Is Apple's success the result of luck or skill?

According to Forrester, Apple has finally reached the single milestone that could change the dynamic of the computing business for good: its U.S. laptop market share has reached 10.6 percent during the second quarter of 2008. Just one year ago, it captured just 6.6 percent of the same market.

Globally, Apple's market share is reportedly hovering at just about 3.3 percent--a far cry from its success in the United States--according to one report, but Net Applications places it closer to 5.5 percent. Which estimate is correct? You decide.

Either way, it illustrates an important point: Apple is successful, and its popularity is growing each day. Years ago, no one thought that Apple would survive another year, let alone capture 10 percent of any market. But today, it's sitting atop the technology industry, and companies in every major market are looking up.

But how did this happen? Is Apple's success in the computing market a by-product of Steve Jobs' insight and uncanny knowledge of what people want? Or is it pure luck, thanks to questionable moves by competitors and being in the right place at the right time?

Apple zealots would undoubtedly contend that Apple's success has nothing to do with luck, while Microsoft fanboys would argue against that point. In reality, Apple's success in the computing market is the by-product of both skillful positioning and a healthy dose of luck.

Here's why:

Skill
There's no debating the fact that Steve Jobs knows what he's doing. With each passing "Stevenote," I become more aware of just how sound his business sense is. I also get a sense of his uncanny ability to give customers what they want before any other company can.

When Jobs returned to Apple in the late '90s, he changed the company's focus to hardware and used software as the key driving factor behind selling that hardware. He made sure that Apple didn't license its operating system and abandoned its plans of copying competitors.

He realized that the industry was filled with derivative products that failed to address consumer desire. Armed with that knowledge, Jobs set out to improve Apple's operating system and create a different experience that would make people take notice. And because the company was so inconsequential at the time, Jobs knew all too well that few competitors would pay attention--a fortuitous by-product of failure.

From there, Steve Jobs led his company out of the doldrums to the position it's in right now. He understood and used hype as a means of promoting a product and reintroduced a shroud of secrecy that kept the press licking its chops.

In other words, Steve Jobs pressed all the right buttons and made everyone happy: shareholders, customers, the press, and his employees.

He also understood the power of convergence and branched out into other areas to make Apple more than a computer company, while still maintaining its drive to sell computers. After all, if people liked other Apple products like the iPod, wouldn't they want to own a Mac?

It was a well-calculated risk that paid off.

Luck
But all the credit can't be given to Steve Jobs. It should also be given to the poor management at Microsoft, Dell, Hewlett-Packard, and others. Those companies were complacent, focused on the wrong markets, and generally failed to realize that Apple was starting a movement that wasn't waiting for them to catch up.

Microsoft's biggest downfall since the return of Apple is Windows and its willingness to let it slip into the mud. Sure, it faced problems with XP, and eventually people came around, but do you really think that Vista would have been such a disaster a decade ago?

I don't. Bill Gates would have never let that happen back then.

In Microsoft, I see a company that's deathly afraid of Google and even more scared of being cornered out of the online space. And so in its desire to capture more search market share and gain a foothold in the advertising market, it forgot about Windows. It also forgot about Apple.

Meanwhile, Apple kept plugging away at creating a better experience and captured significant market share under Microsoft's nose. Yeah, I know, 3 percent to 5 percent isn't huge, but let's face it: given the number of computers in the wild, and considering Microsoft's dominance over vendors and retailers alike, gaining that much share is no small feat.

But Hewlett-Packard and Dell are just as guilty. Both companies were under the impression that Windows would be the savior, no matter what, and that computer design didn't matter. Sure, that may have been true years ago, when laptops were a pie-in-the-sky idea, but today, laptops are quickly becoming the toast of the town, and people are looking for devices that say something about them. And for quite some time, those consumers have been looking for beauty.

Apple has always understood that and does its best to make its computers more elegant than its competitors. HP and Dell are just waking up to that fact.

Worse, HP is just waking up to another fact: tying a business model to Windows isn't always the best move. In fact, the company is reportedly trying to get in on the operating-system business by developing a Linux-based system to offer its customers an alternative to Windows.

Thanks for waking up, HP. Where have you been for the past five years?

But a discussion about luck wouldn't be anything without mentioning the media. Go to any conference--major or otherwise--and count the number of Macs being used compared to the number of Windows-based machines. I'm willing to bet that 90 percent of journalists are using Macs.

Granted, computer choice shouldn't have an impact on coverage, but if the vast majority of press members are using Macs, doesn't that work in Apple's favor? Of course, some would surely say the only reason they use Macs is because "Apple computers are better for what they do," but I don't tend to agree. I can do this on my Asus Eee PC 1000H without a problem.

But because the press has fallen in love with Macs, everything is easier for Apple. It's a strange phenomenon, but people that start using Apple products have a sense of loyalty to them unlike any other computer brand. And it's that phenomenon that Apple uses to its advantage and what keeps the press coming back for more. And in turn, Apple's customers keep coming back for more too.

It's easy to say that Steve Jobs knows it all, if you're an Apple zealot, and even easier to say he knows nothing, when you hate Apple. But in reality, Apple's success is due to significant skill and a healthy portion of good luck.

To say otherwise is foolhardy.

Check out Don's Digital Home podcast, Twitter feed, and FriendFeed.

[benjaminstraight]

Skill.

[Matthew Hurst]

>>90 percent of journalists are using Macs<<

Turn the clock back to pre Jobs return when Apple was on the brink and this was case wasn't it? Apple has also been dominant player in print, journalism, advertising, graphics, video and media in general. That was never enough to keep them afloat and to keep people interested in Apple. It might not hurt, but it wasn't going to save them then and isn't the reason they are more popular now. The reason for their rise in the past decade can be found by merely looking at their successes within their product line. The iMac returned Apple to profitability and regained the attention of the computer buying public. It redefines the desktop computer. Sorry to sound like a fanboy, but it changed game. OSX ditto. iPod did the same thing, but this time outside the bounds of the Mac OS. Then the laptop. The Powerbook was the superior portable computer when it all began, then became a joke ("Hello, Apple tech support...My Powerbook is failing apart and it is on fire!") and then Jobs turned Mac laptops into jewels in the crown. Luck-sure. Hard word- of course. Taking advantage of your competitor's weaknesses-Apple is all over that. Bells, whistles & hype-no one does it better. But raising popularity because of more media coverage since more journalist use Apple products than anyone-not buying it.

[dd13reis]

Really? I think it makes a lot of sense (and thus, why I wrote it). The more journalists that use a Mac, the more they like them, the more they're willing to say nice things about them and get excited for follow-ups.

I don't think that's a stretch at all.

-Don

[Penguinisto]

There is one other aspect that got missed - Security pros. Look around at any large gathering of computer security professionals, and you find a boatload of Macs there as well. Funny thing is, it only correlates superficially w/ the journalist crowd; the security folks use 'em not because they're pretty, but because they don't get compromised anywhere near as often (as in: rarely if ever). ;)

[aztec92154]

Also, Mac runs UNIX under the hood. IT admins love this, and (at SDSU in particular) they require that you get the 3-year extended warranty through (DELL or APPLE). Its easier to just go with tons of Macs. Students like them, and our science professors who use Matlab, FORTRAN, ect prefer them. Need GCC? No problem. EMACs? Done. Vi? Already installed. MAN pages? Of course its there. Perl, PHP, Web Server, MySQL, the list goes on. Set it up is just as easy as any other *nix machine. Its personal preference, I like UNIX - Macs just happen to have an OS based on it.

[jgitelman]

Great article. The thing about SteveAppleJobs is that he is one of the last remaining people/company's that care about making a great product that delivers an experience. All Dell cared about until recently was squeezing every last cent of cost out of the product and logistics process. Valuable, to be sure, but not a long term strategy for building great relationships with your customers. Dell laptops performance and usability varied widely because they frequently change critical components based solely on cost. Its a classic marketing mistake to think that using price as your main driver will enable you to sustain your business. The smart companies form rational AND emotional connections to their customers that last a lifetime. For more on my perspective on Apple read http://bexyconnects.blogspot.com/2007_09_01_archive.html

[daftkey]

There's a common saying - "The harder you work, the luckier you get."

[dd13reis]

Good point and I think that's a key point in Apple's success. Jobs and company worked hard and the rest is history.

Great point.

-Don

[Perry_Clease]

Both

[Penguinisto]

Agreed. Timing and skill take you far, but it also helps greatly when your competitors are (by choice) shackled.

[shinelikeitdoes]

Pretty poor argument on the luck side.

Did the vast majority of press only recently start using macs? Where is the data to show this?
This is purely speculative, if not fabricated - like in the fashion rags. "80% of all statistics are made up".

I think its pretty clear that many pc manufacturers have just been lazy. Microsoft has been lazy.
Apple, on the other hand, has been pretty much the only company to even try to think outside the
box and do anything innovative. From physical appearance, to user interface. They get it and are
consistently pushing forward.

If they had been just as indifferent as everyone else the "grey box" would still be prevalent. They have also stuck to their guns on many unpopular practices such as allowing their OS only on their hardware.
It has simply taken people this long to see the benefit. And there IS a benefit.

I think their recent success has been carefully and skillfully engineered starting with the seamless iPod/iTunes experience - which is STILL not even close to having a competitor. Because no one else seems to get that convenience, ease of use, and appearance are what matter.

And that success translating to computer sales has been a long process, but they have had the vision and pressed forward. (never mind how the nightmare that is Vista has probably contributed and the unrealistic idea of linux for the average consumer).

I think its way out of line to say that, if luck is involved at all, it is a "healthy dose".

[Renegade Knight]

Yes Luck. Apple had no guarentee that Microsoft would faulter. Their hard work paved the way so that when they got their lucky break they could capatalize on it. Apple would have gained ground anyway through the competitions mis steps, but they gained more by their hard work on the computer side.

[dd13reis]

OK, let me ask you this. if PC manufacturers weren't lazy and Microsoft wasn't lazy, would Apple have enjoyed such success? No = luck.

Way out of line to say it's a healthy dose? Please explain why. I can count numerous examples where Apple was in the right place at the right time. You can't?

-Don

[Penguinisto]

Dunno ab't that... if the portable music market was actually intelligent and had any serious well-marketed competition, the iPod wouldn't have gotten too far (it didn't - I think Dell did the most marketing at the time - for it's Dell DJ).

If the OEM's had marketed Linux as aggressively as IBM did in 2000-2003, they would have been in a better position to dictate terms to MSFT, and built customer bases that had alternatives to XP/Vista. This would have meant that Apple would be forced to compete against two OSes, not just the one that's arguably drop-easy to compete against.

It ain't just journalists - computer security pros go for Macs in a huge way, and have done so since 2002 or so... that made the working IT geeks pay attention, which in turn makes the friends/relatives of those admins pay attention.

[peramica]

An excellent opinion. However, I would add to both the skill and luck sections. To Skill, all the other apple employees who've worked on Macs and other Apple Products. And to Luck, the fact that apple had an opportunity presented by the increasing availability of the internet to dominate new markets, ie iTunes

[dd13reis]

Very true and good point on the skill side. Also a good point with luck. The internet is an important piece of the pie.

-Don

[shinelikeitdoes]

Pretty poor argument on the luck side.

Did the vast majority of press only recently start using macs? Where is the data to show this?
This is purely speculative, if not fabricated - like in the fashion rags. "80% of all statistics are made up".

I think its pretty clear that many pc manufacturers have just been lazy. Microsoft has been lazy.
Apple, on the other hand, has been pretty much the only company to even try to think outside the
box and do anything innovative. From physical appearance, to user interface. They get it and are
consistently pushing forward.

If they had been just as indifferent as everyone else the "grey box" would still be prevalent. They have also stuck to their guns on many unpopular practices such as allowing their OS only on their hardware.
It has simply taken people this long to see the benefit. And there IS a benefit.

I think their recent success has been carefully and skillfully engineered starting with the seamless iPod/iTunes experience - which is STILL not even close to having a competitor. Because no one else seems to get that convenience, ease of use, and appearance are what matter.

And that success translating to computer sales has been a long process, but they have had the vision and pressed forward. (never mind how the nightmare that is Vista has probably contributed and the unrealistic idea of linux for the average consumer).

I think its way out of line to say that, if luck is involved at all, it is a "healthy dose".

[spunkybart]

I "converted" to a iMac last Fall from an older Dell desktop.

I wouldn't say that I have a sense of loyalty to Apple (although I do have an iPhone and an iPod as well).

I would rather say that the Mac made the computer fun again -- I felt a sense of learning and trying out beautiful interfaces -- none of the ugly "mother may I" firewall messages that Vista has. I checked out Vista before I purchased -- it just wasn't exciting -- it seemed to be just a souped up XP.

And buying was simpler -- I didn't have to choose from a multitude of models from a multitude of stores -- I had something like 4 different choices of iMac.

And with VMWare (or Parallels), you can still run your Windows apps -- so it became a no-brainer for me to buy a Mac.

[dd13reis]

Exactly. So you've found that Apple's products make life just a little better. Would you ever consider buying an HP machine again? I doubt it.

Would you feel the same way if you owned that HP machine? I doubt that too.

See what I'm getting at?

-Don

[av_a_laugh]

Good article, though part of Steve Job's skill was in capitalizing on what other companies weren't offering - surely that is not luck? He knows what people want before they want it. Look at the ipod; when he first pitched the idea, senior execs said that people didn't want this sort of product!

[dd13reis]

You're right, the iPod is a much different story. But I was mostly focusing on the Mac side of things. But then again, the iPod was made possible because Sony and others didn't believe MP3 players would amount to anything. And we can't forget that the iPod wasn't first -- it was just the first to offer a real end-to-end, yet easy solution.

-Don

[Zimm2]

One thing is for sure. Apple's success has nothing to do with CNET. For some strange reason, CNET seems to get absolutely giddy when talking about Microsoft and treats Apple like a date that dumped them. I called CNET on this practice a fews years back, and, for a little while, they improved.

I'm not asking for favoritism but rather for objective news coverage, a true rarity in today's highly polarized world.

[dd13reis]

Unbelievable. I guess we always need one of you to come out of the hole you crawl out from, huh? Number one: get a grip, re-read the article, and then formulate an opinion. Number 2: your comment is useless to everyone here.

Number 3: enough with the objectivity crap. If you come here to read my work, you're not going to find that. So either go read the newspaper somewhere or live with it.

-Don

[rattyuk]

"But all the credit can't be given to Steve Jobs. It should also be given to the poor management at Microsoft, Dell, HP, and others. Those companies were complacent, focused on the wrong markets, and generally failed to realize that Apple was starting a movement that wasn't waiting for them to catch up."

That wouldn't be luck, that would be anti skill on their part surely?

[dd13reis]

I think it's lucky that all those companies lost their way just as Apple's star was rising, don't you? It didn't happen before that and it hasn't happened since.

Luck, if you ask me.

-Don

[iertry]

I think the thing that makes Apple products so desirable is Apple. Their customer service is great, unlike microsoft whos is unbearable. Trying to talk to someone at microsoft is like trying to get you wall to have a conversation with you. At apple they respond quickly, they're helpful and they give you what you want. This is what made me switch from ms to apple.

[Zimm2]

I really like Apple, but I believe Microsoft has done an excellent job in improving their customer service in recent years (at one time, I agree with you, it was horrible). Today, I'm not sure that Microsoft isn't roughly equal to Apple in this regard (i.e., customer service).

[dd13reis]

Great point. I'm starting to think that Apple's customer service is a key deciding factor for people buying its machines. Look at what happened to Dell when it decided customer service wasn't as important as it once thought.

Customer service is key and Apple is doing well on that front.

-Don

[ddesy]

"I can do this on my Asus Eee PC 1000H without a problem."

My Macbook was made by Asus...

[SandyEggo]

Apple is now considered "cool" and "hip" so people are bying Apple and pay the premium for the products. Most of the iMac recent success is a spillover from the iPod success. People enjoy and trust the brand.

Also, if you use the internet a lot, the platform is transparent to most people. Surfing the web and downloading files is not mcuh different on a Mac or PC.

Apple has very good customer service and has always been a leader in media, printing, publishing since the 1980's with postscropt fonts and early integration with laser printers.

But one thing that Apple planned a long, long time ago was a project called "Apple Seed." In the early 1980's Apple, with the idea being promoted by Steve Jobs, gave away hundreds of thousands of Apple II computers to elementary and high schools. Apple even was given a special tax break from Congress.

The idea was to get the schools hooked on Apple's and create a future generation of Apple customers. Schools went on to buy more Apples and Macs and so did the kids that used Apples as their first computer. So it took a while to pay off, but Apple Seed is showing it's fruit today.

Apple was one of the first computer makers and is still here today, surviving while thousands of other computer manufacturers have failed.

The answer is: Skill.

[dd13reis]

Great point -- I forgot all about that! Don't you think Apple should follow that same policy now? It could guarantee control over succeeding generations by doing just that. I think it would be a huge improvement and could really change things up for the company.

-Don

[purcell429]

Yup, those childhood memories from school certainly helped them out with people who are graduating from college now. Man, playing prince of persia back in the day? Awesome.

[dascha1]

Ah... Music-on-Demand. It's a story about a boy who was adopted, and later in life constantly nagged, and eventually persecuted by his elders in a world where the word "No" had unlimited potential in its outer-world of possibilities. His dream of using a higher education to bring computing power together with the Music Industry Engineering and Entrepreneurship skills he had earned to no avail for years. Alsa, who would've thought though, that a simple gray T-Shirt from Apple in the early 90's would actually be all that he deserved in his achievement where the idea is worth more than money, and has changed global markets forever. Sad story, isn't it?

[dascha1]

And his two friends who built the player part of the prototypes, sans the search engine which he programmed himself. The CATV industry claimed Radio would prevail, and the Telco industry claimed Video Dialtone would prevail. Instead, the Sony Walkman suffered the most in the late 90's opening a Portable Player Device gap in the market for a failing Computer Science company called Apple.

[dd13reis]

Ha! Luck or skill?

-Don

[dascha1]

It's a steal, no question about it.

[stocklirider]

Apple wins by pure skill, no questions asked.

The real key to their success is their inherent ability to truly connect with what we the consumers want to see in a product design (no holds barred). Apple thinks of stuff that many people, including myself, dream about at night... and in some cases draw on napkins when we're bored. They have a real knack for making real, down-to-earth concepts come to life, and THIS is why apple is so popular with the people.

The other players in the tech industry really just don't seem to understand the simple, yet progressive styling that apple exudes in its product designs. Perhaps the ground-up product design process for companies has become to cumbersome and convoluted that the true essence of the design they had planned for is lost by the time the product makes it to the market... I don't know.

Whatever the reason, Apple wins because they are one of the very few companies out there that truly, TRULY understands what it is we want to see as consumers.

Although I will say, the new HTC touch diamond phone is looking like a real winner... I own an iphone right now and am pretty smug about how awesome it is, but this HTC phone looks as if someone is finally starting to catch on to Apples success! Good work HTC.

[dd13reis]

So you don't think luck had anything to do with it? You think it was pure skill? I can't agree with that. Who would have thought that Dell, HP, MSFT, and others would all screw up at the same time? It's luck on that front.

I agree on the HTC front -- I'm really looking forward to seeing how well it performs.

-Don

[Lamppost0]

Good luck is only good if you have the skill to take advantage of it.

[dd13reis]

True, but luck certainly helps and Apple had plenty of it before and after the skill was necessary.

-Don

[debasisg]

1. Apple created a cult following by an extraordinary marketing approach.
2. The products they offer are beautifully packaged.
3. The actual product features are often sub-par or inferior and restrictive for the consumer.

Example: iTunes is hugely popular, but an evil application. Install it to two computers and it will wipe out your songs! iPod still does not have FM.

But they have a crappy phone packaged in a nice case with a nice browser. That is how they win!!

[dd13reis]

Whether or not that's true, you have to commend the company for proving consumers with the products they DESIRE. That's what Apple understands that most other companies simply don't. It's about consumer desire. No more, no less.

-Don

[Sadlyno]

According to debasisg: "iTunes is hugely popular, but an evil application. Install it to two computers and it will wipe out your songs! iPod still does not have FM."

The first statement is true - if you're an idiot. I have iTunes on five different computers in my house and share music libraries between them, AND play music from any one of them on our home entertainment system via Airport Express.

The second statement is equally ridiculous. Who wants FM on their iPod. Got get a Zune and join the social along with the six other people who think FM is the killer app.

[inick500]

#1what do you mean it will wipe out your songs#2who needs or wants an FM radio when you can carry 40000 songs on your iPod(besides you)#3 how are they restrictive

[Galaxy5]

If you're going to troll comments like these, don't bother showing up if you're going to lie so blatantly.

1. iTunes allows you to use your purchased music on up to five devices at any one time - and even provides ways to wirelessly stream to other parts of the house without physically having a computer or iPod in that area. Tunes will never erase songs from your computer. Never, under any circumstances.

2. You can buy an FM radio remote from Apple that will work with any iPod made in the past few years. Wrong again, troll. I'd rather not pay money or battery life for a feature I will never, ever use - and FM radio for me is a commercialized wasteland of hackish DJs and teeny bopper music. But if that's what you like, buy an iPod FM remote or a Zune.

[kingdomwise]

Debasisg, I think this is now the second or third comment of yours about how Apple is "evil" and it is inferior, but you give no example of how Microsoft is better - oh, thats right you cant - because its not!! The only way you can erase songs from your computer with iTunes is by going through the folders and deleting each folder. Which for you Windows babies, is something you probably have to do alot to keep that system running.

The business world is going Mac and so is the college and 25-30 y.o adults of this culture. So while you sit and listen to Avril pumped over the FM station on your soon to be out-of-date Zune, the rest of us will be enjoying our iTunes

[W Macaulay]

Apple leads at innovation. Isn't the Windows GUI stolen from the Mac? And the iPod has been parroted, as well as the iPhone, and while the first iMacs weren't copied (who'd bother!) the new iMacs have been copied by Sony, Dell and Gateway. So Apple's skillz are without doubt.

As Stocklirider points out -- the HTC Diamond (which a colleague has in our office) is good, but I think my iPhone works better in almost all respects, except that I'm forced to use iTunes to sync up my iPhone.

[dd13reis]

Copying basic concepts is a key component in every facet of this industry and is not reserved for MSFT and a few others. Go look up the history of the iPod for some one-on-one learning about taking ideas and "improving" them.

-Don

[superswiss]

Well the GUI was originally stolen by Steve Jobs from Xerox and the result was the Apple Lisa. Go read the history books.