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08.24.11

Don't Bet Against Apple

Now that CEO Steve Jobs has resigned, can the world’s most powerful consumer technology company stay on top without its architect? Zachary Karabell on why you shouldn't count Apple out.

Let it be acknowledged that Apple, from which Steve Jobs has finally resigned as CEO after years of battling pancreatic cancer, is no ordinary company. It is the most powerful, successful, and innovative consumer technology company of our age.

That it is so a testament to Jobs, to his passion, his vision, his uncompromising mania, and his unwillingness to cede control. He has, by all accounts, been a difficult man to work with and for, and he has undoubtedly left many wounded employees in his wake. But he also has provided a ray of optimism about the power of technology to channel our collective energies for a better world. Cynics beware: Apple is the opposite of cynicism, and its success is a reminder that you can’t short your way to fortune and power. You actually have to create something.

The burning question, then, is, can this company continue to thrive in the absence of Steve Jobs? Is its success an emanation of him? And if so, is the future bleak? The answer to these questions is yes and no.

Apple has had two incarnations: one in the late 1970s through the mid-1980s, when a 20-something Jobs, along with his countercultural slacker Cupertino partner Steve Wozniak, created the quirky Apple computer, Apple II, and then the revolutionary Macintosh in 1984. The second incarnation came after 2000, when the company pulled out of its death swoon and reinvented not just the computer industry, but the music business, the phone, and now publishing and entertainment.

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In this March 2, 2011 file photo, Apple Inc. Chairman and CEO Steve Jobs waves to his audience at an Apple event at the Yerba Buena Center for the Arts Theater in San Francisco. Apple Inc. on Wednesday, Aug. 24, 2011 said Jobs is resigning as CEO, effective immediately. (Louie Psihoyos / Corbis)

Along the way, Apple lost Jobs, after a head butt with then-CEO John Sculley, in the late 1980s. And Jobs lost his own way with the failed NeXT computer experiment, though that did lay the foundation of a successful Mac operating system later on. By the late 1990s, as Silicon Valley soared, Apple was bleeding customers and was a sad legacy for its legion of faithful users, who believed it was a superior product to Windows-based PCs. Then Jobs returned in 1997, introduced the iPod in 2001, and 10 years later Apple is one of the two largest companies in the world by market capitalization (Exxon is the other), and its influence is immense.

Detractors have always said Apple invents little and appropriates a lot. They miss the point entirely. Apple under Jobs has been able to fuse function and form into a seamless web of aesthetically pleasing products that somehow manage to cater to individual hopes and aspirations. There are only a few brands that make people feel that they are smarter, cooler, and sexier than they are, and Apple trumps all of them. There was a hilarious YouTube video last year that mocked the iPhone as an inferior product to an HTC phone. Hilarious, but beside the point. No one buys an HTC and feels that they have enhanced their profile as a human being; yet that is what they feel when they use Apple products.

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Paul Chinn / San Francisco Chronicle-Polaris

You can mock the alchemy that Apple products produce. You can criticize the technology and the functionality. But you cannot escape the simple fact that hundreds of millions of people, faced with a multitude of choices, don’t agree with you.

Full disclosure: I am an Apple user but not an acolyte. I have MacBooks because they work better than most Windows PCs, but I still use a BlackBerry, am ambivalent about music quality on the ubiquitous iPod, and haven’t figured out what to do with an iPad other than give my sons more avenues to plunge into the matrix. But I appreciate the tectonic significance Jobs has had and that Apple possesses. It is a company to admire, and at a time when we have lost faith in politicians, lack trust in public institutions, and despair at the ability of the developed world to yank itself out of the declining fortunes, Apple stands as an icon of what the United States remains capable of.

Freed from the darker side of Steve Jobs’s need to control everything, those employees may find that the company is even more creative and even more potent.

In the financial world, Apple trades as a technology stock (and full disclosure again: I own a modest number of Apple shares—emphasis on modest). But it isn’t really a technology company. It is a consumer product and service company that sells people an ethos and an identity via a remarkably few number of products. In a world where choice proliferates, Apple offers four basic products: computers, phones, tablets, and music players. That’s it. Yet those devices allow people and companies to do most of what they do with their time: read, play, work, and relax. And Apple allows them to do so with devices that are elegant, even beautiful, and are seen that way by hundreds of millions of people—as if Jobs had somehow tapped a collective unconscious, a meme of technological beauty lodged in the collective human consciousness.

Oh come on, say the critics. It’s just a company making phones and touch pads. And Jobs was a control freak who cowed his executives and micromanaged everything down to the plastic covers on the iPads. But then again, how do you explain the ubiquity of these devices and what they allow people to do? Jobs had a knack for striking the deeper chords; just note the equally astonishing success of the other company Jobs helped create, Pixar.

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AP Photo

So can Apple continue this magical mystery tour now that Jobs will no longer be the architect? The negative case holds that because so much of Apple is an emanation of his own particular and undeniably tractionable vision, it cannot. One man, one company, and with him gone (albeit remaining as chairman as long as his health allows), it will become another company, and diminish. Even if Tim Cook, the new CEO, proves as able as he has been as acting CEO, the balloon will deflate. Because Jobs was a master of control—and no one would deny that his voice and his spirit have suffused the company even as it has become global and behemoth—it simply cannot survive his passing.

The positive case, however, rests on the same assumption. Because Jobs was a master of control, his vision suffuses the company and its nearly 50,000 employees. They have drunk the Kool-Aid, and few companies have morale as high, employees as driven, or customers as loyal and growing. The mark of a great company is not just a visionary and capable CEO but the degree to which that vision suffuses the entire organization. On that score, you have only to go into an Apple store to know that the person selling you an iPad is as feverish, opinionated, and focused on perfection as Jobs has been. And now, freed from the darker side of Steve Jobs’s need to control everything, those employees may find that the company is even more creative and even more potent.

Apple’s future is a litmus for America. Apple is a truly American company, emerging from that bizarre potent hybrid of Silicon Valley techno-geeks and the 1970s hippie counterculture that dreamed of the Age of Aquarius and a time when human potential would be unleashed and empowered by technology. It is for today’s American what General Motors was to the mid-20th century. Apple has thrived because there is still a potent force of optimism coursing through American society that the future can be better—and that force is amply in evidence in Beijing, Mumbai, and Rio. Tim Cook inherits that mantle, but so do we. It may be too soon to bet on it, but why would you bet against it?