culture.”3 But when you specifically hire someone to generate UI, you won’t get new, innovative solutions. You’ll get more UI, not better UX. This is UI: Navigation, subnavigation, menus, drop-downs, buttons, links, windows, rounded corners, shadowing, error messages, alerts, updates, checkboxes, password fields, search fields, text inputs, radio selections, text areas, hover states, selection states, pressed states, tooltips, banner ads, embedded videos, swipe animations, scrolling, clicking, iconography, colors, lists, slideshows, alt text, badges, notifications, gradients, pop-ups, carousels, OK/Cancel, etc. etc. etc.
1 John Pavlus, “A Tale of Two Newspaper Interfaces,” MIT Technology Review, March 13, 2013. http://www.technologyreview.com/view/512486/a-tale-of-two-newspaper-interfaces/ 2 Karis Hustad, ““Netflix Rolls Out Updated, Smarter TV Interface,” Christian Science Monitor, November 13, 2013. http://www.csmonitor.com/Innovation/2013/1113/Netflix-rolls-out-updated-smarter-TV-interface 3 “Apple TV: A Simpler Interface, Easier Access to Media Through the iCloud” Washington Post, March 8, 2012. http://www.washingtonpost.com/business/economy/apple-tv-a-simpler-interface-easier-access-to-media-through-icloud/2012/03/08/gIQARVivzR_story.html Chapter 2 Let’s Make an App 1 “Apple iPhone 3G ad - There’s An App For That (2009),” YouTube, Last accessed August 2014. https://www.youtube.com/watch?v=Mc-pV2YYOAs 2 Simon Hudson, Bumps for Boomers: Marketing Sport Tourism to the Aging Tourist, 2011, (Oxford: Goodfellow Publishers), p.14 3 Apple in 2009 started using the phrase, “There’s an app for that” in TV ads to show off the multitude of apps available for iOS devices through its popular App Store, which opened July 2008. Brian X. Chen, “Apple Registers Trademark for ‘There’s an App for That,’” Wired, October 11, 2010. http://www.wired.com/2010/10/app-for-that/ 4 “According to a joint report by UNICEF and the United Nations, of the 783 million people still without safe drinking water, the majority live in countries that are not among the world’s poorest.”
Platform Revolution: How Networked Markets Are Transforming the Economy--And How to Make Them Work for You by Sangeet Paul Choudary, Marshall W. van Alstyne, Geoffrey G. Parker
3D printing, Affordable Care Act / Obamacare, Airbnb, Alvin Roth, Amazon Mechanical Turk, Amazon Web Services, Andrei Shleifer, Apple's 1984 Super Bowl advert, autonomous vehicles, barriers to entry, big data - Walmart - Pop Tarts, bitcoin, blockchain, business process, buy low sell high, chief data officer, Chuck Templeton: OpenTable, clean water, cloud computing, connected car, corporate governance, crowdsourcing, data acquisition, data is the new oil, digital map, discounted cash flows, disintermediation, Edward Glaeser, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, financial innovation, Haber-Bosch Process, High speed trading, information asymmetry, Internet of things, inventory management, invisible hand, Jean Tirole, Jeff Bezos, jimmy wales, John Markoff, Khan Academy, Kickstarter, Lean Startup, Lyft, Marc Andreessen, market design, Metcalfe’s law, multi-sided market, Network effects, new economy, payday loans, peer-to-peer lending, Peter Thiel, pets.com, pre–internet, price mechanism, recommendation engine, RFID, Richard Stallman, ride hailing / ride sharing, Robert Metcalfe, Ronald Coase, Satoshi Nakamoto, self-driving car, shareholder value, sharing economy, side project, Silicon Valley, Skype, smart contracts, smart grid, Snapchat, software is eating the world, Steve Jobs, TaskRabbit, The Chicago School, the payments system, Tim Cook: Apple, transaction costs, two-sided market, Uber and Lyft, Uber for X, winner-take-all economy, zero-sum game, Zipcar
Charles Duhigg, “How Companies Learn Your Secrets,” New York Times, February 16, 2012, http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html?pagewanted=all. 18. Wade Roush, “The Story of Siri, from Birth at SRI to Acquisition by Apple—Virtual Personal Assistants Go Mobile,” xconomy, June 14, 2010, http://www.xconomy.com/san-francisco/2010/06/14/the-story-of-siri-from-birth-at-sri-to-acquisition-by-apple-virtual-personal-assistants-go-mobile/?single_page=true. 19. “A letter from Tim Cook on Maps,” Apple, http://www.apple.com/letter-from-tim-cook-on-maps/. 20. Amadeo, “Google’s Iron Grip on Android.” CHAPTER 8: GOVERNANCE 1. Josh Dzieza, “Keurig’s Attempt to DRM Its Coffee Cups Totally Backfired,” The Verge, February 5, 2015, http://www.theverge .com/2015/2/5/7986327/keurigs-attempt-to-drm-its-coffee-cups-totally-backfired. 2.
The new app misclassified nurseries as airports and cities as hospitals, suggested driving routes that passed over open water (your car had better float!), and even stranded unwary travelers in an Australian desert a full seventy kilometers from the town they expected to find there. iPhone users erupted in howls of protest, the media had a field day lampooning Apple’s misstep, and CEO Tim Cook had to issue a public apology.19 Apple accepted the bad publicity, likely reasoning that it could quickly improve its mapping service to an acceptable quality level—and this is essentially what has happened. The iPhone platform is no longer dependent on Google for mapping technology, and Apple has control over the mapping application as a source of significant value. Second, if particular functionality is reinvented by a number of extension developers and gains widespread acceptance by platform users, the manager of the platform should acquire the functionality and make it available through an open API.
In 2012, Google Maps had become the premier provider of mapping services and location data for mobile phone users. It was a popular feature on Apple’s iPhone. However, with more consumer activity moving to mobile devices and becoming increasingly integrated with location data, Apple realized that Google Maps was becoming a significant threat to the long-term profitability of its mobile platform. There was a real possibility that Google could make its mapping technology into a separate platform, offering valuable customer connections and geographic data to merchants, and siphoning this potential revenue source away from Apple. Apple’s decision to create its own mapping app to compete with Google Maps made sound strategic sense—despite the fact that the initial service was so poorly designed that it caused Apple significant public embarrassment. The new app misclassified nurseries as airports and cities as hospitals, suggested driving routes that passed over open water (your car had better float!)
23andMe, Airbnb, airport security, AltaVista, Anne Wojcicki, augmented reality, Benjamin Mako Hill, Black Swan, Brewster Kahle, Brian Krebs, call centre, Cass Sunstein, Chelsea Manning, citizen journalism, cloud computing, congestion charging, disintermediation, drone strike, Edward Snowden, experimental subject, failed state, fault tolerance, Ferguson, Missouri, Filter Bubble, Firefox, friendly fire, Google Chrome, Google Glasses, hindsight bias, informal economy, Internet Archive, Internet of things, Jacob Appelbaum, Jaron Lanier, John Markoff, Julian Assange, Kevin Kelly, license plate recognition, lifelogging, linked data, Lyft, Mark Zuckerberg, moral panic, Nash equilibrium, Nate Silver, national security letter, Network effects, Occupy movement, payday loans, pre–internet, price discrimination, profit motive, race to the bottom, RAND corporation, recommendation engine, RFID, self-driving car, Shoshana Zuboff, Silicon Valley, Skype, smart cities, smart grid, Snapchat, social graph, software as a service, South China Sea, stealth mode startup, Steven Levy, Stuxnet, TaskRabbit, telemarketer, Tim Cook: Apple, transaction costs, Uber and Lyft, urban planning, WikiLeaks, zero day
Google has done much the same: Associated Press (2 Apr 2013), “Timeline: A look at developments linked to Google privacy concerns,” CTV News, http://www.ctvnews.ca/sci-tech/timeline-a-look-at-developments-linked-to-google-privacy-concerns-1.1220927. Apple is somewhat of an exception: Rich Mogull (25 Jun 2014), “Why Apple really cares about your privacy,” Macworld, http://www.macworld.com/article/2366921/why-apple-really-cares-about-your-privacy.html. It uses iTunes purchase information: Charles Arthur (18 Sep 2014), “Apple’s Tim Cook attacks Google and Facebook over privacy flaws,” Guardian, http://www.theguardian.com/technology/2014/sep/18/apple-tim-cook-google-facebook-privacy-surveillance. It’s very big business for Amazon: Jay Greene (18 Mar 2014), “Amazon easing into $1 billion sideline business: ad sales,” Union Bulletin, http://union-bulletin.com/news/2014/mar/18/amazon-easing-1b-sideline-business-ad-sales.
The UK wants similar access: Guardian (19 Sep 2014), “Former UK ambassador to the United States given data-access role,” Guardian, http://www.theguardian.com/technology/2014/sep/19/sir-nigel-shienwald-data-access-role-david-cameron. Apple’s business model protects: Rich Mogull (25 Jun 2014), “Why Apple really cares about your privacy,” Macworld, http://www.macworld.com/article/2366921/why-apple-really-cares-about-your-privacy.html. Charles Arthur (18 Sep 2014), “Apple’s Tim Cook attacks Google and Facebook over privacy flaws,” Guardian, http://www.theguardian.com/technology/2014/sep/18/apple-tim-cook-google-facebook-privacy-surveillance. Do you trust a company: European countries allow for far more permissive government access than the US does. Cyrus Farivar (13 Oct 2013), “Europe won’t save you: Why e-mail is probably safer in the US,” Ars Technica, http://arstechnica.com/tech-policy/2013/10/europe-wont-save-you-why-e-mail-is-probably-safer-in-the-us.
threatened massive fine to force Yahoo to release data,” Washington Post, http://www.washingtonpost.com/business/technology/us-threatened-massive-fine-to-force-yahoo-to-release-data/2014/09/11/38a7f69e-39e8-11e4-9c9f-ebb47272e40e_story.html. companies are employing “warrant canaries”: Cyrus Farivar (5 Nov 2013), “Apple takes strong privacy stance in new report, publishes rare ‘warrant canary,’” Ars Technica, http://arstechnica.com/tech-policy/2013/11/apple-takes-strong-privacy-stance-in-new-report-publishes-rare-warrant-canary. valiant and clever effort: In fact, Apple’s canary disappeared in the report following the one where it debuted. No one is sure what it means. Jeff John Roberts (18 Sep 2014), “Apple’s ‘warrant canary’ disappears, suggesting new Patriot Act demands,” Gigaom, https://gigaom.com/2014/09/18/apples-warrant-canary-disappears-suggesting-new-patriot-act-demands. many companies are stepping up: The Electronic Frontier Foundation is keeping a scorecard.
A Fine Mess by T. R. Reid
Affordable Care Act / Obamacare, Bernie Sanders, Capital in the Twenty-First Century by Thomas Piketty, carried interest, centre right, clean water, Donald Trump, Double Irish / Dutch Sandwich, game design, Gini coefficient, High speed trading, Home mortgage interest deduction, Honoré de Balzac, income inequality, industrial robot, land value tax, loss aversion, mortgage tax deduction, obamacare, Occupy movement, offshore financial centre, oil shock, Plutocrats, plutocrats, race to the bottom, Ronald Reagan, seigniorage, Silicon Valley, Skype, Snapchat, sovereign wealth fund, Tesla Model S, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, We are the 99%, WikiLeaks
“We pay all the taxes we owe, every single dollar,” declared Tim Cook, Apple’s CEO, who noted that Apple paid significant sums in U.S. taxes on its sales in the United States—more than $16 million in corporate income tax every day of the year. “We do not depend on tax gimmicks. . . . We do not stash money on some Caribbean island.” The problem, Cook said, was that 35% corporate tax rate, which would make it “very expensive” to record those international sales in the United States or to bring home the billions of dollars Apple had assigned to its foreign subsidiaries. The best solution would be for the United States to “eliminate all corporate tax expenditures, lower corporate income tax rates, and implement a reasonable tax on foreign earnings that allows the free flow of capital back to the United States.” In short, Tim Cook gave Congress the same message that Gérard Depardieu had given to François Hollande: if you set tax rates high, taxpayers will fall back on “convoluted and pernicious strategies” to avoid them—including taking their money to a different country.
“Rather, it is designed to minimize tax on sales of products sold in the United States. . . . By routing its manufacturing through a tiny factory in Puerto Rico, Microsoft saved over $4.5 billion in taxes on goods sold in the United States” over a three-year period.8 Despite these industrious efforts to escape American taxes, Caterpillar, Apple, Google, and Microsoft still declare themselves to be American corporations. Apple’s CEO, Tim Cook, was adamant on this point that day when the senators were grilling him about “stateless income.” “I am often asked,” Cook said, “if Apple still considers itself an American company. My answer has always been an emphatic ‘Yes.’ We are proud to be an American company and equally proud of our contribution to the U.S. economy.” But the lure of tax avoidance is so strong that other American companies have been perfectly willing to renounce legal ties to their home country and move overseas (on paper at least) in pursuit of a lower rate of corporate income tax.
., a U.S. corporation, has used a variety of offshore structures, arrangements, and transactions to shift billions of dollars in profits away from the United States and into Ireland, where Apple has negotiated a special corporate tax rate of less than 2%,” a congressional investigation found.6 But even a 2% rate was more tax than Apple wanted to pay. So the company bookkeepers set up a subsidiary company, Apple Operations International. This legal entity was incorporated in Ireland but managed and controlled from the company headquarters in Cupertino, California. This “company” had no employees and no address; it had a three-member board of directors, which held its meetings in Cupertino. The home office then created a subsidiary of this Irish subsidiary, Apple Operations Europe, and a separate subsidiary of that subsidiary, Apple Sales International. Those two lower-level subsidiaries of Apple Operations International were also incorporated in Ireland but controlled and managed in Cupertino.
The New Kingmakers by Stephen O'Grady
Amazon Web Services, barriers to entry, cloud computing, correlation does not imply causation, crowdsourcing, David Heinemeier Hansson, DevOps, Jeff Bezos, Khan Academy, Kickstarter, Marc Andreessen, Mark Zuckerberg, Netflix Prize, Paul Graham, Ruby on Rails, Silicon Valley, Skype, software as a service, software is eating the world, Steve Ballmer, Steve Jobs, Tim Cook: Apple, Y Combinator
Even its forgotten desktop business is showing steady if unspectacular growth. There are many factors contributing to Apple’s remarkable success, from the brilliance of the late Steve Jobs to the supply chain sophistication of current CEO Tim Cook. And of course, Apple’s success is itself fueling more success. In the tablet market, for example, would-be competitors face not only the daunting task of countering Apple’s unparalleled hardware and software design abilities, but the economies of scale that allow Apple to buy components more cheaply than anyone else. The perfect storm of Apple’s success is such that some analysts are forecasting that it could become the world’s first trillion-dollar company. Lost in the shuffle has been the role of developers in Apple’s success. But while the crucial role played by Apple’s developers in the company’s success might be lost on the mainstream media, it is not lost on Apple itself.
Here are five businesses that, in at least one area, understood the importance of developers and engaged appropriately. Apple In August 2011, a month after reporting record earnings, Apple surpassed Exxon as the world’s biggest company by market capitalization. This benchmark was reached in part because of fluctuations in oil price that affected Exxon’s valuation, but there’s little debate that Apple is ascendant. By virtually any metric, Steve Jobs’s second tenure at Apple has turned into one of the most successful in history, in any industry. Seamlessly moving from hit product to hit product, the Apple of 2012 looks nothing like the Apple of the late nineties, when Dell CEO Michael Dell famously suggested that Apple should be shut down, to “give the money back to the shareholders.” It is no longer the leader in smartphone shipments, but according to independent analyst Horace Dediu, Apple regularly collects two-thirds of the industry’s total available mobile phone profits.
An iPhone or iPad user contemplating a switch would have to evaluate whether they can get all of the same applications on a competitive platform, then decide whether they’re willing to purchase the commercial apps a second time for a different platform. Apple has, with its success, created a virtuous cycle that will continue to reward it for years to come. Developers are attracted to its platform because of the size of the market…those developers create thousands of new applications…the new applications give consumers thousands of additional reasons to buy Apple devices rather than the competition…and those new Apple customers give even more developers reason to favor Apple. Apple not only profits from this virtuous cycle, it benefits from ever-increasing economies of scale, realizing lower component costs than competitors. None of which would be possible without the developers Apple has recruited and, generally, retained. Amazon Web Services The company that started the cloud computing craze was founded in 1994 as a bookstore.
Evil by Design: Interaction Design to Lead Us Into Temptation by Chris Nodder
4chan, affirmative action, Amazon Mechanical Turk, cognitive dissonance, crowdsourcing, Daniel Kahneman / Amos Tversky, Donald Trump, en.wikipedia.org, endowment effect, game design, haute couture, jimmy wales, Jony Ive, Kickstarter, late fees, loss aversion, Mark Zuckerberg, meta analysis, meta-analysis, Milgram experiment, Netflix Prize, Nick Leeson, Occupy movement, pets.com, price anchoring, recommendation engine, Rory Sutherland, Silicon Valley, stealth mode startup, Steve Jobs, telemarketer, Tim Cook: Apple, trickle-down economics, upwardly mobile
Use pre-persuasion. Apple often shies away from direct technical comparison with competitors. Indeed, CEO Tim Cook said, “[Product specifications] are the things tech companies invent because they can’t provide a great experience.” Instead, the company bypasses this rational comparison. Apple marketing normally makes performance comparisons only to previous versions of the same Apple product, and instead redirects by providing aesthetic and emotional (metaphysical) comparisons to competitor products. 8. Frequently use heuristics and commonplaces. Some of the widely accepted statements that Apple has adopted include “Quality is never cheap,” “You are paying for good design,” “It’s easy to use,” and “Think different.” 9. Attack opponents. This is one technique that Apple doesn’t tend to openly employ.
“The Scientific Impotence Excuse: Discounting Belief-Threatening Scientific Abstracts.” Journal of Applied Social Psychology 40 (2010): 579–600. Pratkanis’ techniques: Anthony R. Pratkanis. “How to Sell a Pseudoscience.” Skeptical Inquirer T9 (1995). Tim Cook quote: Goldman Sachs Technology and Internet conference, February 12, 2013. BBC Superbrands documentary: Alex Riley and Adam Boome. “Superbrands' success fuelled by sex, religion and gossip” BBC (bbc.co.uk). May 16, 2011. Retrieved December 2012. Kirsten Bell’s observations: Francie Diep. “Why Apple Is the New Religion.” TechNewsDaily (technewsdaily.com). Oct 23 2012. Retrieved December 2012. Apple as religion: Pui-Yan Lam. “May the Force of the Operating System be with You: Macintosh Devotion as Implicit Religion.” Sociology of Religion 62:2 (2001): 243–262. Every iKeynote ever comic: Ray, Raf, and Will.
The newer influx of Apple users may have diluted the original fervor of Mac devotees, but it’s still possible to see rationalization at work just by starting a discussion of the relative value-per-dollar of Apple computers versus generic PCs. 3. Manufacture source credibility and sincerity. Steve Jobs, the now-deceased father of Apple, has been replaced by head designer Jony Ive as the spiritual leader of the Apple clan. 4. Establish a granfalloon. Enter any Apple store to see ritual, symbolism, and feelings at work creating a feeling of belonging for the in-group of Apple users. Door greeters might as well be saying, “Welcome home.” 5. Use self-generated persuasion. Apple fans are the company’s best salespeople. Hype and limited initial availability lead to total strangers asking early adopters how they like their new toy. It’s unlikely these avid fans are going to say, “I hate it!” 6. Construct vivid appeals.
Affordable Care Act / Obamacare, Black Swan, business intelligence, Carmen Reinhart, cognitive bias, correlation does not imply causation, Daniel Kahneman / Amos Tversky, Donald Trump, en.wikipedia.org, Kenneth Rogoff, labor-force participation, lake wobegon effect, Long Term Capital Management, Mercator projection, Mercator projection distort size, especially Greenland and Africa, meta analysis, meta-analysis, Nate Silver, obamacare, p-value, PageRank, pattern recognition, publication bias, QR code, randomized controlled trial, risk-adjusted returns, Ronald Reagan, selection bias, statistical model, The Signal and the Noise by Nate Silver, Thomas Bayes, Tim Cook: Apple, wikimedia commons, Yogi Berra
Nathan Yau, “Fox News Makes the Best Pie Chart. Ever,” Flowing Data website, accessed August 4, 2015. http://flowingdata.com/2009/11/26/fox-news-makes- the-best-pie-chart-ever/. The pie chart was aired on Fox Chicago, and the source was given as Opinion Dynamics. 221158 i-xiv 1-210 r4ga.indd 179 2/8/16 5:58:50 PM 180 Notes 12. David Yanofsky, “The Chart Tim Cook Doesn’t Want You to See,” Quartz website, September 10, 2013, http://qz.com/122921/the-chart-tim-cook-doesnt -want-you‑to‑see/. 13. For a stunning look at how data can be captured, check out www.dear -data.com—“a year-long, analog data drawing project” by two extremely talented information designers: Giorgia Lupi and Stefanie Posavec, “Dear Data,” accessed June 7, 2015, http://www.dear-data.com/. 14. “American Time Use,” Bureau of Labor Statistics website, http://data.bls .gov/cgi-bin/surveymost?
Weighting can be a valid statistical tool if done correctly—but you need to know if, and how, it’s happening in order to be a smart consumer of data. 5. Finally, identify outliers, and understand the impact they can have on your average. Some outliers are perfectly valid parts of the data set. Other times, it makes sense to exclude extreme examples in order to get a fair answer to the question you’re asking. One bad apple can spoil the bunch, as they say. Not every outlier is a bad apple—but an outlier can skew your results in a way you need to be aware of.46 221158 i-xiv 1-210 r4ga.indd 44 2/8/16 5:58:50 PM 4 Are You Smarter Than an iPhone-Using, R adiohead-Loving Republican? Understanding Correlation Versus Causation A s any self-respecting parent will tell you, there’s a lot of pressure to make sure little Susie and Johnny are smarter than their classmates.
For example, Starbucks chief creative officer and president of Global Innovation and Evolution Fresh Retail (and former director of real estate) Arthur Rubinfeld has written an entire book on how everyday franchisees can learn the lessons of Starbucks with respect to site selection; his secrets include looking for oil stains in the parking lot (a sign that there’s lots of traffic).18 Maybe a Starbucks location is more likely to have sidewalks, and people like living where there are sidewalks. Maybe every time a Starbucks opens, an Apple Store opens next door—and that’s what is driving the rise in real estate prices. We don’t know. And that’s the point. Omitted Variables All of these factors—town centers, sidewalks, Apple Stores—are possible omitted variables. An omitted variable is one of the primary reasons why correlation doesn’t equal causation. Remember when we talked about bivariate relationships— relationships between two variables? The problem is that often there are more than two variables. You have a relationship between two variables (also known as dependence), but there’s actually a third variable that matters as well.
2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, banking crisis, carried interest, collateralized debt obligation, collective bargaining, Credit Default Swap, credit default swaps / collateralized debt obligations, desegregation, full employment, Home mortgage interest deduction, job automation, Mahatma Gandhi, minimum wage unemployment, money market fund, new economy, Occupy movement, offshore financial centre, Plutocrats, plutocrats, Ponzi scheme, race to the bottom, Ronald Reagan, single-payer health, special drawing rights, The Wealth of Nations by Adam Smith, Tim Cook: Apple, too big to fail, trickle-down economics, women in the workforce, working poor, zero-sum game
Even though the rate of unemployment has begun to fall, jobs still remain scarce, and the pay of the bottom 90 percent continues to drop, adjusted for inflation. But CEO pay is still rising through the stratosphere. Among the CEOs who took in more than $50 million in 2011 were Qualcomm’s Paul Jacobs ($50.6 million), JCPenney’s Ron Johnson ($51.5 million), Starbucks’s Howard Schultz ($68.8 million), Tyco International’s Ed Breen ($68.9 million), and Apple’s Tim Cook ($378 million). The titans of Wall Street are doing even better. The super-rich are not investing in jobs and growth. They’re putting their bonanza into U.S. Treasury bills or investing it in Brazil or South Asia or anywhere else it can reap the highest return. The American economy is in trouble because so much income and wealth have been going to the top that the rest of us no longer have the purchasing power to keep the economy going.
According to the Commerce Department, American-based global corporations added 2.4 million workers abroad in the first decade of this century while cutting their American workforce by 2.9 million. Between 2009 and 2011, the thirty-five biggest U.S. companies added 113,000 American jobs but almost three times that many jobs (333,000) abroad, according to a survey by The Wall Street Journal. Nearly 60 percent of their revenue growth came from outside the United States. Apple employs 43,000 people in the United States but contracts with over 700,000 workers abroad. It makes iPhones in China both because wages are low there and because Apple’s Chinese contractor can quickly mobilize workers from company dormitories at almost any hour of the day or night. American companies aren’t creating just routine jobs overseas. They’re also creating good high-tech jobs there and doing more of their research and development abroad. The share of research and development spending going to their foreign subsidiaries rose from 9 percent in 1989 to almost 16 percent in 2009.
The rest involved agricultural commodities that don’t require much U.S. labor (because American agribusiness is highly automated) and chemical and high-tech goods that are even less labor-intensive. American corporations signed up for deals with China involving energy and aviation manufacturing, but much of the work would be done in China. American companies don’t care, as long as the deals help their bottom lines. An Apple executive told The New York Times, “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.” He might have added, and showing profits big enough to continually increase our share price. If Apple or any other big American company can make a product best and cheapest in China or anywhere else, then that’s where it’ll do it. I don’t blame the companies. American corporations are in business to make profits and boost their share value, not to create good American jobs.
The New Prophets of Capital by Nicole Aschoff
3D printing, affirmative action, Affordable Care Act / Obamacare, Airbnb, American Legislative Exchange Council, basic income, Bretton Woods, clean water, collective bargaining, commoditize, crony capitalism, feminist movement, follow your passion, Food sovereignty, glass ceiling, global supply chain, global value chain, helicopter parent, hiring and firing, income inequality, Khan Academy, late capitalism, Lyft, Mark Zuckerberg, mass incarceration, means of production, performance metric, profit motive, rent-seeking, Ronald Reagan, Rosa Parks, school vouchers, shareholder value, sharing economy, Silicon Valley, Slavoj Žižek, structural adjustment programs, Thomas L Friedman, Tim Cook: Apple, urban renewal, women in the workforce, working poor, zero-sum game
They can see how much every person in the company, including Mackey himself, makes. And, while the salaries of US corporate executives have skyrocketed over the past two decades, the company has restrained executive pay to nineteen times the average pay of all team members ($18 an hour for full-time, permanent employees). By comparison, in 2011 Apple’s Tim Cook took home $378 million in salary, stock, and other benefits, which was 6,258 times the pay of an average Apple employee. How can Whole Foods do all these things and remain profitable in the cutthroat food industry, where most food retailers make profits of pennies on the dollar? Although Whole Foods saw a temporary dip in profits following the 2008 financial crisis, Mackey attributes the long-term prosperity of the company to its conscious growth model.
Age of Context: Mobile, Sensors, Data and the Future of Privacy by Robert Scoble, Shel Israel
Albert Einstein, Apple II, augmented reality, call centre, Chelsea Manning, cloud computing, connected car, Edward Snowden, Edward Thorp, Elon Musk, factory automation, Filter Bubble, Google Earth, Google Glasses, Internet of things, job automation, John Markoff, Kickstarter, lifelogging, Marc Andreessen, Mars Rover, Menlo Park, Metcalfe’s law, New Urbanism, PageRank, pattern recognition, RFID, ride hailing / ride sharing, Robert Metcalfe, Saturday Night Live, self-driving car, sensor fusion, Silicon Valley, Skype, smart grid, social graph, speech recognition, Steve Jobs, Steve Wozniak, Steven Levy, Tesla Model S, Tim Cook: Apple, urban planning, Zipcar
Soon they will become even more integral and they will be inextricable from life itself in the Age of Context. Location In September 2012, Apple launched its own mobile maps. It took very little time for the public to realize that they were so awful as to be comedic. But the humor got lost if you were using them to find your way along a snowy road late at night. Apple Maps somehow managed to erase famous landmarks from their sites in the world’s major cities; others were relocated under bodies of water. Drivers reported that turn-by-turn voice directions were misguiding them, occasionally urging them to take abrupt turns mid-span on suspension bridges. The maps were so flawed that CEO Tim Cook soon publicly apologized, encouraging customers to use competing products, including Google Maps. It was a head-scratcher.
Some pointed to a bitter and public divorce between Apple and Google. Steve Jobs had considered Google Android to be a direct rip-off of Apple’s iOS operating system. Could Apple Maps have simply been a crudely devised and poorly executed act of revenge against a powerful former ally? We think not. In our view, Apple made a huge mistake, but it was strategically motivated and not part of a petty Silicon Valley vendetta. Although Google and Apple historically had lots of good reasons to be allies, they were destined to become the rivals they now are. In the past, tech companies were pretty much divided between hardware and software, so an alliance between world leaders in each of the two categories was formidable, to say the least. Apple was clearly the pacesetter in world-changing mobile hardware.
To remain a leader, Apple and Google each needed to vie for online time, for alliances with third-party developers and to provide platforms that make those apps valuable. For Google that meant having its own operating system; for Apple it meant having maps because it saw the unquestionable value of location-based services. For Apple, and many companies, mobile apps are the secret sauce of the Age of Context; mobile mapping is the most strategic of all categories. Caterina Fake, CEO and founder of Findery, a location-based platform, explains it best in a statement that is simultaneously obvious and profound: “Without location, there is no context.” And for Apple, without context there will be no leadership. So Apple and Google divorced. Today Android and iOS compete for mobile operating system dominance, and thus Apple had little choice but to develop its own maps. Its big mistake was not in the play, but in being unprepared for the enormous challenges they faced on an unrealistically short timeline and then blindly plowing forward.
Future Perfect: The Case for Progress in a Networked Age by Steven Johnson
Airbus A320, airport security, algorithmic trading, banking crisis, barriers to entry, Bernie Sanders, call centre, Captain Sullenberger Hudson, Cass Sunstein, cognitive dissonance, credit crunch, crowdsourcing, dark matter, Dava Sobel, David Brooks, Donald Davies, future of journalism, hive mind, Howard Rheingold, HyperCard, Jane Jacobs, John Gruber, John Harrison: Longitude, Kevin Kelly, Kickstarter, lone genius, Mark Zuckerberg, mega-rich, meta analysis, meta-analysis, Naomi Klein, Nate Silver, Occupy movement, packet switching, peer-to-peer, Peter Thiel, planetary scale, pre–internet, RAND corporation, risk tolerance, shareholder value, Silicon Valley, Silicon Valley startup, social graph, Steve Jobs, Steven Pinker, Stewart Brand, The Death and Life of Great American Cities, Tim Cook: Apple, urban planning, US Airways Flight 1549, WikiLeaks, William Langewiesche, working poor, X Prize, your tax dollars at work
Tech critics such as Scott Rosenberg and Andrew Leonard at Salon wrote tens of thousands of words on the latest developments at Apple. (I wrote a few thousand myself at the online magazine I had founded, FEED.) Sometime around then, Apple launched its first official website; now I could get breaking news about the company directly from the source, the second they announced it. If my nineteen-year-old self could time-travel to the present day, he would no doubt be amazed by all the Apple technology—the iPhones and MacBook Airs—but I think he would be just as amazed by the sheer volume and diversity of the information about Apple available now. In the old days, it might have taken months for details from a John Sculley keynote to make it to the College Hill Bookstore; now the lag is seconds, with dozens of people live-blogging every passing phrase from a Steve Jobs or Tim Cook speech. There are 8,000-word dissections of each new release of OS X at the technological site Ars Technica, written with attention to detail and technical sophistication that far exceed anything a traditional newspaper would ever attempt.
I made my monthly pilgrimages to College Hill because I was interested in the Mac, which was, it should be said, a niche interest in 1987, though not that much of a niche. Apple was one of the world’s largest creators of personal computers, and by far the most innovative. But if you wanted to find out news about the Mac—new machines from Apple, the latest word on the upcoming System 7 or HyperCard, or any new releases from the thousands of software developers or peripheral manufacturers—if you wanted to keep up with any of this, there was just about one channel available to you, as a college student in Providence, Rhode Island. You read Macworld. Even then, even if you staked out the College Hill Bookstore, waiting for issues hot off the press, you were still getting the news a month or two late, given the long lead times of a print magazine back then. Yes, if Apple had a major product announcement, or fired Steve Jobs, it would make it into The New York Times or The Wall Street Journal the next day.
Decentralization, peer-to-peer networks, gateways, platform stacks—the principles that Baran, Davies, Cerf, Kahn, and others hit upon together in the 1960s and 1970s provided a brilliant solution to the problem of sharing information on a planetary scale. Tellingly, the solution ultimately outperformed any rival approaches developed by the marketplace. Billions of dollars were spent by private companies trying to build global networks based on proprietary standards: AOL, CompuServe, Prodigy, Microsoft, Apple, and many others made epic efforts to become mainstream consumer networks in the late 1980s and early 1990s. They were all defeated by a set of networking standards—TCP/IP, the e-mail protocols of POP and SMTP, and the Web standards of HTML and HTTP—that were effectively public property: collectively developed and owned by no one, or by everyone. This was the stunning coda to Hayek’s career: he won a Nobel Prize by explaining how markets shared information much more effectively than centralized states, but when it came time to build a global system for sharing information, the ultimate solution came from outside the marketplace.
Connectography: Mapping the Future of Global Civilization by Parag Khanna
1919 Motor Transport Corps convoy, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, 9 dash line, additive manufacturing, Admiral Zheng, affirmative action, agricultural Revolution, Airbnb, Albert Einstein, amateurs talk tactics, professionals talk logistics, Amazon Mechanical Turk, Asian financial crisis, asset allocation, autonomous vehicles, banking crisis, Basel III, Berlin Wall, bitcoin, Black Swan, blockchain, borderless world, Boycotts of Israel, Branko Milanovic, BRICs, British Empire, business intelligence, call centre, capital controls, charter city, clean water, cloud computing, collateralized debt obligation, commoditize, complexity theory, continuation of politics by other means, corporate governance, corporate social responsibility, credit crunch, crony capitalism, crowdsourcing, cryptocurrency, cuban missile crisis, data is the new oil, David Ricardo: comparative advantage, deglobalization, deindustrialization, dematerialisation, Deng Xiaoping, Detroit bankruptcy, digital map, diversification, Doha Development Round, edge city, Edward Snowden, Elon Musk, energy security, ethereum blockchain, European colonialism, eurozone crisis, failed state, Fall of the Berlin Wall, family office, Ferguson, Missouri, financial innovation, financial repression, fixed income, forward guidance, global supply chain, global value chain, global village, Google Earth, Hernando de Soto, high net worth, Hyperloop, ice-free Arctic, if you build it, they will come, illegal immigration, income inequality, income per capita, industrial cluster, industrial robot, informal economy, Infrastructure as a Service, interest rate swap, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Isaac Newton, Jane Jacobs, Jaron Lanier, John von Neumann, Julian Assange, Just-in-time delivery, Kevin Kelly, Khyber Pass, Kibera, Kickstarter, labour market flexibility, labour mobility, LNG terminal, low cost carrier, manufacturing employment, mass affluent, mass immigration, megacity, Mercator projection, Metcalfe’s law, microcredit, mittelstand, Monroe Doctrine, mutually assured destruction, New Economic Geography, new economy, New Urbanism, off grid, offshore financial centre, oil rush, oil shale / tar sands, oil shock, openstreetmap, out of africa, Panamax, Parag Khanna, Peace of Westphalia, peak oil, Pearl River Delta, Peter Thiel, Philip Mirowski, Plutocrats, plutocrats, post-oil, post-Panamax, private military company, purchasing power parity, QWERTY keyboard, race to the bottom, Rana Plaza, rent-seeking, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Scramble for Africa, Second Machine Age, sharing economy, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, six sigma, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, Stuxnet, supply-chain management, sustainable-tourism, TaskRabbit, telepresence, the built environment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, Tim Cook: Apple, trade route, transaction costs, UNCLOS, uranium enrichment, urban planning, urban sprawl, WikiLeaks, young professional, zero day
Even what looks like de-globalization is actually still globalization. Apple is a perfect example of these complex realities. The Berkeley economist Enrico Moretti estimates that Apple is substantially responsible for sixty thousand jobs in Silicon Valley, only twelve thousand of which are employees in its Cupertino headquarters. “In Silicon Valley,” Moretti claims, “high-tech jobs are the cause of local prosperity, and the doctors, lawyers, roofers and yoga teachers are the effect.”2 What appears a thriving community is primarily the result of corporate innovation and global growth—not public investment. Apple is now taking its passive provision of goods a step further by strategically relaunching the production of one iMac line in Texas. As the CEO, Tim Cook, said in December 2013, “I don’t think we have a responsibility to create a certain kind of job.
In early 2015, the trading house Itochu made the largest Japanese foreign investment ever in China, buying (together with Thailand’s CP Group) a 10 percent stake in CITIC, one of China’s oldest and most respected conglomerates. CHAPTER 7: THE GREAT SUPPLY CHAIN WAR 1. Interview with author, July 18, 2015. 2. Enrico Moretti, The New Geography of Jobs (Houghton Mifflin Harcourt, 2012). 3. Josh Tyrangiel, “Tim Cook’s Freshman Year: The Apple CEO Speaks,” Bloomberg Businessweek, Dec. 6, 2012. 4. However, additive manufacturing and the sharing economy together do cause tremendous domestic dislocation. The construction sector is not tradable, but it can increasingly be automated as entire homes are designed, printed, and assembled out of 3-D printing kits, displacing contractors and builders across America and Europe. 5.
The more connectivity we have, the more such companies can make their mastery of it their competitive advantage. Even Silicon Valley’s technology companies increasingly make their products—and keep their money—in the cloud. There are fewer than five countries in the world whose GDP is larger than the more than $200 billion of liquid cash Apple Inc. holds in securities worldwide, meaning Apple could buy many countries’ combined output (minus their debt). Having sold almost two billion products to over one billion people, Apple not only has more money but also occupies greater mind share than most nations. Countries run by supply chains, cities that run themselves, communities that know no borders, and companies with more power than governments—all are evidence of the shift toward a new kind of pluralistic world system. The ranks of such global authorities that belong on our maps of connectivity are rapidly growing, a reminder that the map itself is never finished in a world of constant change.
Selfie: How We Became So Self-Obsessed and What It's Doing to Us by Will Storr
Albert Einstein, autonomous vehicles, banking crisis, bitcoin, book scanning, computer age, correlation does not imply causation, Donald Trump, Douglas Engelbart, Douglas Engelbart, Elon Musk, en.wikipedia.org, gig economy, greed is good, invisible hand, job automation, John Markoff, Lyft, Menlo Park, meta analysis, meta-analysis, Mont Pelerin Society, mortgage debt, Mother of all demos, Nixon shock, Peter Thiel, QWERTY keyboard, rising living standards, road to serfdom, Robert Gordon, Ronald Reagan, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, Silicon Valley startup, Steve Jobs, Steven Levy, Stewart Brand, The Future of Employment, Tim Cook: Apple, Uber and Lyft, War on Poverty, Whole Earth Catalog
These days, when business leaders are challenged about the lengths they go to reduce their tax bills, for example, they frequently defend their actions by presenting themselves as ultra-smart contestants in the neoliberal game who are managing to reduce their liabilities whilst still cleverly playing within its rules. In 2016, a three-year investigation by the EU found that electronics company Apple Inc. had paid between 0.005 per cent and 1 per cent tax on their European profits. The commission found that their ‘sweetheart’ deal with Ireland, where they’d based their European HQ, amounted to a form of illegal state aid and attempted to claw back $13bn. Dismissing all this as ‘political crap’, Chief Executive Tim Cook defended Apple by explaining that they’d ‘played by the rules’. Similarly, following the financial crisis, some bankers in Wall Street saw their bailing out by the state as proof of their superior skill at the game. ‘The fact that I benefited from [the bailout] is because I’m smart,’ one told This American Life reporter Adam Davidson.
.: ‘US concentrated poverty in the wake of the Great Recession’, Elizabeth Kneebone and Natalie Holmes, Brookings Institute, 31 March 2016. ‘Extremely poor’ neighbourhoods are here defined as ‘census tracts where 40 percent or more of the population lives below the federal poverty line.’ Back in 1981 the American Business Roundtable: Mirror, Mirror, Simon Blackburn (Princeton University Press, 2014), p. 97. In 2016, a three-year EU investigation . . . ‘political crap’: ‘Tim Cook condemns Apple tax ruling’, Julia Kollewe, Guardian, 1 September 2016. some bankers in Wall Street saw their bailing out: This American Life, WBEX Chicago, episode 415: ‘Crybabies’, originally aired 24 September 2010. As veteran tech reporter Dan Lyons has observed: Disrupted, Dan Lyons (Hachette, 2016), pp. 117–18. sales of Ayn Rand’s most famous work, Atlas Shrugged, began booming: In the final stages of fact checking I came across an article (‘Ayn Rand: the Tea Party’s Miscast Matriarch’, by Pam Martens, CounterPunch, 27 February 2012) that suggested this sales boom might have been artificially engineered by the Ayn Rand Institute, which had earmarked a large amount of money for distributing free copies.
Aristotle, his pupil, rejected this, insisting that the only reality is that which we can sense. We live in a world of things, he thought, and each of those things has unique properties that can be defined and categorized and acts predictably according to certain laws: an apple that falls to the ground does so under the force of gravity, he said, just as it floats on the sea under that of levity. His view of reality, and of change, was deeply optimistic. Historian Adrienne Mayor writes that Aristotle believed that ‘all things in nature moved towards achieving perfection of their potentials’. One thing in the world that undergoes change is a human. A person, like an apple, is an object in isolation that possesses its own unique properties. But what kind of thing is it? A sort of ‘political animal’, thought Aristotle. And this, crucially, was an animal that could be improved.
The Wide Lens by Ron Adner
barriers to entry, call centre, Clayton Christensen, inventory management, iterative process, Jeff Bezos, Lean Startup, M-Pesa, minimum viable product, mobile money, new economy, RAND corporation, RFID, smart grid, smart meter, spectrum auction, Steve Ballmer, Steve Jobs, Steven Levy, supply-chain management, Tim Cook: Apple, transaction costs
CNET.com, July 12, 2002, http://news.cnet.com/2100-1040-943519.xhtml. 210 iPod, boasting 100 million customers: Steven Levy, “Why We Went Nuts About the iPhone,” Newsweek, July 16, 2007. 210 Apple’s stock shot up 44 percent: Matt Krantz, “iPhone Powers up Apple’s Shares,” USA Today, June 28, 2007. 211 “four times the number of PCs that ship every year”: Morris, “Steve Jobs Speaks Out.” 211 Ericsson released the R380: Dave Conabree, “Ericsson Introduces the New R380e,” Mobile Magazine, September 25, 2001. 211 Palm followed up with its version: Sascha Segan, “Kyocera Launches First Smartphone in Years,” PC Magazine, March 23, 2010, http://www.pcmag.com/article2/0,2817,2361664,00.asp#fbid=C81SVwKJIvh. 211 “one more entrant into an already very busy space”: “RIM Co-CEO Doesn’t See Threat from Apple’s iPhone,” InformationWeek, February 12, 2007. 212 the phone was exclusively available from only one carrier: In a handful of markets regulators ruled the exclusivity arrangement illegal. 212 “The bigger problem is the AT&T network”: David Pogue, “The iPhone Matches Most of Its Hype,” New York Times, June 27, 2007. 212 priced at a mere $99 in 2007: Kim Hart, “Rivals Ready for iPhone’s Entrance; Pricey Gadget May Alter Wireless Field,” Washington Post, June 24, 2007. 212 “cause irreparable damage to the iPhone’s software”: Apple, press release, September 24, 2007. 213 “I say I like our strategy”: Steve Ballmer interviewed on CNBC, January 17, 2007. 213 They ran out of the older model six weeks before the July 2008 launch: Tom Krazit, “The iPhone, One Year Later,” CNET.com, June 26, 2008, http://news.cnet.com/8301-13579_3-9977572-37.xhtml. 213 60 percent went to buyers who already owned at least one iPod: Apple COO Tim Cook’s comments at Goldman Sachs Technology and Internet Conference, cited in JPMorgan analyst report, “Strolling Through the Apple Orchard: The Good, the Bad and the Ugly Scenarios,” March 4, 2008. 215 the average iPhone user paid AT&T $2,000: Jenna Wortham, “Customers Angered as iPhones Overload AT&T,” New York Times, September 2, 2009. 215 as high as $18 per user per month: Tom Krazit, “Piper Jaffray: AT&T Paying Apple $18 per iPhone, Per Month,” CNET.com, October 24, 2007, http://news.cnet.com/8301-13579_3-9803657-37.xhtml. 216 Apple announced its 10 billionth app download: Apple.com, “iTunes Store Tops 10 Billion Songs Sold,” February 25, 2010, http://www.apple.com/pr/library/2010/02/25iTunes-Store-Tops-10-Billion-Songs-Sold.xhtml.
Beyond a clear focus on their own capabilities, these firms were meticulous in their approach to configuring external elements around those capabilities. But while we can see these three principles employed by scores of successful organizations, no recent firm is a better exemplar of their use than Apple. Apple’s Success in the New Millennium Everyone knows that Apple has been on an incredible run for the last decade. But while a great deal of attention has focused on Apple’s sleek product designs, what is often misunderstood is Apple’s systematic approach to its ecosystem strategy—its hidden source of advantage. Apple has no monopoly on great products, great interfaces, or a great brand. Apple’s product design is key, of course, but Apple’s rivals have been at its heels—behind but close—for years, even garnering praise for comparable design quality and better functionality. In awarding the Consumer Electronics Show 2006 prize for Best in Show, CNET’s editors commented, “iPod killer?
,” EDN.com, June 25, 2001, http://www.edn.com/article/484332-Is_MP3_Here_to_Stay_.php. 145 “the hit of the holiday season”: Arik Hesseldahl, “iPod’s a Winner,” Forbes.com, December 7, 2001, http://www.forbes.com/2001/12/07/1207tentech.xhtml. 145 “revolutionary,” and “brilliant”: Eliot Van Buskirk, “How the iPod Will Change Computing,” CNET.com, November 2, 2001, http://reviews.cnet.com/4520-6450_7-5020659-1.xhtml. 146 purchased over 600,000 iPods: “Apple Press Info,” Apple.com., 2011, http://www.apple.com/pr/products/ipodhistory/. Accessed July 23, 2011. 146 Apple held only 15 percent of the digital player market: Brian Garrity, “Digital Devices Get Smaller, Capacity Grows; Will Consumers Respond?,” Billboard, November 9, 2002. 146 “iTunes Music Store offers a groundbreaking solution”: Apple, “Apple Launches the iTunes Music Store,” press release, April 28, 2003. 146 200,000 songs from major labels: Ibid. 146 8 billion songs: William Blair & Company, “Apple Inc.,” equity research report, September 2, 2009. 146 operating margin of 10 percent: Estimate from report by Pacific Crest Securities analyst Andy Hargreaves, discussed in Eric Savitz, “Apple: Turns Out, iTunes Makes Money, Pacific Crest Says, Subscription Service Seems Inevitable,” Tech Trader Daily, April 23, 2007. 146 compatible with both FireWire and USB cables: Michelle Megna, “Apple’s Shining Moment: The Company Hits the Right Notes with Its New Online Music Store and Revamped iPods,” New York Daily News, May 11, 2003. 146 sales of portable CD players were still more than double: Christopher Walsh, “All They Want for Xmas Is the iPod,” Billboard, January 29, 2005. 147 sales of the iPod had leaped 616 percent: Mark Evans, “Apple’s iPod Is ‘the Kleenex’ of MP3 Players: Cultural Phenomenon Garnered Apple US$1.1-Billion in Q3,” National Post (Canada), July 15, 2005. 147 closest competitor with 8 percent market share: IDC data cited in William Blair & Company, “Apple Inc.,” equity research report., September 2, 2009. 147 “These waves of technology, you can see them way before they happen”: Betsy Morris, “Steve Jobs Speaks Out,” Fortune, March 7, 2008. 147 “the Walkman of the early 21st century”: “Behind the Smiles at Sony,” Economist, March 12, 2005. 148 pioneers are the ones with arrows in their backs: Peter N.
3D printing, Amazon Web Services, augmented reality, call centre, clockwatching, cloud computing, Firefox, future of work, ghettoisation, Google Chrome, Google Glasses, Google Hangouts, Khan Academy, Kickstarter, Kodak vs Instagram, Lean Startup, Marc Andreessen, Mark Zuckerberg, Network effects, new economy, Occupy movement, place-making, prediction markets, pre–internet, QR code, recommendation engine, Richard Florida, risk tolerance, self-driving car, Silicon Valley, Silicon Valley startup, Skype, social graph, social web, Steve Jobs, Steve Wozniak, Thomas L Friedman, Tim Cook: Apple, Tony Hsieh, white picket fence, WikiLeaks, zero-sum game
And what this data indicates is that the one-screen world is not a possible trend but an inevitability that has already taken place, and that the growth continues at an exponential pace. When Apple CEO Tim Cook took to the stage at the Yerba Buena Center for the Arts on March 7, 2012, many people were waiting to see both how Cook would handle the first major release from Apple in a post–Steve Jobs world and what the rumored iPad would be capable of, as the iPad 2 was still selling well. Beyond a smooth performance and a new iPad that featured Retina Display with a faster computer processor (dual-core A5X processor with quad-core graphics, thank you very much), few picked up on the staggering data point that Cook enlightened us all with. Apple sold over fifteen million iPads in the first quarter of 2012. That was more than any PC maker’s total computer sales during the same quarter (including companies like HP, Lenovo, Dell, and Acer). In 2011, Apple had sold close to 175 million iPads, when all PC manufacturers combined shipped nearly 300 million PCs during that same year.
The company never pulled the trigger on their e-commerce project, and now they’re busy scrambling for “likes” on Facebook and are selling their products through the handful of big-box retailers left. Ironically, other, scrappier startups have disrupted this traditional retail model with digital-only brands that are capturing the imagination (and money) of consumers all over the world. WHAT APPLE KNOWS. What happened prior to 2001 that made Apple go into the retail business? Whenever the topic of Apple and the Apple retail experience (aka Apple Store) is brought up, many media pundits roll their eyes as if the success of these sparse and crisp stores is some kind of anomaly in business lore. It’s not. Apple came to a conclusion in the 1990s that many businesses have yet to wake up to. They knew that if potential customers walked into a traditional consumer electronics goods store and became inundated with a massive selection of computers and laptops, they would, instinctively, defer to the first sales associate they could wrestle down.
No one knows the value of simplicity and the power that it brings better than Ron Johnson. Prior to becoming the CEO of JCPenney, Johnson was the senior vice president of retail operations at Apple. In short, he led the concept of both the Apple retail stores and the Genius Bar. His record at Apple is pristine. Within two years of the first store opening, the retail operation of Apple surpassed a billion dollars in annual sales (beating the record held by The Gap). Globally, Apple now has over three hundred stores, and their expansion plans continue to be as aggressive as their product launches. In November 2011, Johnson left Apple to lead JCPenney through this time of purgatory and reboot. His first big and bold moves made news as the 110-year-old company not only struggles to remain relevant but fights within the constraints of the traditional retail world—a place where being an anchor store at a highly coveted shopping mall was the difference between success and failure.
Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy by Jonathan Taplin
1960s counterculture, 3D printing, affirmative action, Affordable Care Act / Obamacare, Airbnb, Amazon Mechanical Turk, American Legislative Exchange Council, Apple's 1984 Super Bowl advert, back-to-the-land, barriers to entry, basic income, battle of ideas, big data - Walmart - Pop Tarts, bitcoin, Brewster Kahle, Buckminster Fuller, Burning Man, Clayton Christensen, commoditize, creative destruction, crony capitalism, crowdsourcing, data is the new oil, David Brooks, David Graeber, don't be evil, Donald Trump, Douglas Engelbart, Douglas Engelbart, Dynabook, Edward Snowden, Elon Musk, equal pay for equal work, Erik Brynjolfsson, future of journalism, future of work, George Akerlof, George Gilder, Google bus, Hacker Ethic, Howard Rheingold, income inequality, informal economy, information asymmetry, information retrieval, Internet Archive, Internet of things, invisible hand, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John Maynard Keynes: technological unemployment, John von Neumann, Joseph Schumpeter, Kevin Kelly, Kickstarter, labor-force participation, life extension, Marc Andreessen, Mark Zuckerberg, Menlo Park, Metcalfe’s law, Mother of all demos, move fast and break things, move fast and break things, natural language processing, Network effects, new economy, Norbert Wiener, offshore financial centre, packet switching, Paul Graham, Peter Thiel, Plutocrats, plutocrats, pre–internet, Ray Kurzweil, recommendation engine, rent-seeking, revision control, Robert Bork, Robert Gordon, Robert Metcalfe, Ronald Reagan, Sand Hill Road, secular stagnation, self-driving car, sharing economy, Silicon Valley, Silicon Valley ideology, smart grid, Snapchat, software is eating the world, Steve Jobs, Stewart Brand, technoutopianism, The Chicago School, The Market for Lemons, Tim Cook: Apple, trade route, transfer pricing, trickle-down economics, Tyler Cowen: Great Stagnation, universal basic income, unpaid internship, We wanted flying cars, instead we got 140 characters, web application, Whole Earth Catalog, winner-take-all economy, women in the workforce, Y Combinator
Facebook, with its libertarian financier’s roots, takes much of the same stance toward content and advertising, but there are signs that its CEO has real ethical questions about where the company is going. Amazon, whose founder, Jeff Bezos, embraces the libertarian creed but has not taken the “don’t ask permission” route, has instead opened a new front: a relentless push to lower prices and commoditize content (especially books), which presents a different danger. And then there is Apple, the dissenter from the libertarian creed. Both Steve Jobs and Tim Cook have been real allies to the content community, and their stance against the surveillance-marketing model that is at the core of Google’s and Facebook’s businesses—i.e., their support of ad blockers—puts them in direct opposition to the dominant search and social platforms. The tech elite’s jealous guarding of its own monopoly platforms is built upon blatant disregard for the artist’s intellectual property, a fact that came home to me in April of 2012 when I debated Alexis Ohanian, the founder of Reddit, at the Fast Company Innovation Uncensored event.
Jobs went back to Cupertino and called a board meeting, saying he had to build a new computer based on the PARC architecture and that it should not be backward-compatible with the existing Apple II. The board thought he was crazy, but Jobs applied his charisma—his “reality distortion field”—and got his way. Xerox got its Apple shares, and in December of 1980, Apple went public at $22 per share. Xerox’s holdings were instantly worth millions. The first version of a computer using the PARC architecture, the Lisa, was a commercial failure, but when Jobs introduced the Macintosh in an iconic advertisement that aired during the 1984 Super Bowl, the long-awaited vision of the future arrived. The tragedy for Xerox was that two years later, the Xerox CFO sold all its Apple stock. Imagine what it would have meant to the company if it had held on to 5 percent of Apple, which would now be worth about $32 billion. In 1985, after the debut of the Macintosh, Microsoft quickly introduced Windows, an operating system that totally mimicked the Macintosh.
What was the chance that any of the PARC stuff could ever be sold through the Xerox channels? Zero.” So the decision was made to try to partner with Apple. Almost every version of the story of Steve Jobs visiting PARC for a demonstration in December of 1979 is wrong. It is usually said to epitomize the complete failure on Xerox’s part to understand what they had invented. A bit of background: Apple had successfully launched the Apple II computer in April of 1977. It was an instant hit, and between September of 1977 and September of 1980, yearly sales grew from $775,000 to $118 million, an average annual growth rate of 533 percent. But Jobs refused to sit still. He had heard about the Xerox Alto and had worked out a deal with Xerox in which he would sell them perhaps as much as 5 percent of Apple in return for a licensing agreement to all the PARC technology. But in a true sign of how dysfunctional Xerox management was, it did not inform the PARC executives of the pending stock transaction.
centralized clearinghouse, index card, lone genius, market bubble, Merlin Mann, New Journalism, Results Only Work Environment, rolodex, side project, Silicon Valley, Steve Jobs, Steve Wozniak, supply-chain management, Tim Cook: Apple, Tony Hsieh, young professional
A Doer will push the Incrementalist into more of a Dreamer mode when necessary, while a Dreamer brings out the Incrementalist’s impatience and organizational Doer-like tendencies. As we examine the history of spectacular creations and the leaders behind these accomplishments, some obvious examples of Doers, Dreamers, and Incrementalists stand out. Bill Bowerman, the former track coach who developed Nike’s running shoes, partnered with Phil Knight to transform his vision into a business. In the leadership of Apple, one might call Jonathan Ive (chief designer), Tim Cook (chief operating officer), and Steve Jobs (chief executive officer) Dreamer, Doer, and Incrementalist, respectively. In the world of fashion, the Dreamer Calvin Klein had Barry Schwartz, Ralph Lauren had Roger Farah, and Marc Jacobs had Robert Duffy—three fashion visionaries paired with a world-class Doer as a partner. And so, there is no ideal category. The Doers, Dreamers, and Incrementalists all have their own strengths and limitations.
You don’t need to set aside three actual rooms, but you do need a period of scrutiny in your creative process. You also don’t want to create too much structure around when you can and cannot generate new ideas. However, you must be willing to kill ideas liberally—for the sake of fully pursuing others. In a rare interview in BusinessWeek on Apple’s system for innovation, CEO Steve Jobs explained that, in fact, there is no system at Apple—and that spontaneity is a crucial element for innovation, so long as it is paired with the ability to say no without hesitation: Apple is a very disciplined company, and we have great processes. But that’s not what it’s about. Process makes you more efficient. But innovation comes from people meeting up in the hallways or calling each other at 10:30 at night with a new idea, or because they realized something that shoots holes in how we’ve been thinking about a problem.
At the same time, many of us don’t really associate such tasks with creativity and ideas. Since 2004, AMR Research, a leading authority on supply chain research that serves numerous Fortune 500 companies, has published an annual list of the twenty-five companies with the best supply chain management. You might be surprised to learn that Apple debuted on the list at No. 2 in 2007, and overtook companies such as Anheuser-Busch, Wal-Mart, Procter & Gamble, and Toyota to take the No. 1 slot in 2008. Why would Apple, a company known for new ideas and its ability to “think different,” also be one of the most organized companies on the planet? The answer is that—like it or not—organization is a major force for making ideas happen. Organization is just as important as ideas when it comes to making an impact. Consider the following equation: CREATIVITY X ORGANIZATION = IMPACT If the impact of our ideas is, in fact, largely determined by our ability to stay organized, then we would observe that those with tons of creativity but little to no organization yield, on average, nothing.
Ada Lovelace, autonomous vehicles, Baxter: Rethink Robotics, Black Swan, call centre, capital asset pricing model, commoditize, computer age, corporate governance, creative destruction, deskilling, en.wikipedia.org, Freestyle chess, future of work, Google Glasses, Grace Hopper, industrial cluster, industrial robot, interchangeable parts, job automation, knowledge worker, low skilled workers, Marc Andreessen, meta analysis, meta-analysis, Narrative Science, new economy, rising living standards, self-driving car, sentiment analysis, Silicon Valley, Skype, Steve Jobs, Steve Wozniak, Steven Levy, Steven Pinker, theory of mind, Tim Cook: Apple, transaction costs
Emma E. A. Cohen, Robin Ejsmond-Frey, Nicola Knight, R. I. M. Dunbar, “Rowers’ High: Behavioural Synchrony Is Correlated with Elevated Pain Thresholds,” Biology Letters 15, September 2009, doi:10.1098/rsbl.2009.0670. Nonetheless, by the time Jobs stepped down as CEO in August 2011 . . . See biographies at www.apple.com for the tenures as of August 2011 of Eddy Cue (twenty-two years), Phil Schiller (fourteen years), Jonathan Ive (nineteen years), Scott Forstall (nineteen years), and Tim Cook (thirteen years). To see how wrong things can go . . . “Why Teams Don’t Work: An interview with J. Richard Hackman by Diane Coutu,” Harvard Business Review, May 2009. Dr. John Noseworthy, CEO of the Mayo Clinic, told me about the considerable lengths to which he has gone . . . Personal interview with John Noseworthy, 4 December 2012.
Exhibit A was Apple’s top team under Steve Jobs. The conventional view of Apple’s success is that it derived from Jobs’s genius and dictatorial management, but Jobs knew that wasn’t nearly enough. He worked extraordinarily hard to assemble and keep a highly effective top team, which is an extremely difficult feat in a successful company. As the company prospers, other firms try to lure away its executives, usually with higher-level, higher-paying, more highly visible roles, and the temptation can be overwhelming. Nonetheless, by the time Jobs stepped down as CEO in August 2011, the six-executive inner circle he had assembled had been working as a team for thirteen years, meeting together for hours every week. This is virtually unheard of and appears to be unique among companies of Apple’s size and success.
Creativity comes from spontaneous meetings, from random discussions. You run into someone, you ask what they’re doing, you say ‘Wow,’ and soon you’re cooking up all sorts of ideas.’” It all has to happen in person. That’s why Jobs famously designed the Pixar headquarters the way he did. Pixar is the animation studio that Jobs initially funded and eventually ran in the years before he returned to Apple and for several years thereafter. It’s arguably the most successful film studio ever, since it has never produced a flop. The Toy Story films, Finding Nemo, the Cars films—of the fourteen features it had produced through 2013, every one was a major financial winner. Jobs wanted to keep it that way, so he insisted that Pixar’s new headquarters be designed around a central atrium; he then placed the café, mailboxes, conference rooms, and other elements so as to force people to criss-cross it.
A Curious Mind: The Secret to a Bigger Life by Brian Grazer, Charles Fishman
4chan, Airbnb, Albert Einstein, Apple II, Asperger Syndrome, Bonfire of the Vanities, en.wikipedia.org, game design, Google Chrome, Howard Zinn, Isaac Newton, Jeff Bezos, Kickstarter, Norman Mailer, out of africa, RAND corporation, Ronald Reagan, Silicon Valley, stem cell, Steve Jobs, Steve Wozniak, the scientific method, Tim Cook: Apple
Simpson Jared Cohen: director of Google Ideas Joel Cohen: population specialist, mathematical biologist Kat Cohen: university admissions counselor, author of The Truth About Getting In William Colby: CIA director, 1973–1976 Elizabeth Baron Cole: nutritionist Jim Collins: management consultant, expert on business and management, author of Good to Great Robert Collins: neurologist, former chairman of neurology at UCLA School of Medicine Sean Combs: musician, music producer, fashion designer, entrepreneur Richard Conniff: author who specializes in human and animal behavior Tim Cook: CEO of Apple, Inc. Tatiana Cooley-Marquardt: repeat winner of USA Memory Championship Anderson Cooper: journalist, author, TV personality, anchor of CNN’s Anderson Cooper 360 Norman Cousins: medical guru, author of Anatomy of an Illness: As Perceived by the Patient Jacques Cousteau: oceanographer, pioneered marine conservation Chris W. Cox: chief lobbyist for the National Rifle Association Steve Coz: former editor of National Enquirer Donald Cram: professor of chemistry at UCLA, Nobel laureate in chemistry Jim Cramer: investor, author, TV personality, host of CNBC’s Mad Money Clyde Cronkhite: criminal justice expert, former police chief of Santa Ana, former deputy police chief of Los Angeles Mark Cuban: investor, owner of the NBA’s Dallas Mavericks Heidi Siegmund Cuda: journalist, former music critic for the Los Angeles Times Thomas Cummings: leading expert in designing high-performing organizations and strategic change at USC Marshall School of Business Fred Cuny: disaster relief specialist Mario Cuomo: governor of New York, 1983–1994 Alan Dershowitz: attorney, constitutional scholar, professor emeritus at Harvard Law School Donny Deutsch: advertising executive, TV personality Jared Diamond: evolutionary biologist, author, professor at UCLA, winner of the Pulitzer Prize Alfred “Fred” DiSipio: record promoter investigated during payola scandal DMX: musician, actor Thomas R.
Williams: former police chief of Los Angeles Marianne Williamson: spiritual teacher, New Age guru Ian Wilmut: embryologist, led the team of researchers who first successfully cloned a mammal (a sheep named Dolly) E. O. Wilson: biologist, author, professor emeritus at Harvard University, two-time winner of the Pulitzer Prize Oprah Winfrey: founder and chairwoman of the Oprah Winfrey Network, actress, author George C. Wolfe: playwright, theater director, two-time winner of the Tony Award Steve Wozniak: cofounder of Apple Inc., designer of Apple I and Apple II computers, inventor John D. Wren: president and CEO of marketing and communications company Omnicom Will Wright: game designer, creator of Sim City and The Sims Steve Wynn: businessman, Las Vegas casino magnate Gideon Yago: writer, former correspondent for MTV News Eitan Yardeni: teacher and spiritual counselor at the Kabbalah Centre Daniel Yergin: economist, author of The Prize: The Epic Quest for Oil, Money and Power, winner of the Pulitzer Prize Dan York: chief content officer at DirecTV, former president of content and advertising sales, AT&T Michael W.
News & World Report, winner of the Pulitzer Prize for investigative reporting Jack Healey: human rights activist, former executive director of Amnesty International USA Thomas Heaton: seismologist, professor at California Institute of Technology, contributed to the development of earthquake early warning systems Peter Herbst: journalist, former editor of Premiere and New York magazines Danette Herman: talent executive for Academy Awards Seymour Hersh: investigative reporter, author, winner of the Pulitzer Prize for uncovering the My Lai massacre and its cover-up during the Vietnam War Dave Hickey: art and cultural critic who has written for Harper’s, Rolling Stone, and Vanity Fair Jim Hightower: progressive political activist, radio talk-show host Tommy Hilfiger: fashion designer, founder of lifestyle brand Christopher Hitchens: journalist and author who was a critic of politics and religion David Hockney: artist and major contributor to the Pop art movement in the 1960s Nancy Irwin: hypnotherapist Chris Isaak: musician, actor Michael Jackson: singer, songwriter, his 1982 album Thriller is the bestselling album of all time LeBron James: NBA basketball player Mort Janklow: literary agent, founder and chairman of the literary agency Janklow & Nesbit Associates Jay Z: musician, music producer, fashion designer, entrepreneur Wyclef Jean: musician, actor James Jebbia: CEO of the Supreme clothing brand Harry J. Jerison: paleoneurologist, professor emeritus at UCLA Steve Jobs: cofounder and former CEO of Apple Inc., cofounder and former CEO of Pixar Betsey Johnson: fashion designer Jamie Johnson: documentary filmmaker who directed Born Rich, heir to Johnson & Johnson fortune Larry C. Johnson: former analyst for the CIA, security and terrorism consultant Robert L. Johnson: businessman, media magnate, cofounder and former chairman of BET Sheila Johnson: cofounder of BET, first African American woman to be an owner/partner in three professional sports teams Steve Johnson: media theorist, popular science author, cocreated online magazine FEED Jackie Joyner-Kersee: Olympic gold medalist, track star Paul Kagame: president of Rwanda Michiko Kakutani: book critic for the New York Times, winner of the Pulitzer Prize for criticism Sam Hall Kaplan: former architecture critic for the Los Angeles Times Masoud Karkehabadi: wunderkind who graduated from college at age thirteen Patrick Keefe: author, staff writer for the New Yorker Gershon Kekst: founder of the corporate communications company Kekst and Co.
23andMe, 3D printing, active measures, additive manufacturing, Affordable Care Act / Obamacare, Airbnb, airport security, Albert Einstein, algorithmic trading, artificial general intelligence, Asilomar, Asilomar Conference on Recombinant DNA, augmented reality, autonomous vehicles, Baxter: Rethink Robotics, Bill Joy: nanobots, bitcoin, Black Swan, blockchain, borderless world, Brian Krebs, business process, butterfly effect, call centre, Chelsea Manning, cloud computing, cognitive dissonance, computer vision, connected car, corporate governance, crowdsourcing, cryptocurrency, data acquisition, data is the new oil, Dean Kamen, disintermediation, don't be evil, double helix, Downton Abbey, drone strike, Edward Snowden, Elon Musk, Erik Brynjolfsson, Filter Bubble, Firefox, Flash crash, future of work, game design, Google Chrome, Google Earth, Google Glasses, Gordon Gekko, high net worth, High speed trading, hive mind, Howard Rheingold, hypertext link, illegal immigration, impulse control, industrial robot, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Jaron Lanier, Jeff Bezos, job automation, John Harrison: Longitude, John Markoff, Jony Ive, Julian Assange, Kevin Kelly, Khan Academy, Kickstarter, knowledge worker, Kuwabatake Sanjuro: assassination market, Law of Accelerating Returns, Lean Startup, license plate recognition, lifelogging, litecoin, M-Pesa, Mark Zuckerberg, Marshall McLuhan, Menlo Park, Metcalfe’s law, mobile money, more computing power than Apollo, move fast and break things, move fast and break things, Nate Silver, national security letter, natural language processing, obamacare, Occupy movement, Oculus Rift, off grid, offshore financial centre, optical character recognition, Parag Khanna, pattern recognition, peer-to-peer, personalized medicine, Peter H. Diamandis: Planetary Resources, Peter Thiel, pre–internet, RAND corporation, ransomware, Ray Kurzweil, refrigerator car, RFID, ride hailing / ride sharing, Rodney Brooks, Satoshi Nakamoto, Second Machine Age, security theater, self-driving car, shareholder value, Silicon Valley, Silicon Valley startup, Skype, smart cities, smart grid, smart meter, Snapchat, social graph, software as a service, speech recognition, stealth mode startup, Stephen Hawking, Steve Jobs, Steve Wozniak, strong AI, Stuxnet, supply-chain management, technological singularity, telepresence, telepresence robot, Tesla Model S, The Future of Employment, The Wisdom of Crowds, Tim Cook: Apple, trade route, uranium enrichment, Wall-E, Watson beat the top human players on Jeopardy!, Wave and Pay, We are Anonymous. We are Legion, web application, Westphalian system, WikiLeaks, Y Combinator, zero day
In short, it’s high time to encrypt the Internet to help protect the privacy and security of our digital communications and computer data. Though modern computer operating systems, including those from both Microsoft and Apple, come with free hard disk encryption tools built in, they are not turned on by default, and only a small minority of companies and a tiny percentage of consumers encrypt the data on their laptops or desktops. In fact, most consumers have no idea these security protocols even exist. In the wake of the celebrity iCloud hacking fiasco of 2014, Apple’s chief executive, Tim Cook, acknowledged the company had to do more to ratchet up customers’ awareness of cyber-security matters. I thoroughly agree. In September 2014, Apple announced that its latest iPhone would encrypt all data on the device when a password was set, a move Google vowed to match with its forthcoming Android mobile phone operating system.
In September 2014, Apple announced that its latest iPhone would encrypt all data on the device when a password was set, a move Google vowed to match with its forthcoming Android mobile phone operating system. These are important steps forward in minimizing smartphone security risks, but given that 40 percent of users don’t even use a password on their mobile phones at all, Tim Cook was right: much more education and awareness are needed. Taking a Byte out of Cyber Crime: Education Is Essential Civilization is in a race between education and catastrophe. H. G. WELLS We have a literacy problem in the United States and around the world, and it’s not the one most think of. It is the problem of technical literacy. In a world replete with gadgets, algorithms, computers, wearables, RFID chips, and smart phones, only a minute portion of the general population has any idea how these objects actually work. Whether it’s Crime, Inc. or the NSA, those who know how to code will hold power over those who don’t in the same way that those who could not read and write in the last centuries found their opportunities limited.
While much less common, malicious apps have also been found in Apple’s App Store. Although the Apple iOS ecosystem is tightly regulated and controlled, many users find the environment too stifling. When they initially purchase their products, iPhone users cannot customize their keyboards, change their default browsers, manage files locally, or add widgets to their home screens—all features standard in Android. To get around these limitations, many users “jailbreak” their iOS devices, using specialized software to hack their own mobiles in order to obtain root administrative access to phones and control over features locked down by Apple. Jailbreaking an iOS device allows users to gain access to thousands of software programs not officially approved by Apple. Nearly ten million iOS devices have been jailbroken, and their users have turned to third-party app stores like Cydia to download their apps.
3D printing, Airbnb, Albert Einstein, Berlin Wall, Black Swan, Chuck Templeton: OpenTable, clean water, collapse of Lehman Brothers, creative destruction, Credit Default Swap, crony capitalism, crowdsourcing, Danny Hillis, declining real wages, demographic dividend, Elon Musk, en.wikipedia.org, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, follow your passion, game design, housing crisis, Hyman Minsky, industrial robot, invisible hand, James Dyson, Jane Jacobs, Jeff Bezos, jimmy wales, John Gruber, John Markoff, Joseph Schumpeter, Kickstarter, lone genius, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, new economy, Paul Graham, Peter Thiel, QR code, race to the bottom, reshoring, Richard Florida, Ronald Reagan, shareholder value, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, six sigma, Skype, Steve Ballmer, Steve Jobs, Steve Wozniak, supply-chain management, Tesla Model S, The Chicago School, The Design of Experiments, the High Line, The Myth of the Rational Market, thinkpad, Tim Cook: Apple, too big to fail, tulip mania, We are the 99%, Y Combinator, young professional, Zipcar
Each app allows consumers to “personalize” their access to Apple and interaction with other users. And the recent addition of Siri adds a new sense (voice) to touch and vision, re-creating a part of that face-to-face dimension so important in Benjamin’s account of ritual aura. What Apple has done (and what Google and Facebook are trying to do) is involve the individual customer and wider community in an open-ended process of creating. But, of course, a company cannot live on what it’s already created alone. It has to continually maintain the aura of its products to keep the company going and support its creativity. We have recently seen a spate of what seemed to be innovative companies fail in maintaining that aura in their products, and there is no guarantee that Apple will succeed despite Jobs’s assurances that his successor, Tim Cook, understands the need to have goals that transcend simply making a profit.
But the technology of our time—their improved features and lowered costs, their ability to make us all creators and not just passive users—can, in fact, connect people in ways that the films or photographs of seven decades ago could not. As with many of the Creative Intelligence competencies, the road leads back to Apple. Consumers call Apple products “cool” and “easy to use,” and more sophisticated business analysts applaud Apple’s “ecosystem” of integrated software and hardware. But none of those qualities alone explains why we feel the way we do about Apple products; it’s impossible to discuss Apple products without mentioning how they feel in the hand, look to the eye, and connect to our deep emotions. The story of how Apple began creating beautiful, easy-to-use products should be required reading for anyone interested in creating something that’s not just useful but meaningful. WHEN STEVE JOBS RETURNED TO Apple in 1997, after twelve years in exile, he bet the company and his future on a radical new idea: an easy-to-use, stand-alone PC that looked unlike any other computer before it—translucent, colorful, fun.
; http://designmuseum.org/exhibitions/ online/jonathan-ive-on-apple/imac-1998, accessed September 5, 2012; Janet Abrams, “Radical Craft/The Second Art Center Design Conference,” http://www.core77.com/reactor/ 04.06_artcenter.asp, accessed September 5, 2012. 187 Ive then spent yet more: Burrows, “Who Is Jonathan Ive?” 188 They also designed a beautiful: Neil Hughes, “Book Details Apple’s ‘Packaging Room,’ Steve Jobs’ Interest in Advanced Cameras,” Apple Insider, January 24, 2012, accessed September 5, 2012, http://www.appleinsider.com/ articles/12/01/24/book_details_apples_packaging_ room_interests_in_advanced_cameras_.html; Yonu Heisler, “Inside Apple’s Secret Packaging Room,” Network World, January 24, 2012, accessed September 5, 2012, http://www.networkworld.com/community/ blog/inside-apples-secret-packaging-room. 188 The iMac’s launch in 1998: http://www.youtube.com/watch?v=0BHPtoTctDY, accessed September 5, 2012; http://designmuseum.org/design/jonathan-ive, accessed September 5, 2012; John Webb, “10 Success Principles of Apple’s Innovation Master Jonathan Ive,” Innovation Excellence, April 30, 2012, accessed September 5, 2012, http://www.innovationexcellence.com/blog/2012/ 04/30/10-success-principles-of-apples-innovation-master-jonathan-ive/. 188 In a 2006 interview with Peter Burrows: Burrows, “Who Is Jonathan Ive?”
The Age of Stagnation by Satyajit Das
9 dash line, accounting loophole / creative accounting, additive manufacturing, Airbnb, Albert Einstein, Alfred Russel Wallace, Anton Chekhov, Asian financial crisis, banking crisis, Berlin Wall, bitcoin, Bretton Woods, BRICs, British Empire, business process, business process outsourcing, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Clayton Christensen, cloud computing, collaborative economy, colonial exploitation, computer age, creative destruction, cryptocurrency, currency manipulation / currency intervention, David Ricardo: comparative advantage, declining real wages, Deng Xiaoping, deskilling, disintermediation, Downton Abbey, Emanuel Derman, energy security, energy transition, eurozone crisis, financial innovation, financial repression, forward guidance, Francis Fukuyama: the end of history, full employment, gig economy, Gini coefficient, global reserve currency, global supply chain, Goldman Sachs: Vampire Squid, happiness index / gross national happiness, Honoré de Balzac, hydraulic fracturing, Hyman Minsky, illegal immigration, income inequality, income per capita, indoor plumbing, informal economy, Innovator's Dilemma, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, labour mobility, light touch regulation, liquidity trap, Long Term Capital Management, low skilled workers, Lyft, Mahatma Gandhi, margin call, market design, Marshall McLuhan, Martin Wolf, Mikhail Gorbachev, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, oil shale / tar sands, oil shock, old age dependency ratio, open economy, passive income, peak oil, peer-to-peer lending, pension reform, Plutocrats, plutocrats, Ponzi scheme, Potemkin village, precariat, price stability, profit maximization, pushing on a string, quantitative easing, race to the bottom, Ralph Nader, Rana Plaza, rent control, rent-seeking, reserve currency, ride hailing / ride sharing, rising living standards, risk/return, Robert Gordon, Ronald Reagan, Satyajit Das, savings glut, secular stagnation, seigniorage, sharing economy, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, sovereign wealth fund, TaskRabbit, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, the payments system, The Spirit Level, Thorstein Veblen, Tim Cook: Apple, too big to fail, total factor productivity, trade route, transaction costs, unpaid internship, Unsafe at Any Speed, Upton Sinclair, Washington Consensus, We are the 99%, WikiLeaks, Y2K, Yom Kippur War, zero-coupon bond, zero-sum game
In a parallel development, superstar managers increased their earnings. Between 1979 and 2005, around 70 percent of increases in income accrued to the top 0.1 percent of workers. In the 1950s, the average US chief executive officer was paid around twenty times the typical employee. Currently, the pay ratio of a CEO to an average employee is in excess of 200 times. In 2011, Apple CEO Tim Cook was paid US$378 million in salary, stock, and other benefits, over 6,000 times the earnings of an average Apple employee. At Walmart, the CEO earned 900 times the earnings of a typical worker. Deregulation, incentive-based remuneration, the use of equity options, managers’ bargaining powers, and their ability to convince remuneration committees of a shortage of talent all boosted compensation packages. Interlinked boards of directors (often former or current CEOs), consultants, and other insiders approved each other's pay, in a display of corporate solidarity.
While it helped improve living standards in emerging nations, the influx of around 1.5 billion additional workers into the global economy reduced the bargaining power of employees in developed markets, ushering in declines in real wages. Ironically, China's new socialism did not unite the workers of the world, but divided them, triggering “the profoundest global reshuffle of people's economic positions since the Industrial Revolution.”4 Automation increased both corporate profits and income inequality. Apple's ubiquitous i-gadgets consist of components made in multiple countries and assembled in China, with the supply chain being managed in the US by Apple, which earns around 30–50 percent of the final price. The process favors skilled labor, reducing the share of revenue accruing to low-skilled workers. Similar complex and fragmented production processes apply to the products that constitute around 85 percent of global GDP. This approach has created a rising wage premium for skilled labor and a growing number of poorly paid, insecure, low-skilled jobs.
This reflected a lack of investment opportunities and caution about future business and financial market conditions. By 2014, total cash balances worldwide were as much as US$7 trillion, roughly double the level of ten years earlier. American corporations held over US$1.7 trillion in cash. The five largest hoarders alone held around half a billion dollars in cash. Technology firms held around US$690 billion in cash, roughly double the levels of five years ago. Apple alone held over US$170 billion. Over 60 percent of this cash was held abroad. Interestingly, the large cash balances coexisted with elevated overall corporate debt levels. Many corporations borrowed at home to fund their spending, taking advantage of low interest rates and avoiding paying taxes on repatriated overseas profits. Inflation requires imbalances between demand and supply. Many developed economies had a significant output gap—the amount by which the economy's potential to produce exceeds total demand—reflecting lower demand and excess capacity, though the extent was uncertain due to lower labor participation, which reduced the theoretical output.
3D printing, additive manufacturing, Airbus A320, Albert Einstein, Amazon Web Services, Any sufficiently advanced technology is indistinguishable from magic, asset-backed security, augmented reality, barriers to entry, bitcoin, bounce rate, business intelligence, business process, business process outsourcing, call centre, capital controls, citizen journalism, Clayton Christensen, cloud computing, credit crunch, crowdsourcing, disintermediation, en.wikipedia.org, fixed income, George Gilder, Google Glasses, high net worth, I think there is a world market for maybe five computers, Infrastructure as a Service, invention of the printing press, Jeff Bezos, jimmy wales, London Interbank Offered Rate, M-Pesa, Mark Zuckerberg, mass affluent, Metcalfe’s law, microcredit, mobile money, more computing power than Apollo, Northern Rock, Occupy movement, optical character recognition, peer-to-peer, performance metric, Pingit, platform as a service, QR code, QWERTY keyboard, Ray Kurzweil, recommendation engine, RFID, risk tolerance, Robert Metcalfe, self-driving car, Skype, speech recognition, stem cell, telepresence, Tim Cook: Apple, transaction costs, underbanked, US Airways Flight 1549, web application
Figure 1.2: Technology adoption rates over the last 100 years Ultimately new technologies and initiatives such as the iPod and Facebook are now being adopted by consumers en masse in a period measuring months, not years. To illustrate this shift, Apple sold more iOS devices in 2011 alone than all the Macs it had ever sold in the 28 years prior. “This 55m [iPads sold to-date] is something no one would have guessed. Including us. To put it in context, it took us 22 years to sell 55 million Macs. It took us about 5 years to sell 22 million iPods, and it took us about 3 years to sell that many iPhones. And so, this thing is, as you said, it’s on a trajectory that’s off the charts . . .” —Tim Cook, Apple CEO during February 2012 reporting call Apple then sold more iPhone 4S devices in fiscal Q1 of 2012 than in the preceding 12 months. As we become more used to technology and innovation, it is taking us less time to adopt these technologies in our lives, and this further encourages innovation and thus increases the impact on business (which has less time to adapt).
However, the meet-and-greet component is important in providing a strong initial service offering, an appearance as a brand with the wish to engage the customer. Genius Bars and Pods Apple has been famous for its “genius bar” concept built into its Apple Stores. As per Apple’s own description, the Genius Bar gives high-touch technical support to Apple customers: “When you have questions or need hands-on technical support for your Mac, iPad, iPod, Apple TV, or iPhone, you can get friendly, expert advice at the Genius Bar in any Apple Retail Store. The Genius Bar is home to our resident Geniuses. Trained by Apple, they have extensive knowledge of Apple products and can answer all your technical questions. In fact, Geniuses can take care of everything from troubleshooting problems to actual repairs.”12 Banks are trying to replicate this concept by turning to having specialist advisors roam the floor, ready to engage in a wide range of technical and product discussions.
Does the most excellent “store” experience drive them back to the store repeatedly over time? No. The average Apple Store makes approximately $34m in revenue annually, with $8.3m in operating income. However, if you examine the 10-K filing for Apple, revenue is split almost 50/50 between online and device-based store sales, and its retail presence split between resellers and its own stores.6 Since the Apple “App Store” opened on 10 July 2008, Apple has booked close to $6 billion in revenue just on apps.7 Cyber Monday is used as the benchmark for US online and mobile retail sales, and figures show that iPhones and iPads account for 7–10 per cent of all online sales activity on those days.8 What we know from all the data is this: Customers might start their relationship with Apple in-store, but they don’t have to, and increasingly they’re actually choosing not to.
Drink: A Cultural History of Alcohol by Iain Gately
barriers to entry, British Empire, California gold rush, corporate raider, delayed gratification, Deng Xiaoping, Edward Lloyd's coffeehouse, Fellow of the Royal Society, Gordon Gekko, greed is good, Haight Ashbury, Hernando de Soto, imperial preference, invisible hand, joint-stock company, Louis Pasteur, megacity, music of the spheres, Norman Mailer, Peace of Westphalia, refrigerator car, Ronald Reagan, South Sea Bubble, spice trade, strikebreaker, the scientific method, Tim Cook: Apple, trade route, traveling salesman, Upton Sinclair, V2 rocket, working poor
., p. 65. 356 “From that December day in 1913”: Kobler, p. 201. 357 “comparatively few alcoholics”: John Barleycorn, or Alcoholic Memoirs (1913), Jack London, Signet Classics edition, New York, 1990, p. 17. 357 “let me warm by their fires”: Ibid., p. 36. 358 “talked with great voices”: Ibid., p. 37. 358 “All the no-saying and no-preaching”: Ibid., p. 115. 358 “The trouble I had with the stuff ”: Ibid., p. 202. 358 “The only rational thing”: Ibid., p. 115. 27 IN THE CHALK TRENCHES OF CHAMPAGNE 360 “the individual man is in all cases free”: “Rum in the Trenches,” Tim Cook, Legion Magazine, Defence Today, September/October 2002. 360 “It surprises me when”: Memoirs of an Infantry Officer, Siegfried Sassoon, Faber and Faber, London, 1997, p. 18. 360 “Under the spell of ”: Cook. 361 “to take the taste of dead men”: Ibid. 361 “The gas was phosgene”: Williams, p. 187. 361 “the ‘No Rum Division’”: Sassoon, p. 122. 361 “estaminets”: Her Privates We, Frederic Manning (1929), Serpent’s Tail edition, London, 1999. 362 “We have the right to get”: Under Fire, Henri Barbusse (1916), Penguin Classics edition, Trans.
Among the number of common brewers was Captain Robert Sedgwick, perhaps the first man to grow rich out of brewing in America. In 1637 he “set up a brew house at his great charge, & very commodious for this part of the countrey.” The drinks list in New England was supplemented by cider, whose manufacture grew to be a cottage industry, analogous to ale brewing in medieval England. Indeed, the drink came to be identified with the place—fermented apple juice 16 was more American than apple pie. The first orchard in Massachusetts was planted in 1623 by William Blaxton—an eccentric clergyman, who for a number of years was the only English resident of Boston—on his farm on Beacon Hill. Cider orchards were also planted in Virginia and in New Amsterdam, an American settlement founded by the Dutch, in imitation of their English Protestant cousins. The pilgrims had planned their colony while in Holland and had sent there for their families and friends once they had established a modus vivendi in New England, so that the Dutch had as good a picture of their progress as the English.
Once they had possession of Manhattan, the Dutch completed their fort, whose southern limit was marked by Wall Street, and laid out farms. They were as fond of their booze as the English, and in 1632 their West India Company built a brewery on a lane that became known as “Brouwers Straet.” They also planted vineyards, gathered wild hops from the woods, and Peter Stuyvesant, who became governor in 1647, cultivated cider apple trees imported from Holland on his farm in what is now the Bowery district of Manhattan. As had been the case with other European settlers in North America, the Dutch noted that the Indians with whom they traded for land and furs had no prior acquaintance with alcoholic drinks. In his Description of the New Netherlands (c. 1642) Adriaen van der Donck observed that while the local tribes drank fresh grape juice, “They never make wine or beer.