Can Apple Be ‘Insanely Great’ Again? This Journalist Says Maybe Not

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While claims that Apple (NASDAQ:AAPL) lost its innovative touch with the death of Steve Jobs are not raining down as hard on the iPhone maker as they were last year — when the company’s stock was slipping hundreds of dollars from its all time high — the criticism has not disappeared; nor is it an entirely invalid conclusion to argue that Apple has not released an innovative product since the death of the company’s co-founder. That is the central thesis to the book Haunted Empire: Apple After Steve Jobs by Yukari Iwatani Kane, the Wall Street Journal’s former Apple beat reporter. But it has been postulated that the criticism may be too narrow.

In an interview of Kane at South by Southwest — the annual music, film, and interactive conference and festival held in Austin —  Wall Street Journal editor Geoffrey Fowler explored the driving themes of her Apple analysis. As Kane explained in the interview, a summary of which was published by Barron’s, she initially planned to focus on the turnaround that Jobs orchestrated after his return to Apple in 1997, first as an adviser and then as the “de facto head” of the company. But his death changed her reporting.

“A year after I started working on the book, it became clear the real story was how the company was coping with the passing of someone whose identity was so tied into the company,” she said. In her opinion, Apple cannot remain great “if they don’t redefine what great is.” She told Fowler that as long as the definition of great remains “intertwined with Steve’s definition of great, which is to make insanely great products, the company will find it hard to stay great. Everything at Apple has changed because Apple was Steve and Steve was Apple,” she told Fowler. “And so this company has lost its center.”

Yet, Barron’s Tiernan Ray argued that Kane’s thesis contained some “very recent misconceptions” about Steve Jobs and Apple. “Much of this analysis seems to reflect Kane’s recent scoops reporting without a broader perspective. Jobs didn’t make “vision” statements of the kind Kane suggests. Companies that do that are IBM, Cisco, HP, etc. Jobs & Co. came out with products. And then after the fact, Jobs might offer thoughtful, articulate remarks about a general philosophy,” Ray wrote. “Also, the hand-wringing about Apple posits that the company came out with new ‘categories’ of product every day. There was a six-year gap between the introduction of the iPod and the introduction of the iPhone. Kane falls prey to the kind of image of Jobs as infallible, whereas many things happened under his watch that people at the time ridiculed or dismissed.”

Kane’s tenure as an Apple beat reporter began the fall of 2008 and continued through Jobs’s resignation as the company’s chief executive officer in 2010, after which she left the Journal to begin her book. During that time, she broke stories on the Jobs’s liver transplant and the possibility of a cheaper version of the iPhone. Given the secrecy with which Apple typically guards its inner workings, it was suggested she might be a conduit for friendly leaks from inside the company. But she has maintained that her information was obtained through “good shoe-leather reporting,” as CNN’s Fortune noted. Whether Kane had friendly sources becomes relevant when considering Ray’s criticism of her thesis and his claim that her book reflects the image of Jobs as an infallible leader and innovator.

That image of Jobs dominated the October 2011 obituary she wrote along with Fowler for the co-founder of Apple — as it should. She drew attention to his unparalleled influence on the tech industry, writing that, “During his more than three-decade career, Mr. Jobs transformed Silicon Valley as he helped turn the once-sleepy expanse of fruit orchards into the technology industry’s innovation center. In addition to laying the groundwork for the industry alongside others like Microsoft Corp. co-founder Bill Gates, Mr. Jobs proved the appeal of well-designed products over the power of technology itself and transformed the way people interact with technology.”

She also described his design genius with, “Mr. Jobs’s pursuit of aesthetics sometimes bordered on the extreme. George Crow, an Apple engineer in the 1980s and again from 1998 to 2005, recalls how Mr. Jobs wanted to make even the inside of computers attractive. On the original Macintosh PC, Mr. Crow says Mr. Jobs wanted the internal wiring to be in the colors of Apple’s early rainbow logo. Mr. Crow says he persuaded Mr. Jobs it was an unnecessary expense.”

In support of her thesis that Jobs’s death has profoundly impacted Apple’s performance, a piece Kane wrote for the New Yorker drew a parallel with how the company functioned after Jobs was replaced as the chief executive. “When Jobs was ousted in 1985, the impact of his absence on Apple’s business was not immediately obvious. After a slow start, Macintosh sales began rising. Two years after Jobs left, Apple’s annual sales had almost doubled compared to three years earlier, and its gross profit margin was an astonishing fifty-one per cent. Outside appearances suggested that Apple hadn’t missed a beat,” Kane wrote. “Inside Apple, employees knew differently. Something had changed. ‘I was let down when Steve left,’ Steve Scheier, a marketing manager at Apple from 1982 to 1991, recalled. ‘The middle managers, the directors, and the vice presidents kept the spirit alive for a long time without his infusion, but eventually you start hiring people you shouldn’t hire. You start making mistakes you shouldn’t have made.’ Scheier told me that he eventually grew tired and left. The company had ‘become more of a business and less of a crusade.’”

When asked by Fowler whether she was an Apple lover or hater, Kane answered that she was neither. “I am a journalist. I observe, I challenge.” Barron’s then noted she does work on an Apple Mac and owns an iPhone and an iPad.

Walter Isaacson, author of Steve Jobs, called Kane’s Haunted Empire: Apple After Steve Jobs “one of the most important business stories of our time,” in his review of the book. “Kane brings us inside Apple at this critical moment with great insight and unparalleled reporting.” While Ray’s criticism rings true, it is undeniable that Steve Jobs made Apple the technology giant that it is now. Further, Kane’s interview with Fowler indicates that the book contributed to the business world’s understanding of how Apple now functions under the leadership of Tim Cook, who never responded to Kane’s emails asking for comment, according to Barron’s. 

Fowler pressed Kane to explain what makes Cook a different leader from Jobs and what different leadership means for the company. A great concern is that she “still” does not know what his vision is. “He would say he is doing what he thinks he should do, not what Steve would do, but I’m still waiting for it.” She also noted that Cook does not have the same powers of persuasion. Jobs had the ability to mesmerize audiences by charismatically creating a “reality distortion field,” a science fiction term that has been used to describe his belief that wanting and willing something could make it happen. The fact that Cook does not have the same powers is “one of [Apple’s] big problems,” because the “issue that perception was always a big part of the magic with Apple,” she said. “Jony Ive still has the product videos, he talks about the wonderful things. I think that message is starting to ring hollow as well.”

Kane thinks that Apple now “needs to decide for itself what it wants to be. Apple risks being that small, expensive niche player again. The best technology can be mainstream, but not if you don’t care about market share. They say they don’t care about the low end. I think it is dangerous to assume the low end will always stay cheap.” While she acknowledged that Apple’s best days are not necessarily in the past, she hammered the point that a company cannot have “somebody as larger than life as Steve Jobs and lose him and get even better, because the way human nature works.” For Apple’s best days to be ahead, she believes “Tim Cook needs to be a better leader, to be more of a superstar than Steve Jobs, more iconic.” But Apple has recovered before and “they could do it again,” Kane concluded.

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