The Finance Kid

Beyond the Mac

Of course, the assorted tran­si­tions dur­ing Jobs’s reign as CEO weren’t con­fined to the Mac. Per­haps the great­est tran­si­tion Jobs ini­ti­ated was mov­ing Apple away from being just a soft­ware and com­puter maker and into the lucra­tive world of con­sumer elec­tron­ics. The shift became offi­cial in 2007 when Apple dropped the word “Com­puter” from its name, sim­ply call­ing itself Apple Inc.

The shift began with the iPod. When Apple unveiled its music player in the fall of 2001, the mar­ket for MP3 play­ers was in its early stages. Devices at the time relied on small amounts of flash mem­ory that could hold only a hand­ful of songs. In short, it was a field that was ripe for innovation—and inno­vate Apple did with the iPod. The device’s 5GB capac­ity gave it the stor­age space to, in Apple’s words, “put 1000 songs in your pocket.” And while not the first hard-drive-based dig­i­tal music player on the market—Creative’s Nomad series beat it to the punch—the iPod had some­thing going for it that no other com­pany could match: soft­ware inte­gra­tion. Though iTunes debuted ear­lier in 2001, it was with the iPod’s fall intro­duc­tion that the pieces clicked into place and Apple’s ecosys­tem started to take shape.

Still, at the time, the iPod met with heavy skep­ti­cism. Why was Apple, a com­puter com­pany, mak­ing a portable music player? “We love music,” Jobs said dur­ing the iPod’s intro­duc­tion. “And it’s always good to do some­thing you love.”

It proved to be lucra­tive for Apple, too. The com­pany has sold hun­dreds of mil­lions of iPods in the last decade, and though sales growth slowed and then declined in recent years, Apple con­tin­ues to enjoy a 70 per­cent share of the MP3 player mar­ket. Part of the rea­son for the device’s suc­cess? Apple’s repeated will­ing­ness to rein­vent the iPod line. Take 2005’s deci­sion to kill off the pop­u­lar iPod mini and replace it with the smaller, flash0based iPod nano. That kind of think­ing, utterly for­eign to most com­pa­nies, was sec­ond nature to Steve Jobs: Why not kill a prod­uct at the height of its pop­u­lar­ity if you’re going to replace it with some­thing even better?

Steve Jobs seemed to antic­i­pate the demand for the iPod from the get-go: “Music’s a part of everyone’s life,” Jobs said at the 2001 launch event. “Music’s been around for­ever. This is not a spec­u­la­tive mar­ket. And because it’s a part of everyone’s life, it’s a very large tar­get mar­ket all around the world.”

As it did with the iPod, Apple didn’t cre­ate a new prod­uct cat­e­gory with 2007’s iPhone intro­duc­tion. Smart­phones existed before Apple came out with its effort, with exist­ing devices aimed largely at busi­ness cus­tomers who wanted to check their email when they were out and about. Apple instead set its sights on the broader con­sumer mar­ket. It would appeal to the end user by inform­ing its device with the same sen­si­bil­i­ties it had used in the Mac: good design, ease of use, and a har­mo­nious mar­riage between soft­ware and hardware.

“Every once in a while a rev­o­lu­tion­ary prod­uct comes along that changes every­thing,” Jobs said at the 2007 Mac­world Expo keynote when he pulled the first iPhone out of his pants pocket. “One is very for­tu­nate if you get to work on just one of these in your career. Apple’s been very for­tu­nate. It’s been able to intro­duce a few of these into the world.”

That may sound like the kind of “real­ity dis­tor­tion field”-style hype that Jobs became famous for—and to some extent, it is. But it also hap­pens to be true. Look no fur­ther than how other smart­phone mak­ers responded—with devices that mir­rored the iPhone’s touch-screen con­trols, pow­er­ful Web browser, and array of third-party mobile apps. Where once every smart­phone had to have a phys­i­cal key­board, many now rely upon just a touch­screen; that’s a direct result of the iPhone’s influence.

Jobs closes out his tenure as Apple’s CEO by lead­ing the com­pany into what’s being billed as the “post-PC” era—a period in which mobile devices no longer need sync up with com­put­ers. It was with that vision in mind that Apple rolled out the iPad, which brings PC-style com­put­ing into a hand­held device. Launched less than two years ago, the iPad has already carved out a new mar­ket for tablet com­put­ing, with other com­pa­nies once again try­ing to keep pace with Apple. It also joins the orig­i­nal Mac, the iPod, and the iPhone among the rev­o­lu­tion­ary prod­ucts Jobs helped develop dur­ing his Apple career.

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