As students of recessions know, not all economic activity stops, even during the worst of it. People went to movies in the 1930s, and movies made great leaps in technology. Contrast the look and sound of The Thin Man (1934) with that of The Wizard of Oz (1939) made just five years later.
Recessions destroy bad, bloated and behind-the-times business models. By doing so, recessions clear the way for the new and novel. I've mentioned this so many times that I might sound like a broken record to some, but consider the new companies and trends that emerged and thrived during the 1970s, the worst economic decade that most of us have lived through:
New Companies
Federal Express (1970), Charles Schwab (1971), Southwest Airlines (1971), Kleiner Perkins (1972), Sequoia Capital (1972), Microsoft (1975), Apple (1976), Genentech (1976), Oracle (1977)
New Products
Microprocessor, personal computer, packet switching standard (X.25), e-mail for personal computers (CompuServe, 1979), recombinant DNA
Fitness Boom, Feminism and Fragmented Lifestyles
The 1970s gave us the jogging boom and a New York Times bestseller called The Complete Book of Running. Feminism took off during the 1970s, in part when tennis start Billie Jean King defeated Bobby Riggs in "The Battle of the Sexes." Cable television and special interest magazines blew up the monolithic American culture. No longer did 90% of TV-watching Americans tune in to one of three networks. The age of Walter Cronkite had passed.
The title of today's blog refers to Apple's blowout numbers in bad economic times. Apple is now 33 years old, but it seems like a perpetually new company. Jim Cramer so loves Apple, he said Tuesday night Apple's stock was headed to $300. I have no clue where Apple's stock is headed, but I do think its blowout performance since the iPod launch in 2001 has everything do to with Apple's keen sense of cultural shifts, which keeps the company at the edge of new. The genius of Steve Jobs has always been to marry his good-enough layman's understanding of technology with his world-class design eye and his preternatural understanding of cultural moods.
Apple always seems one step ahead even when it comes from behind. Apple didn't invent the personal computer, but it made the computer personal. It didn't invent the MP3 player, but the iPod put it all together. Smart phones existed before the iPhone. The forthcoming Apple iPad (or whatever it is called) will stand on the shoulders of the Amazon Kindle and maybe crush the Kindle. That's my speculation as a rabid Kindle lover.
The lesson of Apple is to think deeply (or differently) about what touches customers in an enduring way. Apple proves that great design and product coherence--stuff that looks cool, works well, and thus justifies higher prices--can work even in a recession.
Apple is a secular company with a religious following. It understands that people want transcendence and hope, especially during a difficult period. Apple's products, to those who like them--myself, I love my MacBook Pro but still prefer a BlackBerry to the iPhone--have a quality that reaches beyond today's drudgery and reminds us of what is possible.
Movies did that in the 1930s. Apple is doing that now. Which is why Apple is an outlier.
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Funny. I just ordered a MacBook Pro, Rich. Times are tough but I felt I needed a new machine and rather than pinch pennies tried to maximize value and the MacBook Pro.
I prefer iPhone to Blackberry and maybe having the iPhone led me to get a Mac.
Let’s hope America is now filled with all these great world-beating companies that will blossom in 10 years, as in the 70s. I don’t buy the analogy but hope you’re right. (Remember, that Mac was configured, built and shipped from Shanghai, not Cupertino.)
Whether in a recession or not, one of the keys to surviving and thriving is a clear vision and the strategy and execution to back it up. Apple does that and more … being an outlier is an added plus.
Rich, your insights about how Apple “reaches beyond today’s drudgery and reminds us of what is possible” are spot on. It is a company that offers the promise of innovation that takes us beyond today and into a world of products we have never seen or imagined before.
But, to me, what makes Apple the real outlier is its messaging and how it communicates its innovation. A crisp logo, sleek deigns and the iconic tag line “Think Different” all reek of great messaging AND an outlier mindset. Great post.
Loraine Antrim, Core Ideas Communication
Agree with Brian, we need to start manufacturing these great products in the US or eventually we’re dead. Can’t fuel an economy on all “buying” and no “manufacturing. Mathmatically impossible, unless we happen upon a trillion barrels of oil under South Dakota or something unreal lucky.
Though pricey, i fell in love with mac long time ago, and i am on 4th mac – macbook pro. mac laptop lighten up an accountant life. despite the global recession, i’ll buy the latest macbook or whichever when it lands in Lagos. Unique designs and powerful graphics. Methink apple is tied to Steve Jobs, so what happens to apple after Jobs. Kunle Apata. Lagos, Nigeria
Religious following of a company or its products is not only creepy, but dangerous. Apple makes nice devices, but its following reminds me of the book 1980.
“Apple makes nice devices, but its following reminds me of the book 1980.”
Nope can’t place that one. Is it anything like George Orwell’s 1984?
Apple may be expensive but number one it did break the back of the IBM and many in IT. Look at the iPod, Samsung is copying this like Brown and Obama welcome Afghan run-off vote. Losing a lot of men and cash but "we are buddies" Like IBM and Steve Jobs are. OPEC Boss: Oil Trades in Dollars
Tuesday, October 20, 2009 9:42 AM Article Font Size
LONDON — OPEC Secretary-General Abdullah al-Badri said on Monday he knew of no plans to shift international oil trade away from its dollar denomination. When asked if he was aware of any such moves, Badri said: “No, no, this is a 100 percent member country policy.” Reiterating that oil trade denomination issues were the concerns of individual OPEC members rather than group policy, Badri also said dollar weakness was a concern for exporters. Two women friends had gone for a girl’s night out. Both were very faithful and loving wives, however, they had gotten over-enthusiastic on the Bacardi Breezers. Incredibly drunk and walking home they needed to Pee, so they stopped in the cemetery. One of them had nothing to wipe with so she thought she would take off her panties and use them. Her friend however was wearing a rather expensive Pair of panties and did not want to ruin them. She was lucky enough to squat down next to a grave that had a wreath with a ribbon on it, so she proceeded to wipe with that. After the girls did their business, they proceeded to g home. The next day one of the woman’s husband was concerned That his normally sweet and innocent wife was still in bed hung over, so he phoned the other husband and said: ‘These girl nights have got to stop! I am starting to suspect the worst. My wife came home with no panties!' ‘That’s nothing’ said the other husband, ‘Mine came back with a card stuck to her ass that said… ‘From all of us at the Fire Station. We will never forget you.” I thank you Firozali A. Mulla
Great post, Rich! It’s hard to beat Apple design AND marketing.
I do believe there is a whole lot of oil in South Dakota, Jim from Cleveland. It’s called the Bakken Formation. I’ve been waiting for someone-anyone to get started on it so we can wave bye-bye and good luck to our “friends” the al Saud family.
Firozali A. Mulla–Now that’s funny right there, I don’t care who you are…
Recession is a blessings in disguise. It lets over stocks consume and pave a new road for new technologies and new entrepreneurs.
It helps emerging economies to find their way in a main stream.
Recession outcasts old technologies and old but inefficient businesses and business practices.
Apple is one of the market leader in electronics especially in Computers and mobile phones.
No doubt it will overcome affects of recession.
Thanks, Jyoti Kothari
If Cramer is telling us that Apple will go to $300.00, it’s time to sell.
This sort of reminds me of 1999 when everyone said that the internet was the future. Yes it was, but it was also the present, and sometimes lots of money can be lost in the present while we wait for a future who’s mantle is carried by another company.
Apple is not the future, it’s the present. The future may be an Apple like company while Apple fades away. Or, perhaps Apple will be the future as well. Given corporate life cycles (and human mortality) I doubt it.
I have been an Apple nut since the Apple II+, but I am about to abandon my Macs. My last purchase was an iMac G5 with MS Office and PC emulation. Within weeks, Apple came out with the Intel based machine, leaving me in an expensive technological backwater. I still loved Apple, though, and was just about to buy an Intel Mac when I saw Apple is dropping out of the Chamber of Commerce because it disagrees with the Chamber’s positions on global warming and Obamacare. Design excellence is fine, but I have no interest in supporting loony lefty religions.
Your comments on recession as a purgative are spot on. However, if Apple didn’t invent the personal computer, who did? I bought an Apple II+ in October 1980. It was already a mature model having debuted in 1977 along with the Trash 80.
I remember some of the old computers, they were slightly faster than a slide rule and the size of a dryer. Apple has done well, partly because we’re pissed at microsoft for always needing (by design) expensive upgrades and partly because they make some handy stuff. What that has to do with our current economic situation though, I’m not sure. Apple is a survivor I guess and doing well, so are pawn shops, prostitution,storage sheds, debt consolidators, repot companies and seed suppliers. There will always be some businesses that do well.
Wasn’t Apple incredibly innovative with all those incredible ideas they picked up from Xerox?
Rich reminds me of the Wicked Old Witch in Snow White beckoning us to bite into a juicy red apple.
http://as7.disneystore.com/is/image/DisneyShopping/300432?$full$
Regarding the 1970s and the “fitness boom” and “fragmented lifestyles”:
The New York Times bestseller “The Complete Book of Running”, was written by running guru, Jim Fixx. Jim Fixx, died at age 52 of a heart attack. So much for you can “run yourself” into good health. A good point to keep in mind at this time when the current governmental guru’s of health care want to dictate to everyone what a “healthy lifestyle” is and they plan on taxing you into their version of being healthy. If under their “healthy lifestyle” program you happen to die at age 52 then perhaps the “program” needs a little tweaking, but the government knows what is healthy for you.
Whether Cable television and special interest magazines “blowing up” the monolithic American culture is a good thing, I guess is a matter of opinion. That so called “monolithic American culture” in a short period of 200 years, turned a wilderness into the most powerful and economically successful country in the history of the world. Whether “fragmented lifestyles” have advanced the country in the last 30 years or whether they are in the process of leading the country to destruction is a matter of debate. There is no question the country is fragmented, divided and hyphenated. The idea that one of the strengths of America was that it was a “melting pot” has been discarded as an anachronistic ritual of the “monolithic American culture”.
As the saying goes “Together we stand, divided we fall”.
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