No Jobs at Apple, Inc.?

To be or not to be, that is the question! Will Apple survive the absence of Steve J0bs?

Before I share my thoughts on this topic, I’d like to mention that the timing of the announcement was superb; only Apple could have done it.

I’m sure this has been in the works for some time, and it is possible that because of his poor health, SJ did not show up in NYC for the launch of the Verizon iPhone. It has also been rumored that of late, he has been coming to 1 Infinite Loop only about twice a week, having lunch in his office rather than at the company cafeteria, etc. It is quite probable that Tim Cook has been running the entire Apple operations, behind the scenes, for some time.

Announcing his indefinite medical leave on a stock market holiday in the US gave investors time to mull over the impact of Apple without SJ, and with Tim Cook running the company. While Apple stock in foreign markets dipped almost 10% on the day of the announcement, it was down only by less than 2% in the US at the end of the first post-announcment trading day. I have no doubt it will regain its value soon.

The timing was also perfect as it was the day before the 2011 Q1 results announcement, where Apple was supposed to blow past the WS expectations, and it did.

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Would Apple be the same without SJ? Probably not. Would AAPL sink or not grow as much as it has been in the recent past? Also, probably not.

SJ is the kind of individual who appears amongst us only once in a long while. The greatest genius of SJ is his instinct to foresee the needs of consumers down the road, even when they themselves, or Apple’s competitors, may not be aware of it. As SJ himself said, it is better to be where the puck (of ice hockey) is going to be, than to be where it is now.

iPad is a good example. In 2005, Bill Gates announced that within the next five years, most of the computing would be done on tablets, but his wish wasn’t granted. It took SJ, and Apple, to create a third mode of computing while the mobile computing (in laptops and netbooks) was still flourishing, despite being criticized for creating just a bigger iPod Touch which is not capable of replacing the PC. The sales were predicted to be dismal.

Besides his vision, SJ is also a charismatic speaker, and his passion for his products is obvious. In addition, the attention to detail he gives to these devices as well as the quality of Apple’s merchandise gives confidence to the buyer. As of now, while Mac is only 9% of the entire PC market (used to be 2-3% in 1990s), it commands 90% of the $1000 and above segment.

In mid-1990s, an AAPL share used to be in single figures, and the company’s annual earnings less than what they are every quarter now. The stock is trading over $300 now and Apple is the biggest tech company in the world, and the second firm largest in the US, with a market cap over 300B.

iPod is another great example of his foresight and tenacity. The criticisms of it were greater than of the iPad. Who’s going to spend $400 to buy a MP3 player? Even though the sales have dipped a shade over the last year, the iPod is still in the lead, capturing over 70% of the MP3 player market.

But the iPod story also shows us a side of SJ that will be hard to replace: his negotiating skills. Only SJ could have managed the coup de theatre that had the music industry agree to sell single songs, rather than only albums, on iTunes for 99¢ each. Later, they dropped the DRM requirements as well. Today, iTunes is the biggest store selling music and its sales top that of even the CDs. This coup de grace to the Big Albums could only have been given by SJ.

The other thing SJ is famous for is his ability to say no. When he came back to Apple in 1996, there were over two dozen models of Mac PCs; he slashed them to just four. This speaks of the confidence he has in his vision, and the sales of Macs have risen ever since. He also nixed the Newton, the granddaddy of all PDAs, although a lot of its technology was advanced to build touch-enabled devices like the iPhone and the iPad.

Finally, this confidence of saying no and flying against the wind has had a big impact on several industries, and has often changed them. As Henry Ford famously said that if he he had asked his customers, they would have wanted him to build a faster horse. The iPad and the iPod are obvious examples, but so is the iPhone.

Before 1997, when the iPhone debuted, all phones copied BlackBerry. Even the first Android was rumored to look like the BB8700. Since then, however, all phones try to look and behave like the iPhone. Flip phones that were all the rage, like the Motorola StarTac and Razr, are so passé now.

The iPhone changed the whole mobile paradigm. I remember having WiMo and Palm devices, and then the BBs. While they were great, the iPhone brought the whole new meaning to ‘mobile computing’ with a real mobile web browser and then apps. While Android is catching up fast, it still is behind the iOS eight ball. The first iPhone was about five years ahead of the competition, but is only about six months or so ahead of an Android device now. With Verizon carrying the iPhone now, however, I am sure the Android OS will suffer.

(An interesting aside: the Verizon homepage lists three kinds of phones they carry – the Feature phones, Smartphones and the iPhone! It was Google that wanted to call the Nexus a ‘Superphone’.)

Besides the iPhone, Apple has spurred on industries by being the first to use USB as their only I/O port and the first to use Wi-Fi in all their computers. It has also killed, by eliminating in it’s products, the floppy drives (both 5.25 and 3.5). All these, any many more changes, were met with initial resistance, but are industry standard now. I fear for the extinction of optical and hard drives in the next few years, as Apples discontinues their use.

Not widely known is his involvement with movies, another industry SJ changed. Having bought Pixar for a mere $10,000, its first animated movie – Toy Story – won accolades and awards. This was at a time when computer animation was in infancy and ignored. All of the movies from this studio have been box-office hits since. SJ even had Disney agree to have Pixar as a co-brand on all movies and merchandise. He is now Disney’s largest shareholder, owning 7% of the stock.

Certainly, it is not possible to have all these qualities is a single individual. However, I am certain that the executive bench at Apple have most of these qualities in committee. It is also certain that the company has been preparing for a succession for some time.

Furthermore, SJ is only the public face of Apple. He would not have succeeded without the industrial design genius of Johnny Ive or the inventory management expertise of Tim Cook. There are many others who add to complete the experience that is Apple. So Apple is prepared, IMO, to bear the brunt of SJ’s departure.

Nevertheless, while design, quality, and deliverance of new and exciting product may be assured from Apple going forward, with or without SJ, the biggest hit the company will take is the force of personality SJ brings to the negotiating table.This would be very important for Apple going forward as the company wrestles with media, print and video, to enlarge and solidify its ecosystem to provide for the iDevices and its foray into the living room with Apple TV and the rumored Apple HDTV.

In addition, no one else at Apple will have the authority and decisiveness to say no or yes to any major decision. Like the military, great corporations are not democratic.

Perhaps that is why SJ has retained the title of CEO while on medical leave, and has indicated that he will have a say in all tactical decisions at Apple, while Tim Cook runs the day-to-day operations.

All good things come to an end and it has been painfully obvious that companies deteriorate when founders leave, as it happened with HP and MS. On the bright side, there are companies, like Disney, which have maintained the vision and vigor of their founder.

Apple is now a big cap company but still acts like a startup. Companies like this don’t grow 71% year-over-year, as Apple has reported on the 18 January  Conference. In addition, SJ has been notorious at keeping teams small, about a hundred or so. That is why there are delays often, as the same teams work on all OSes, from iOS to OSX. However, this is good for the Mac platform as a whole, because the same people carry over experiences from one side to the other, unlike at MS.

The management structure at Apple will be studied in business schools for decades to come. There are never more than two or three layers of managers, so each worker has an easier time to share his idea/work with the top layer.

(Another interesting aside: Messrs. Hewlett and Packard introduced the concept of ‘coffee break’ to the American workplace. The idea was to have all levels of employees, from workers to managers, gather at one spot to share ideas; the company provided the coffee and doughnuts. Other H&P innovations: retirement plans, share in the company and flexible working schedule including work from home.)

It is a surprise that a $300B company employs only about 50,000 workers worldwide.

In conclusion, I see no danger to Apple or AAPL in the short or medium term. Who knows where we will be in 10 years?

Let’s Party?

It would be quite refreshing to have Tea Party candidates win in hordes and bring the change to Washington they have been talking about. The first casualty of such a win would be Mitch McConnell; the replacement, Jim DeMint, would be further polarizing, making DC even more fun to watch. The tone of the GOP will change from NO to NEVER.

Consider:

  • Christine O’Donnell introducing a bill that legally treats masturbation as adultery, with similar penalties. If that brings the government into our bathrooms, so be it.
  • Rand Paul introducing a bill that would exempt private businesses from the Civil Rights Bill. There will be separate sections for Blacks, Whites, Asians and Latinos at Denny’s.
  • Sharron Angle introducing 3 bills: for the US to pull out of the UN, declare the Department of Education unconstitutional, and a provision to provide massages to the incarcerated.
  • Carly Fiorina introducing a bill to bring back the jobs she outsourced while the CEO of H-P.

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Then there are Governor’s races:

  • Carl Paladino, if elected, would introduce a bill to make bestiality legal, as long as the animal and human are not of the same gender.
  • Meg Whitman, if elected, will try to make legal the hiring of undocumented workers, as long as they are doing menial tasks not cherished by Americans, and that these laborers are paid using PayPal.

GOP should control The Hill?

I believe that Democrats should lose control of the House and Senate this election cycle; it will be good for them. Sometimes a forest has to burn down to reinvigorate itself. Hopefully, the two years in wilderness will force them to develop more spine and balls. Although it is hoping against hope; the Democratic Party is not one, but a conglomeration of  several political philosophies covering the entire spectrum from liberal to conservative. The GOP, on the other hand, is uniquely individual in its mindset: very conservative, the only variation being the ultra-conservative, far-right faction.

Talking of spine, the Obama Administration and the Democratic Congress has achieved more than any other presidential term in recent history. Yet, they are afraid to advertise the gains made and explain to the public how it will better their lives.

That a healthcare insurance company is mandated to not turn down individuals for pre-existing conditions, that mid to large businesses are forced to offer health insurance to its employees and persons who can afford it are provided assistance for purchase, and that there would be no life-time maximums for any illness so one doesn’t go bankrupt under treatment are all part of a much needed reform of the predatory practices of the healthcare insurance industry. It would have been hard for Republican candidates to argue why do they want to take these benefits from Americans.

The only thing that bothers me is that the Democrats diluted the whole Healthcare Reform bill to appease Republicans, and yet, none of them voted for it anyway. Since this bill had to pass with only Democratic votes, why didn’t they follow though with their original agenda that included the public option. They would not have been any more unpopular with the segment of the populace that is now threatening to unseat them from power, but in doing so they would have acted with conviction and would have changed the country for the better. But this take balls.

The same is with the Financial Reform that received little GOP support despite it being watered down. Despite it having many helpful features still, it would have been far more effective had the Democrats stood their ground. The credit card reform and the creation of a consumer protection agency alone are very useful provision of the bill, but I haven’t seen Democrats crowing about it.

Other achievements such as increasing the student loans and removing the middle-men (banks) from the picture and enhancing fundings for research institutions like the NIH are left unmentioned.

Why don’t the Democrats explain to us the necessity of the TARP in preventing a complete economic meltdown? After all, this program was started under a Republican administration, yet the brunt is being borne by the current Democratic setup for supporting it and following it through.

Poor Juan Williams?

Mr. Juan Williams was canned from NPR after making remarks about Muslims: “…when I get on the plane, I got to tell you, if I see people who are in Muslim garb and I think, you know, they are identifying themselves first and foremost as Muslims, I get worried. I get nervous.”

There has been a lot of protest from all shades of opiners, especially conservative. The right wingers are baying for blood; they want federal funding cut off for NPR. Sen. Jim DeMint, R-S.C., a member of the Senate Commerce Committee that oversees the Corporation for Public Broadcasting, said he would introduce legislation to halt taxpayer contributions to public media, charging that, “With record debt and unemployment, there’s simply no reason to force taxpayers to subsidize liberal programming they disagree with.” (emphasis mine)

As an aside, this emotional outburst by Republicans is nothing new, but has not succeeded in the past; it does score good political points to the fervent right-wing base. (Even when the GOP controlled both chambers of Congress and the White House back in 2005, a move to defund them failed after 87 House Republicans broke ranks and voted to reinstate money that had been stripped in committee: Time blog)

Rick Ungar in the Forbes blog does make a reasonable point by comparing to this Williams’ affair to that of Ms. Sherrod: NPR acted too quickly.

Kelly Boggs of Baptist News says that “He was fired because he expressed his feelings…”

Well, Helen Thomas and Rick Sanchez were fired for similar reasons, recently; they were expressing their feelings. Where were these voices then? If Mr. Williams would have said that he feels uncomfortable at night when he’s alone and a black man is walking behind him, there would have been an uproar, demanding his resignation from journalism.

Perhaps the St. Petersburg Times TV/media critic Eric Deggans‘ contention that Williams’ dismissal appears to have been the end of a long process for NPR is on the mark: “NPR has been distancing itself from Williams for quite a while now, changing his title and reducing his role at NPR amid increasing discomfort over the views he has voiced as a pundit on Fox News Channel. Back in 2009, when Williams described first lady Michelle Obama of evoking the spirit of radical Black Panther Stokely Carmichael, NPR asked him not to use his identification with their organization on Fox News. They had already changed his title from correspondent — which implies an objective journalistic role — to news analyst, which allows opinionating.

To this media critic, Williams’ firing seemed the ultimate expression of that unease; his comments about Muslims were simply the final straw on a very overburdened camel.”

At least his firing from NPR has gained Mr.Williams a multi-million dollar contract from Fox!

But Why?

Dove World Outreach Center plans to burn the Koran for 9/11

Islamophobia or American Exceptionalism?

In an op-ed in the New York Daily News, Abdur-Rahman Muhammad* argues that “Whether or not Ground Zero mosque is built, U.S. Muslims have access to the American Dream”.

“Surveys have shown that Muslims in this country are above average in both education and living standards. They are living the American Dream. Nothing and no one can (or should) legally bar  them from what Abraham Lincoln called “the right to rise”.”

The influx of Muslims began in the mid-1960s, when the Civil Rights Legislation leveled the immigration quotas from all countries instead of  it being Euro-centric (as it was until then). This naturally included countries with large Muslim populations, as well. What is amazing is that these post-1964 immigrants, Muslims or not, have been able to achieve the American Dream within a generation or so; it had taken over two or three generations of previous émigrés to achieve the same feat.

“Muslims are everywhere in this country, doing practically everything. There are Muslim doctors, lawyers and businessmen – like Park51 developer Sharif El-Gamal, who went from waiting tables just a few years ago to being a multimillionaire. There are Muslim soldiers and CIA agents. Could this be possible if America were Islamophobic?”

Mr. Muhammad has asked a very pertinent question, which has only one answer. No. But why is there such a rancor and ado about the Cordoba project, apart from the fact that it is an election year?

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A large part of it is the distinctness Islām appears to have in the American psyche. Consider:

Until the mid-1960s, most of the immigration was from Europe. The modes of travel in those time were more treacherous and long; the new arrivals had no other choice to settle down in their new land, lose much of the touch with their old homeland, and assimilate. At the same time, these immigrants being white and Christian, it was also easier for them to do so. Nevertheless, all new migrants faced discrimination from the settled; ‘N.I.N.A.’ (No Irish Need Apply) signs dotted the store windows in the 19th century US. Today, the number of Irish-Americans is ten times the population of Ireland.

The world grew ever smaller after the 1960s, and in the past few decades it has become a ‘Global Village‘, thanks to the advances in transport and telecommunications. In the last 50 years, the world has changed much more than it changed in several centuries before. As a consequence, new immigrants in the latter half of the 20th century have been more connected to their countries of origin, both in travel and communication, and have a choice to retain many of their original customs, traditions and language longer than settlers before them had the luxury to do. This has impeded the need to blend-in with the local mores of the new country.

Moreover, these were people from all over the world, and not just Europe. In fact, European immigration to the US during this time actually declined. The result was a multi-ethinic, multi-religious stock entering America in huge numbers. This ‘Browning of America‘ created demographic shifts in the US and the increased number of different ‘minorities’. This further delayed their integration. In addition, it happened rather fast: the gradual change in the texture of the fabric of American culture that took place over a few centuries suddenly churned vigorously in just a few decades, threatening rip it apart.

There is no denying that xenophobes, bigots and nativists exist in the US, as they do in every country. However, something that appears alien is definitely more intimidating, even to an average, well-meaning person.

The onus therefore lies with the new immigrant, of any ethnicity or religion, to assimilate as soon as possible into the ‘melting pot‘ of these United States. Unfortunately, Muslims have been rather slow to do so, and not as fully, on average. Therein lies the crux of the issue with the Park51 mosque, even as there are “…approximately 2,000 mosques across America, of which many have adjoining schools.

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Regardless, no matter which side of the ‘Ground-Zero Mosque‘ debate one is on, it is comforting to know that “Barring difficulties in fund-raising, the Park51 project, the so-called “Ground Zero mosque” will be built. Despite the fact that roughly 70% of the American people oppose it, U.S. laws ensure that not even the project’s most bitter foes will be able to stop it.

This is American Exceptionalism.

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*Abdur-Rahman Muhammad is a Washington, D.C.-based writer. He is a Muslim who was once the Imam of a mosque. He now works to combat Islāmic extremism in the American Muslim community.

Sea of tomorrow?

On a visit to Australia in the 1980s, the Prime Minister told Tip O’Neill (the Speaker of the House during Ronald Reagan’s presidency), that “…the Mediterranean was the sea of the past, the Atlantic, the sea of the present and the Pacific the sea of tomorrow.”

The prophecy has come true. Pacific Ocean IS the prominent waterway where commercial sea-lanes traverse between the world’s factory, China, and the world’s mall, America.

However, as the bipolar world of the past (US and USSR) has led to the unipolar world (US) presently, a new world-order is taking place in the 21st century. It will be a multipolar world, with competing interests of the US, Russia, China, India and maybe even other countries like Brazil and South Africa.

Nicholas Burns, former undersecretary of state, in a review of a new book by Robert D. Kaplan, Monsoon, says “…the twenty-first-century balance of power in the world will rest, more than anywhere else, on the fortunes of China, India, and the United States in the Indian Ocean.

Mr. Kaplan argues that  “Like the monsoon itself, a cyclical weather system that is both destructive and essential for growth and prosperity, the rise of these countries (including India, Pakistan, China, Indonesia, Burma, Oman, Sri Lanka, Bangladesh, and Tanzania) represents a shift in the global balance that cannot be ignored. The Indian Ocean area will be the true nexus of world power and conflict in the coming years. It is here that the fight for democracy, energy independence, and religious freedom will be lost or won, and it is here that American foreign policy must concentrate if America is to remain dominant in an ever-changing world.

On Fareed Zakaria GPS (aired on 29 August, 2010), Mr. Kaplan summarizes his recent article in Foreign Affairs. The following passages are my reactions mixed in with Mr. Kaplan’s data and analysis:

China is blessed with temperate climate and a vast geography, extending to central Asia westwards, but also has a fifth of humanity to feed and enrich. What has gone unnoticed in the past decade is the rise of China as a seapower. It is coming in competition with India, which is also a rising seapower. China has started to build warm-water ports in Burma, Bangladesh, Sri Lanka and Pakistan. This is seen by many to encircle India in a ‘string of pearls‘ around India. The sea-lanes from the Persian Gulf to China cross the Indian Ocean.

A rising Chinese naval power will bump against the present occupant to its east, the US, which has troop presence in Japan, South Korea and the Philippines. The US also has presence in the Oceania (Guam, Palau, American Samoa, etc.) which will check Chinese expansion into the Pacific. So, China will aim to extend its influence in the Indian Ocean. Also, the rivalry between China and India, commanding the second and third largest global economies by 2025, will spill into the Indian Ocean.

While we cannot ignore China, and should encourage its cooperation, we must also encourage like minded countries lke Japan and India build their naval powers.

Obama has already shown that he understands this equations; Secretary of State Clinton’s first overseas trip was to Indonesia.

This will be the ‘Great Game’ of the 21st century, much like the one between the British and the Russian Empires in the 19th.

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