Macworld, the ultimate iFan event, was on last week at the Moscone Center in San Francisco. What used to be the main Apple event where Steve Jobs would introduce killer products like the iPod or the iPhone, is now an independent tradeshow for brands and merchants that gravitate around Apple's growing empire. The story tells that Apple's founder did not like losing control of the stage lighting and other aspects of the products launch. The big Apple event is now the WordWide Developper Conference event in June, also at the Moscone Center. The 2,500 tickets typically sell within a few hours.
Steve Jobs was a perfectionist at the border of arts and technology and was a control freak with his colleagues, as depicted by Walter Isaacson in his official biography. He is now part of the popular culture. The question today rather relates to the extent of Apple's control outside the company circle and its grip over a growing manufacturing empire. The New York Times gave insights in the world of the consumer electronics giant in a recent article analyzing how the US lost on the iPhone: behind its 63,000 employees, 700,000 workers assemble iPhones in China, and tens of millions of units shipped to customers worldwide last quarter.
The man at the top of the pyramid is now Tim Cook, a veteran in the high-tech industry who built an impressive just-in-time operations at Apple ove the year. Less public than his predecessor and former close collaborator, he was nonetheless celebrated in progressive publications as the most influential gay person in the world today. This information does not hold much weight to the record revenues of $46Bn last quarter that Tim Cook announced last week. Their profit per employee of $400,000 was higher than at Goldman Sachs. Would have Apple, once the innovative company going after "Big Brother" IBM, simply become The Man?
An incident a couple of years already attracted the irony from comedian John Stewart otherwise a big fan of Apple's products. After the site Gizmoto released in 2010 a video of the secret new iPhone 4 and the company acknowledged one of its employees forgot a prototype at a bar, the police raided on the appartment of the editor altough he had returned the device at once. It is true that the financial stakes attached with new iPhone releases have become monumental. But is it a reason for Apple to ask the police to investigate a mischeaving tech writer in the Palo Alto community that its founder used to embody best.
The paradox goes beyond this comparison. Apple once built its products in America but has in the last serveral years outsourced to Asia all its manufacturing and some of the engineering. The New Tork Times article reported poor working conditions at one of its contractors's site. As a matter of fact Foxxon got in trouble last year for a series of sucides and an increasing number of complaints on grueling labor conditions. Tim Cook quickly released a statement that Apple is increasing the number of audits on its suppliers. This follows an annoucement several weeks ago about Apple's new code of conduct on environmental impact.
Is Apple simply dealing with the downsides of highly succesful growth, or is the company hiding a culture that forces unreasonnable labor pratices outside its direct employees to improve its bottom-line? Apple's founder was focused on making "insanely great products" as opposed to short-term profits. This is something he reflected a lot after being bouted out of Apple by John Sculley in the mid eighties. Fan of Bob Dylan, he did not want to be associated with tradional corporate America but worked his way back by creating Pixar and selling NeXT to Apple.
His non-compromising attitude and repeated successes made Steve Jobs an icon. As I walked through Macworld booths I noticed a portrait of him alonside Michael Jackson and Marilyn Monroe. Before he passed away, Steve Jobs met with President Obama with other Silicon Valley executives. He explained that Apple could not find the properly trained engineers and workers that it needed to keep jobs in the US. Laurene Powell Jobs was indeed invited in the First Lady's box when President Obama talked to the Nation last week and insisted in improving the Education system and ease the immigration rules to get the right workers here in America.
The question becomes whether Apple has done much to assist Universities and Community Colleges to prepare the workforce it needs, like most corporations that sit on the Boards of College programs in other countries. Apple did release two weeks ago new features on tablets to simplify access to books at universities and make the curriculum more interactive and taylored to students. That is a good start but that is not enough. In comparison, Java developpers are heavily demanded today and Apple offers up to $10,000 in bonus to any employee making a referall that leads to a hire.
The company would rather fly and lodge a foreign engineer than train one person locally. Apple seems to treat workers like the rest of its operations, something that has to fall into place "just-in-time". Dormitories along Foxxon factories allow workers to be very reactive. The New York Times describes a million people indsutrial city. This is reminiscant of the industrial constructions in Germany between WWI and WWII. People lived their life at the rythme of the factories and children would hear the sirene twice a day.
Some of the organic concepts and beatnik movements that impacted Steve Jobs in the late sixties can be traced back to that time. The growing middle-class in Germany and Austria reacted then to this cold and difficult way of life, and this had much impacted on California after WW2 as immigrants came to the US from Europe. Some argue that China going through a natural phase of growth that will lead to more innovation and social progress like the US experienced in the past.
With a decreasing middle-class, the US may lose its social fabric to "produce" new innovators. I was not impressed by the level of innovation at Macworld. There were a lot of coll applications and an interesting convergence of arts, media and tech products. But I did not see an environment that will create good paying jobs in the US. Steve Jobs and Steve Wozniak came from middle income families who were educated and had manufacturing and engineering jobs. No big deal, but a solid environment that stimulated their prodigies of sons. If Steve Jobs did not complete college, he did benefit from a supportive environment that gave him opportunities.
There is no question that Apple today has reached a critical mass that HP, IBM and Microsoft faced in the past. It is challenging, and the company will continue to attract more scrutiny. Apple will be judged on how it gives back and managed to keep its culture of innovation. When Steve Jobs resigned from his position as CEO last August, one Board Member celebrated that HP had lost its way and lost its commercial battle with Apple. Walter Issaacson recounts in his book that Steve Jobs went to the defense of HP. He had got his first job at HP and he hoped that Apple would outlast him for generations as an innovative company.
To protect the company, Apple has signed up its key executives for 5 years with strong stock packages to keep the "dream team" in place after the loss of Steve Jobs. Insiders also mention that the company has several products in the pipeline already for the next 3-5 years. The company is unlikely to change in the near future. But will it last? If Apple is not The Man yet -- still putting products and consumers ahead of profits -- it is clearly becoming it slowly.
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