Sign in
Become a MarketWatch member today
Jon Markman's Speculations
Jan. 19, 2011, 1:27 p.m. EST
View all Jon Markman's Speculations "º
"¹ Previous Column
Big tech is back
First Take "º
Starbucks trades java for an iPhone swipe
By Jon Markman, MarketWatch
SEATTLE (MarketWatch) "” Apple Inc. announced stellar fourth-quarter earnings on Tuesday in a report that was tinged with sadness over reports of its founder's ebbing health. The company's amazing journey over the past three decades reminds us of the mythic Greek story of Marathon, in which a triumphant long-distance runner falls exhausted into the arms of a grateful city after completing an epic task.
The success of virtually every arm of Apple /quotes/comstock/15*!aapl/quotes/nls/aapl (AAPL 340.95, +0.30, +0.09%) in the past quarter has been detailed elsewhere, but what jumped out at me was how different this could all have turned out. The company's commercial victories were anything but pre-ordained, and if you swing the clock back 10 years I don't know of many people who would have forecast that mercurial Chief Executive Steve Jobs would one day lead the second most valuable firm in the United States, after energy giant Exxon Mobil /quotes/comstock/13*!xom/quotes/nls/xom (XOM 78.56, -0.15, -0.20%) .
Think about it: Back in the mid-1990s, the most innovative and exciting mobile-phone company, by a mile, was Nokia Corp. /quotes/comstock/13*!nok/quotes/nls/nok (NOK 10.25, -0.41, -3.85%) . Slaughtered since. The next most important mobile-communications company was Motorola /quotes/comstock/13*!msi/quotes/nls/msi (MSI 37.24, -0.47, -1.25%) . Buried. The most important chip provider was Intel Corp. /quotes/comstock/15*!intc/quotes/nls/intc (INTC 20.97, -0.11, -0.53%) . Dead in the water. The most important personal computer maker was Dell Inc. /quotes/comstock/15*!dell/quotes/nls/dell (DELL 13.77, -0.33, -2.34%) . Dead in the water too. Microsoft Corp. /quotes/comstock/15*!msft/quotes/nls/msft (MSFT 28.33, -0.33, -1.15%) ? Better, but not by much.
/quotes/comstock/15*!aapl/quotes/nls/aapl AAPL 340.95, +0.30, +0.09% Apple share price performance
So how did the Apple miracle occur? You have to point to one man, and that is Jobs, who may have sacrificed his well-being to bring his company to this height. Strip away the numbers, and what's left is one person's vision, taste, engineering, ambition and charm that created two multibillion-dollar success stories "” animated film maker Pixar, sold to Walt Disney Co. /quotes/comstock/13*!dis/quotes/nls/dis (DIS 39.04, -0.35, -0.89%) a while ago, was the other "” that defied conventional wisdom and Wall Street expectations at every turn.
Of course, it wasn't always this way. Apple was an also-ran for almost 20 years, spending most of the 1990s and the first half of the 2000s in the dog house. If you just started to invest in the past five years, it may be hard for you to imagine but Apple for years was always like the loner, snooty, hipster kid at school that the in crowd mocked.
Sure the artists loved Apple's pretty white boxes and graphics software, and cooed about the long-haired, ethereal Jobs at the helm. But as a company and as a stock it could never get any respect. It seemed like whenever Apple did manage to bring out a product that looked promising, it could never produce enough of them, fast enough, to have its design prowess turn into earnings growth.
Reuters Apple Chief Executive Steve Jobs after the company's September media event in San Francisco.
Investors shunned the stock, and, by 2001, it was actually trading for less than the value of the cash on its books. I will never forget running into a friend who was one of Jobs's marketing geniuses that same summer. We were taking a break from cycling on Lake Washington Boulevard and as we downed espressos he lamented that he could not figure out why Wall Street would not give the company credit for all that it had accomplished throughout the years. The Street literally determined that Apple was worth more dead than alive.
My friend said he thought that Wall Street's perception would change once they saw a new project that they were working on. He couldn't tell me any details but he hinted that it was a new type of MP3 player. I nodded my head appreciatively, but in my mind I had the consensus view: Even if Apple did turn out to have some secret weapon, you could count on them to screw up the manufacturing or the supply chain.
Well that device turned out to be the iPod, and if you think about it now it's amazing that the company started its surge to the top ranks of American business with a little white device that only played music. There were a lot of player competitors at the time, but the iPod was different enough to catch your eye. The capacity was larger, it was easier to operate and it just felt very cool.
Suddenly Apple would be out of the domain of art directors and put its impeccable taste in the hands of consumers. That was Jobs's vision, and that was his contribution. He had a vision that design mattered, and that consumers would beat a path to his door if he could manufacture and market beautiful objects that performed a useful function at an affordable price. The brilliant effort to disintermediate the music industry from the album-selling process was another stroke of genius, as the 99-cent song and iTunes formed the foundation of the iPod franchise.
It actually took a long time for investors to appreciate this vision, and Apple shares did not start to take off until 2004. The reason was that people remained skeptical that Apple could match manufacturing and distribution prowess to its design success. After the company managed to bring out successive iPod models on time and without a hitch, shares broke out over their all-time high in early 2005, and then it was off to the races.
$( function() { embedPlayerByVideoId('{2A8A1448-D395-4642-8EBC-966E00D9264B}', 'video_2A8A1448-D395-4642-8EBC-966E00D9264B', '162', '287'); }); News Hub: Are You a Secret Apple Shareholder?You may not know it, but you are probably a secret Apple stockholder. And maybe a big one. Brett Arends explains why.
The iPhone came along in 2007, and the initial reaction was muted. Wireless pundits could not figure out why Apple would want to take on the handheld device world which was low margin and packed with dozens of competitors. But again Jobs' design vision "” one button?! "” and marketing cunning won the day with consumers, and the company's newfound ability to manufacture in Asia effectively won the respect of its Wall Street critics. The cycle of skepticism, cynicism and then awe has been played out repeatedly now with successive Apple products, as the iPad was subjected to the same doubts.
Now investors apparently assume that Apple is a one-man show, with a single individual guiding every aspect of this product development, operations and marketing. This makes sense, since Jobs has been the man out front all this time.
But insiders report that Tim Cook has been running the retail and operational show behind the scenes for more than five years now, and that Jonathan Ive continues to be the design genius most responsible for the engineering for which Jobs gets credit. They are confident that Jobs "” while irreplaceable "” has prepared the company for his eventual exit, which has been expected for the past half-decade since he was diagnosed with cancer.
Jobs will go down in the history books as the equal of Thomas Alva Edison, who founded General Electric /quotes/comstock/13*!ge/quotes/nls/ge (GE 18.23, -0.38, -2.02%) ; Henry Ford, who founded Ford Motor Co. /quotes/comstock/13*!f/quotes/nls/f (F 17.84, -0.86, -4.60%) ; John D. Rockefeller, who founded Standard Oil; and J.P. Morgan /quotes/comstock/13*!jpm/quotes/nls/jpm (JPM 43.91, -0.84, -1.88%) , who started a certain eponymous bank. None of these gentleman had their success handed to them on a silver platter, but persevered with a vision and business proposition that was uniquely suited to their times.
Cheap lights, cheap cars, cheap gas, cheap money "” and now cheap music and not-so-cheap, but still beautiful and ubiquitous, mobile communications and entertainment. All these companies survived their founder, and so will Apple.
In the meantime, we are lucky to have had an opportunity to witness Jobs emerge, grow and cast his spell in our lifetimes, and I certainly wish him a speedy recovery. And as for the stock, well, Apple has been one of the few great holds of the past few years. Yet it also regularly provides new entry points. The next buying opportunity should emerge this quarter.
For more ideas like these, try a two-week trial to Markman's daily investment newsletter, Strategic Advantage , published in partnership with MarketWatch, or his daily trading newsletter,Trader's Advantage . Follow Markman on Twitter @jdmarkman
Jon Markman is a MarketWatch columnist. He runs a money-management and investment-advisory firm in Seattle.
Add Comment › · Recommend (2) · Post: Alert Email Print More Jon Markman's Speculations Jan. 18, 2011 Big tech is back Jan. 3, 2011 Three sectors that will dominate 2011 Dec. 13, 2010 Welcome back, bull market Dec. 6, 2010 Global warming heats oil and coal sectors Nov. 24, 2010 Combat-weary stocks shoulder trifecta of trouble Explore related topics Computer Hardware Computer Software Apple Inc Exxon Mobil Corp Nokia Corp Motorola Solutions Inc Comments Screener About Jon MarkmanJon Markman is a money manager and investment adviser in Seattle. For more ideas like these, try a two-week trial to Markman's daily investment newsletter, Strategic Advantage, published in partnership with MarketWatch, or his daily trading newsletter, Trader's Advantage. His Twitter feed is @jdmarkman.
First Take Starbucks trades java for an iPhone swipeIn Starbucks Corp.'s dynamic world, the future lies in buying coffee by swiping an iPhone or another smartphone, writes Jon Friedman.
11:21 a.m. Today11:21 a.m. Jan. 19, 2011
Most Popular Most readMost commented America's top 2011 showcase home in pictures Steve Jobs and the miracle of Cupertino U.S. stocks slip after Goldman disappoints Apple blows out results on iPhone, iPad sales U.S. stock futures falter after Goldman, housing The best laid plans ... Apple blows out results on iPhone, iPad sales Obama eyes scrapping "?dumb' regulations U.S. stocks finish higher; Citi, Apple struggle Financials fall after earnings parade Find a Broker Partner Center » MarketWatch's Latest Tweets"$IBM shares set new record following earnings http://bit.ly/gdXuOk" 2:15 p.m. EST, Jan. 19, 2011 from MarketWatch
"RT @tpoletti: #Apple should make Tim Cook its CEO http://on.mktw.net/gBWd7w" 1:47 p.m. EST, Jan. 19, 2011 from MarketWatch
"U.S. stocks wobble after Goldman reports http://bit.ly/fCyzXs" 1:13 p.m. EST, Jan. 19, 2011 from MarketWatch
"Boeing hails $19 bln jet order from China http://on.mktw.net/hzVdvJ" 12:42 p.m. EST, Jan. 19, 2011 from MarketWatch
"RT @MKTWAsia: #Obama, #Hu start meeting that will include CEOs http://bit.ly/iisOmm" 12:21 p.m. EST, Jan. 19, 2011 from MarketWatch
/quotes/comstock/15*!aapl/quotes/nls/aapl Apple Inc (AAPL) /marketstate/country/US The market is open2:45:10 pm The market is closed2:45:10 pm $ 340.95 Change +0.30 +0.09% Volume 31.03m Real time quotes var embeddedchart2053059580Chart = new EmbeddedChart('#embeddedchart2053059580', NormalChartStyleNoDecimals, 190, 90, '1dy', '5mi', null, null, null, 'US:AAPL'); jQuery.data($('#embeddedchart2053059580').get(0), 'embeddedchart', embeddedchart2053059580Chart); Add to portfolio AAPL Find a Broker Create alert /quotes/comstock/13*!xom/quotes/nls/xom Exxon Mobil Corp (XOM) /marketstate/country/US The market is open2:45:10 pm The market is closed2:45:10 pm $ 78.56 Change -0.15 -0.20% Volume 13.39m Real time quotes var embeddedchart77678882Chart = new EmbeddedChart('#embeddedchart77678882', NormalChartStyleNoDecimals, 190, 90, '1dy', '5mi', null, null, null, 'US:XOM'); jQuery.data($('#embeddedchart77678882').get(0), 'embeddedchart', embeddedchart77678882Chart); Add to portfolio XOM Find a Broker Create alert /quotes/comstock/13*!nok/quotes/nls/nok Nokia Corp (NOK) /marketstate/country/US The market is open2:45:10 pm The market is closed2:45:10 pm $ 10.25 Change -0.41 -3.85% Volume 17.26m Real time quotes var embeddedchart77678162Chart = new EmbeddedChart('#embeddedchart77678162', NormalChartStyleNoDecimals, 190, 90, '1dy', '5mi', null, null, null, 'US:NOK'); jQuery.data($('#embeddedchart77678162').get(0), 'embeddedchart', embeddedchart77678162Chart); Add to portfolio NOK Find a Broker Create alert /quotes/comstock/13*!msi/quotes/nls/msi Motorola Solutions Inc (MSI) /marketstate/country/US The market is open2:45:10 pm The market is closed2:45:10 pm $ 37.24 Change -0.47 -1.25% Volume 2.43m Real time quotes var embeddedchart1690816175Chart = new EmbeddedChart('#embeddedchart1690816175', NormalChartStyleNoDecimals, 190, 90, '1dy', '5mi', null, null, null, 'US:MSI'); jQuery.data($('#embeddedchart1690816175').get(0), 'embeddedchart', embeddedchart1690816175Chart); Add to portfolio MSI Find a Broker Create alert /quotes/comstock/15*!intc/quotes/nls/intc Intel Corporation (INTC) /marketstate/country/US The market is open2:45:10 pm The market is closed2:45:10 pm $ 20.97 Change -0.11 -0.53% Volume 29.69m Real time quotes var embeddedchart668544352Chart = new EmbeddedChart('#embeddedchart668544352', NormalChartStyleNoDecimals, 190, 90, '1dy', '5mi', null, null, null, 'US:INTC'); jQuery.data($('#embeddedchart668544352').get(0), 'embeddedchart', embeddedchart668544352Chart); Add to portfolio INTC Find a Broker Create alert /quotes/comstock/15*!dell/quotes/nls/dell Dell Inc (DELL) /marketstate/country/US The market is open2:45:10 pm The market is closed2:45:10 pm $ 13.77 Change -0.33 -2.34% Volume 14.96m Real time quotes var embeddedchart1132179241Chart = new EmbeddedChart('#embeddedchart1132179241', NormalChartStyleNoDecimals, 190, 90, '1dy', '5mi', null, null, null, 'US:DELL'); jQuery.data($('#embeddedchart1132179241').get(0), 'embeddedchart', embeddedchart1132179241Chart); Add to portfolio DELL Find a Broker Create alert /quotes/comstock/15*!msft/quotes/nls/msft Microsoft Corporation (MSFT) /marketstate/country/US The market is open2:45:10 pm The market is closed2:45:10 pm $ 28.33 Change -0.33 -1.15% Volume 36.84m Real time quotes var embeddedchart37009960Chart = new EmbeddedChart('#embeddedchart37009960', NormalChartStyleNoDecimals, 190, 90, '1dy', '5mi', null, null, null, 'US:MSFT'); jQuery.data($('#embeddedchart37009960').get(0), 'embeddedchart', embeddedchart37009960Chart); Add to portfolio MSFT Find a Broker Create alert /quotes/comstock/13*!dis/quotes/nls/dis Walt Disney Co (DIS) /marketstate/country/US The market is open2:45:10 pm The market is closed2:45:10 pm $ 39.04 Change -0.35 -0.89% Volume 5.95m Real time quotes var embeddedchart1085121426Chart = new EmbeddedChart('#embeddedchart1085121426', NormalChartStyleNoDecimals, 190, 90, '1dy', '5mi', null, null, null, 'US:DIS'); jQuery.data($('#embeddedchart1085121426').get(0), 'embeddedchart', embeddedchart1085121426Chart); Add to portfolio DIS Find a Broker Create alert /quotes/comstock/13*!ge/quotes/nls/ge General Electric Co (GE) /marketstate/country/US The market is open2:45:10 pm The market is closed2:45:10 pm $ 18.23 Change -0.38 -2.02% Volume 59.74m Real time quotes var embeddedchart1591023426Chart = new EmbeddedChart('#embeddedchart1591023426', NormalChartStyleNoDecimals, 190, 90, '1dy', '5mi', null, null, null, 'US:GE'); jQuery.data($('#embeddedchart1591023426').get(0), 'embeddedchart', embeddedchart1591023426Chart); Add to portfolio GE Find a Broker Create alert /quotes/comstock/13*!f/quotes/nls/f Ford Motor Co (F) /marketstate/country/US The market is open2:45:10 pm The market is closed2:45:10 pm $ 17.84 Change -0.86 -4.60% Volume 60.98m Real time quotes var embeddedchart372029404Chart = new EmbeddedChart('#embeddedchart372029404', NormalChartStyleNoDecimals, 190, 90, '1dy', '5mi', null, null, null, 'US:F'); jQuery.data($('#embeddedchart372029404').get(0), 'embeddedchart', embeddedchart372029404Chart); Add to portfolio F Find a Broker Create alert /quotes/comstock/13*!jpm/quotes/nls/jpm JPMorgan Chase & Co (JPM) /marketstate/country/US The market is open2:45:10 pm The market is closed2:45:10 pm $ 43.91 Change -0.84 -1.88% Volume 27.84m Real time quotes var embeddedchart124732459Chart = new EmbeddedChart('#embeddedchart124732459', NormalChartStyleNoDecimals, 190, 90, '1dy', '5mi', null, null, null, 'US:JPM'); jQuery.data($('#embeddedchart124732459').get(0), 'embeddedchart', embeddedchart124732459Chart); Add to portfolio JPM Find a Broker Create alert Featured Commentary » Next: Jennifer Waters' Consumer ConfidentialConsumer Confidential
The 7 places inflation is battering consumers
Next: Mark HulbertOn the Markets
Full crash recovery for some advisors
Next: Jon Markman's SpeculationsSpeculations
Steve Jobs and the miracle of Cupertino
Next: Jon Friedman's Media WebMedia Web
Sarah Palin's best friend: liberal media
Next: Chuck JaffeOn Mutual Funds
'Financial planners' aren't pros, GAO finds
Next: Darrell Delamaide's Political CapitalPolitical Capital
Obama's review of regs challenges GOP
Next: Robert Powell's Your PortfolioYour Portfolio
Where to invest over the next 10 years
Next: Amotz Asa-El's View from JerusalemView from Jerusalem
South Sudan's future lies outside Mideast
Next: Rex NuttingMoney and Power
Republicans' best hope is to sow doubts
Next: Therese Poletti's Tech TalesTech Tales
Apple should make Tim Cook its CEO
Next: Paul B. FarrellBehavioral Economics
Four reasons Buffett's legacy will die by 2020
More BigCharts Virtual Stock Exchange WSJ Asia WSJ Europe WSJ Americas WSJ Chinese Financial News Online SEARCH 2:45 PM EST January 19, 2011 /marketstate/country/us New York Open /marketstate/country/uk London Closed /marketstate/country/jp Tokyo Closed /marketstate/country/us /marketstate/country/uk /marketstate/country/jp View All Latest News /news/latest8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2674042:41pGold gains as copper turns lower
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2674022:41pMaryland regulator OKs FirstEnergy-Allegheny deal
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2674012:35pBREAKING
Crude-oil futures declines 0.6% to end at $90.86
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2674002:34pMannkind slides ahead of FDA decision
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2673972:32pDrug indexes fall as Depomed tumbles
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2673952:26pBefore the Close from MarketWatch Radio Network
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2673942:23pChiesi pleads guilty in Galleon case
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2673932:21pProgress on China currency not fast enough: Obama
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2673922:10pHospital shares hit ahead of House repeal vote
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2673911:59pBoeing scores $19 billion jet order from China
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2673901:57pObama presses Hu on trade, currency
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2673891:56pChips weigh on techs, but IBM shares shine
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2673871:45pGold ends modestly higher on weaker dollar
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2673861:41pBusiness deals bolster U.S.-China relations: Hu
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2673851:41pBREAKING
Gold ends 0.2% higher at $1,370.20 an ounce
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2673841:36pFinancials fall after earnings parade
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2673821:36pCanadian stocks pull lower
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2673811:32pChina currency remains undervalued, Obama says
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2673781:31pObama tells Hu trade has to be fair
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2673991:27pSteve Jobs and the miracle of Cupertino
Loading more headlines... dow /quotes/comstock/10w!i:dji/delayed 11,817 -20.62 -0.17% nasdaq /quotes/comstock/10y!i:comp 2,727 -39.19 -1.42% s&p 500 /quotes/comstock/21z!i1:in\x 1,282 -13.09 -1.01% Kiosk 1289894400000 1289898000000This Week in Japan
LISA TWARONITE Right rite of spring? As part of its annual spring labor-management negotiations, Japan's largest labor union is calling for wage hikes. Opinion is divided. /conga/kiosk/asia.html 122901 1278554400000 1278554400000Canada
Not going anywhere Gold as an investment isn't going away, even if its price drops, which many people have predicted. "¢ MarketWatch's Canada page /conga/kiosk/canada.html 122975 1266332400000 1266332400000Investing
mark hulbert Recovery complete for some The portfolios of more than 40% of the advisers tracked by the Hulbert Financial Digest are worth more today than in October 2007. /conga/kiosk/commentary2.html 122915 1238889600000 1270425600000Asia
Asia can get past inflation Projected growth across Asia is probably strong enough to overcome the inflation gloominess that has marked the headlines lately, analysts say. 122840 1240214400000 1271750400000The Technical Indicator
michael ashbaugh Nearing resistance A powerful uptrend in the equities market is nearing major resistance. Will it break through? "¢ Sign up for a free trial of The Technical Indicator 122718 1238889600000 1270425600000Personal Finance
ROBERT POWELL'S YOUR PORTFOLIO Investing for the next decade Find out which three investment classes are likely to delivers the best returns in the coming decade. "¢ Why consumers won't spur a recovery 122952 1255370400000 1255370400000Outside the Box
Hedge to protect Careful hedging can shield your investments in a volatile market, writes Jay Pestrichelli. "¢ Contrarian forecast for 2011 "¢ Ten expert stock picks for 2011 /conga/kiosk/wildcard4.html 122906 MarketWatch.com Site Index Topics Help Feedback Newsroom Roster Media Archive Premium Products Mobile Podcasts RSS MarketWatch on Facebook MarketWatch on Twitter Company Info Code of Conduct Corrections Advertising Media Kit Advertise Locally License our Content WSJ.com Barron's Online BigCharts Virtual Stock Exchange All Things Digital MarketWatch Community Financial News Online WSJ.com Small Business FINS: Finance, IT jobs, Sales jobsCopyright © 2011 MarketWatch, Inc. All rights reserved. By using this site, you agree to the Terms of Service and Privacy Policy.
Intraday Data provided by Thomson Reuters and subject to terms of use. Historical and current end-of-day data provided by Thomson Reuters. Intraday data delayed per exchange requirements. Dow Jones Indexes (SM) from Dow Jones & Company, Inc. All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More information on NASDAQ traded symbols and their current financial status. Intraday data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. Dow Jones Indexes(SM) from Dow Jones & Company, Inc. SEHK intraday data is provided by Comstock and is at least 60-minutes delayed. All quotes are in local exchange time.
MarketsMarkets Data is loading... QuotesQuotes Data is loading... My PortfolioMy Portfolio Data is loading... My AlertsMy Alerts Data is loading... CommunityCommunity HOT PICKS MY PICKS MY GROUPS Data is loading...ALERT:
MarketWatch Top Stories Link to MarketWatch's Slice. 15 $(".bgCurrencyFormatting").data("bgFormat", { last: "#,###.0000", change: "#,###.0000", percentChange: "#,###.0000%" }); if (typeof s != "undefined") { s.channel = "MarketWatch"; s.server = "www.marketwatch.com"; s.prop1 = "Article"; s.prop2 = "MW_Commentary"; s.prop5 = "http://www.marketwatch.com/story/steve-jobs-and-the-miracle-of-cupertino-2011-01-19"; s.prop6 = "http://www.marketwatch.com/story/steve-jobs-and-the-miracle-of-cupertino-2011-01-19"; s.prop7 = "off"; s.eVar11 = "MarketWatch"; s.pageName = "MW_Article_Jon Markman's Speculations_8ACF0CD6-23EA-11E0-A9F3-00212804637C"; s.prop3 = "MW_Article_Jon Markman's Speculations"; s.prop4 = "MW_article_Jon Markman's Speculations_Steve Jobs and the miracle of Cupertino"; s.prop8 = "MarketWatch.com"; s.prop19 = "article"; s.prop20 = "8ACF0CD6-23EA-11E0-A9F3-00212804637C"; s.prop21 = "Jon Markman"; s.prop22 = "MW_Article_Jon Markman's Speculations"; s.prop23 = "1/19/2011 1:27:29 PM"; s.prop26 = "MW_Article_Jon Markman's Speculations"; s.prop38 = "Computer Hardware|Computer Software|Software|Telecommunications|Fiber Optics|Household Products|Manufacturing|Opinion|Commentary|Earnings|Earnings/Earnings Advisories|General||US"; s.hier1 = "MarketWatch,Article,MW_Commentary,MW_Article_Jon Markman's Speculations,MW_Article_Jon Markman's Speculations,MW_Article_Jon Markman's Speculations,8ACF0CD6-23EA-11E0-A9F3-00212804637C,MW_article_Jon Markman's Speculations_Steve Jobs and the miracle of Cupertino,http://www.marketwatch.com/story/steve-jobs-and-the-miracle-of-cupertino-2011-01-19"; s.hier2 = "MarketWatch,article,MW_Commentary,MW_Article_Jon Markman's Speculations"; s.hier3 = "MarketWatch,MW_Commentary,MW_Article_Jon Markman's Speculations,MW_Article_Jon Markman's Speculations_8ACF0CD6-23EA-11E0-A9F3-00212804637C"; s.hier4 = "MarketWatch,MW_Commentary,Article"; s.events = "event12,event18"; s.prop9 = "free"; s.prop10 = ""; s.prop11 = ""; s.prop13 = "commentary_story"; s.prop25 = ""; s.prop27 = "nomem"; s.eVar4 = "MW_Article_Jon Markman's Speculations_8ACF0CD6-23EA-11E0-A9F3-00212804637C"; s.eVar31 = "Wednesday"; s.eVar32 = "13:00"; /************* DO NOT ALTER ANYTHING BELOW THIS LINE ! **************/ var s_code=s.t();if(s_code)document.write(s_code) }//--> DM_cat("MarketWatch > Article > MW_Commentary > MW_Article_Jon Markman's Speculations"); DM_tag(); document.write(''); (function () { var d = new Image(1, 1); d.onerror = d.onload = function () { d.onerror = d.onload = null; }; d.src = ["//secure-us.imrworldwide.com/cgi-bin/m?ci=us-403743h&cg=0&cc=1&si=", escape(window.location.href), "&rp=", escape(document.referrer), "&ts=compact&rnd=", (new Date()).getTime()].join(''); })(); var _bgProxyUrl = "/bgproxy/bgproxy/forward"; $(function() { BlueGrass.Runtime.openConnection({}, function(connection, type) { if (type == "connect") { BlueGrass.MarketState.setup(); BlueGrass.Quote.setup(); } }); }); $(function() { var ajaxUrl = "/story/story"; MarketWatch.Story.InitializeStory(ajaxUrl, "http://system.marketwatch.com/newscloud/docguid/8ACF0CD6-23EA-11E0-A9F3-00212804637C", "Steve Jobs and the miracle of Cupertino", "http://www.marketwatch.com/story/steve-jobs-and-the-miracle-of-cupertino-2011-01-19"); }); window.fbAsyncInit = function() { FB.init({ appId: "283204329838", cookie: true, // these two are not required for partners that status: true, // only rely on stk plugins and don't use connect xfbml: true }); FB.XFBML.parse(); setTimeout(function() { $('#fblike').show(); }, 500); }; (function() { var e = document.createElement('script'); e.async = true; e.src = document.location.protocol + '//connect.facebook.net/en_US/all.js'; document.getElementById('fb-root').appendChild(e); }()); //$(document).ready(function() { var storywidth = $('#mainstory').width(); var maxwidth = storywidth; $('#maincontent pre').each(function(index,value) { var thiswidth = $(value).width(); if (thiswidth > maxwidth) maxwidth = thiswidth; }); var offset = maxwidth - storywidth; if (offset > 0) { var margin = 13; var blanketwidth = $('#blanket').width(); var contentwidth = $('#maincontent').width(); $('#blanket').width(blanketwidth + offset + margin); $('#maincontent').width(contentwidth + offset + margin); $('#mainstory').width(storywidth + offset + margin); } //}); window.fbAsyncInit = function() { FB.init({ appId: "283204329838", cookie: true, // these two are not required for partners that status: true, // only rely on stk plugins and don't use connect xfbml: true }); FB.XFBML.parse(); setTimeout(function() { $('#fblike').show(); }, 500); }; (function() { var e = document.createElement('script'); e.async = true; e.src = document.location.protocol + '//connect.facebook.net/en_US/all.js'; document.getElementById('fb-root').appendChild(e); }()); $(document).ready(function() { $("#commentarycarousel").mouseover(function(e) { e.preventDefault(); $(this).unbind(); MarketWatch.Panels.UpdateCarousel({ carouselDivId: 'commentarycarousel', carouselSize : 5}); }); }); $(function() { }); if(MarketWatch.Member != undefined && MarketWatch.Member.setUserLevel) { MarketWatch.Member.setUserLevel(MarketWatch.Member.UserLevel.unknown); } $(document).ready(function() { jQuery.validator.setDefaults({ highlight: function(element, errorClass) { $(element).addClass(errorClass); $(element).prev().addClass(errorClass); }, unhighlight: function(element, errorClass) { $(element).removeClass(errorClass); $(element).prev().removeClass(errorClass); } }); jQuery.validator.addMethod("checkUserName", function(value) { var userNameRX = /^[a-zA-Z0-9]+[a-zA-Z0-9]+[a-zA-Z0-9]$/; return userNameRX.test(value); }, ""); $("#registerForm").validate({ rules: { UserName : { required: true, rangelength: [4, 20], checkUserName:true }, ExistingEmailAddress: { required: true, email: true }, ConfirmExistingEmailAddress: { required: true, equalTo: "#ExistingEmailAddress", email: true } }, errorPlacement: function(error, element) { } }); $("#registerForm #username").focus(); if(MarketWatch.Member && MarketWatch.Member.init) { MarketWatch.Member.init(); } });Email address or display name
Password
Remember me
Forgot password?
The action you requested requires a MarketWatch Community display name.Sign In
Email address or display name
Password
Remember me
Forgot password?
Community
Get your FREE membership now »MarketWatch Community is a free service that lets you discover, organize and share MarketWatch stories with other readers.
Learn More »
The action you requested is only available to MarketWatch members.Please sign in or register.Sign In
Email address or display name
Password
Remember me
Forgot password?
Register
Don't have a MarketWatch account?
Get your FREE membership now »By registering, you are agreeing to MarketWatch's Terms of Service and to receiving periodic news and special offers via email about MarketWatch enhancements, products and services.
$(document).ready(function() { MarketWatch.News.setNewsBoxUrl('/news/headline/getheadlines'); }); $(function() { BlueGrass.Runtime.openConnection({}, function(connection, type) { if (type == "connect") { BlueGrass.Conga.setup(); if (typeof liveBroadcast != "undefined") { //if there are broadcasts scheduled (test should fail on any non section page) //start the live video polling MarketWatch.LiveVideo.beginPolling(); } } }); }); $(document).ready(function() { MarketWatch.DockingBar.setAlertsBoxUrl('/user/alerts/getalerts'); }); if(gomez != undefined) { gomez.endInterval("Page Load"); } ScrillaZilla.Escort.addClient( ScrillaZilla.Client('#ad_quotepeek2053059580', { ord : 2041175501, src : 'http://ad.doubleclick.net/adi/marketwatch.com/sponsor_livequotes;sym=AAPL;u=%5e%5e;sz=220x32;tile=1;ord=', width : '220', height : '32', lateLoad : false, refresh : false, independentRefresh : false, refreshRate : 480000, refreshDomain : "", type : "iframe", refreshUrl : "/cdn_content/business/re.html" }) ); ScrillaZilla.Escort.addClient( ScrillaZilla.Client('#ad_quotepeek77678882', { ord : 2041175501, src : 'http://ad.doubleclick.net/adi/marketwatch.com/sponsor_livequotes;sym=XOM;u=%5e%5e;sz=220x32;tile=1;ord=', width : '220', height : '32', lateLoad : false, refresh : false, independentRefresh : false, refreshRate : 480000, refreshDomain : "", type : "iframe", refreshUrl : "/cdn_content/business/re.html" }) ); ScrillaZilla.Escort.addClient( ScrillaZilla.Client('#ad_quotepeek77678162', { ord : 2041175501, src : 'http://ad.doubleclick.net/adi/marketwatch.com/sponsor_livequotes;sym=NOK;u=%5e%5e;sz=220x32;tile=1;ord=', width : '220', height : '32', lateLoad : false, refresh : false, independentRefresh : false, refreshRate : 480000, refreshDomain : "", type : "iframe", refreshUrl : "/cdn_content/business/re.html" }) ); ScrillaZilla.Escort.addClient( ScrillaZilla.Client('#ad_quotepeek1690816175', { ord : 2041175501, src : 'http://ad.doubleclick.net/adi/marketwatch.com/sponsor_livequotes;sym=MSI;u=%5e%5e;sz=220x32;tile=1;ord=', width : '220', height : '32', lateLoad : false, refresh : false, independentRefresh : false, refreshRate : 480000, refreshDomain : "", type : "iframe", refreshUrl : "/cdn_content/business/re.html" }) ); ScrillaZilla.Escort.addClient( ScrillaZilla.Client('#ad_quotepeek668544352', { ord : 2041175501, src : 'http://ad.doubleclick.net/adi/marketwatch.com/sponsor_livequotes;sym=INTC;u=%5e%5e;sz=220x32;tile=1;ord=', width : '220', height : '32', lateLoad : false, refresh : false, independentRefresh : false, refreshRate : 480000, refreshDomain : "", type : "iframe", refreshUrl : "/cdn_content/business/re.html" }) ); ScrillaZilla.Escort.addClient( ScrillaZilla.Client('#ad_quotepeek1132179241', { ord : 2041175501, src : 'http://ad.doubleclick.net/adi/marketwatch.com/sponsor_livequotes;sym=DELL;u=%5e%5e;sz=220x32;tile=1;ord=', width : '220', height : '32', lateLoad : false, refresh : false, independentRefresh : false, refreshRate : 480000, refreshDomain : "", type : "iframe", refreshUrl : "/cdn_content/business/re.html" }) ); ScrillaZilla.Escort.addClient( ScrillaZilla.Client('#ad_quotepeek37009960', { ord : 2041175501, src : 'http://ad.doubleclick.net/adi/marketwatch.com/sponsor_livequotes;sym=MSFT;u=%5e%5e;sz=220x32;tile=1;ord=', width : '220', height : '32', lateLoad : false, refresh : false, independentRefresh : false, refreshRate : 480000, refreshDomain : "", type : "iframe", refreshUrl : "/cdn_content/business/re.html" }) ); ScrillaZilla.Escort.addClient( ScrillaZilla.Client('#ad_quotepeek1085121426', { ord : 2041175501, src : 'http://ad.doubleclick.net/adi/marketwatch.com/sponsor_livequotes;sym=DIS;u=%5e%5e;sz=220x32;tile=1;ord=', width : '220', height : '32', lateLoad : false, refresh : false, independentRefresh : false, refreshRate : 480000, refreshDomain : "", type : "iframe", refreshUrl : "/cdn_content/business/re.html" }) ); ScrillaZilla.Escort.addClient( ScrillaZilla.Client('#ad_quotepeek1591023426', { ord : 2041175501, src : 'http://ad.doubleclick.net/adi/marketwatch.com/sponsor_livequotes;sym=GE;u=%5e%5e;sz=220x32;tile=1;ord=', width : '220', height : '32', lateLoad : false, refresh : false, independentRefresh : false, refreshRate : 480000, refreshDomain : "", type : "iframe", refreshUrl : "/cdn_content/business/re.html" }) ); ScrillaZilla.Escort.addClient( ScrillaZilla.Client('#ad_quotepeek372029404', { ord : 2041175501, src : 'http://ad.doubleclick.net/adi/marketwatch.com/sponsor_livequotes;sym=F;u=%5e%5e;sz=220x32;tile=1;ord=', width : '220', height : '32', lateLoad : false, refresh : false, independentRefresh : false, refreshRate : 480000, refreshDomain : "", type : "iframe", refreshUrl : "/cdn_content/business/re.html" }) ); ScrillaZilla.Escort.addClient( ScrillaZilla.Client('#ad_quotepeek124732459', { ord : 2041175501, src : 'http://ad.doubleclick.net/adi/marketwatch.com/sponsor_livequotes;sym=JPM;u=%5e%5e;sz=220x32;tile=1;ord=', width : '220', height : '32', lateLoad : false, refresh : false, independentRefresh : false, refreshRate : 480000, refreshDomain : "", type : "iframe", refreshUrl : "/cdn_content/business/re.html" }) ); ScrillaZilla.Escort.addClient( ScrillaZilla.Client('#ad_StoryToolsSponsorship', { ord : 2041175501, src : 'http://ad.doubleclick.net/adi/marketwatch.com/sponsor_articletools;u=%5e%5e;sz=234x31;tile=1;ord=', width : '234', height : '31', lateLoad : true, refresh : false, independentRefresh : false, refreshRate : 480000, refreshDomain : "", type : "iframe", refreshUrl : "/cdn_content/business/re.html" }) ); ScrillaZilla.Escort.addClient( ScrillaZilla.Client('#ad_BrokerButton1', { ord : 2041175501, src : 'http://ad.doubleclick.net/adi/brokerbuttons.marketwatch.com/commentary_story;pos=1;u=%5e%5e;sz=288x40;tile=10;ord=', width : '288', height : '40', lateLoad : true, refresh : false, independentRefresh : false, refreshRate : 480000, refreshDomain : "", type : "iframe", refreshUrl : "/cdn_content/business/re.html" }) ); ScrillaZilla.Escort.addClient( ScrillaZilla.Client('#ad_BrokerButton2', { ord : 2041175501, src : 'http://ad.doubleclick.net/adi/brokerbuttons.marketwatch.com/commentary_story;pos=2;u=%5e%5e;sz=288x40;tile=11;ord=', width : '288', height : '40', lateLoad : true, refresh : false, independentRefresh : false, refreshRate : 480000, refreshDomain : "", type : "iframe", refreshUrl : "/cdn_content/business/re.html" }) ); ScrillaZilla.Escort.addClient( ScrillaZilla.Client('#ad_BrokerButton3', { ord : 2041175501, src : 'http://ad.doubleclick.net/adi/brokerbuttons.marketwatch.com/commentary_story;pos=3;u=%5e%5e;sz=288x40;tile=12;ord=', width : '288', height : '40', lateLoad : true, refresh : false, independentRefresh : false, refreshRate : 480000, refreshDomain : "", type : "iframe", refreshUrl : "/cdn_content/business/re.html" }) ); ScrillaZilla.Escort.addClient( ScrillaZilla.Client('#ad_BrokerButton5', { ord : 2041175501, src : 'http://ad.doubleclick.net/adi/brokerbuttons.marketwatch.com/commentary_story;pos=5;u=%5e%5e;sz=288x40;tile=14;ord=', width : '288', height : '40', lateLoad : true, refresh : false, independentRefresh : false, refreshRate : 480000, refreshDomain : "", type : "iframe", refreshUrl : "/cdn_content/business/re.html" }) ); ScrillaZilla.Escort.addClient( ScrillaZilla.Client('#ad_BrokerButton6', { ord : 2041175501, src : 'http://ad.doubleclick.net/adi/brokerbuttons.marketwatch.com/commentary_story;pos=6;u=%5e%5e;sz=288x40;tile=15;ord=', width : '288', height : '40', lateLoad : true, refresh : false, independentRefresh : false, refreshRate : 480000, refreshDomain : "", type : "iframe", refreshUrl : "/cdn_content/business/re.html" }) ); ScrillaZilla.Escort.addClient( ScrillaZilla.Client('#ad_DisplayAd1', { ord : 2041175501, src : 'http://ad.doubleclick.net/adj/marketwatch.com/commentary_story;p39=;u=%5e%5e;sz=300x250,336x280,300x600,336x850;tile=6;ord=', addPeer39 : true, lateLoad : true, refresh : false, independentRefresh : false, refreshRate : 480000, refreshDomain : "", type : "script", refreshUrl : "/cdn_content/business/re.html" }) ); MarketWatch.Kiosk.setup("#kiosk", { startIndex: 6, autostart: true, refresh: true, adInRotation: false }); MarketWatch.DockingBar.setExpandableAdIframeUrl("http://images.marketwatch.com/ads/bd/brokerdock.html"); $(function() { $("#fimtracking").attr("src", "http://s.marketwatch.com/public/resources/documents/PixelTracking.html?site=marketwatch.com&zone=commentary_story&cb=" + Math.floor(Math.random()*1000000)); }); bio.init();So how did the Apple miracle occur? You have to point to one man, and that is Jobs, who may have sacrificed his well-being to bring his company to this height. Strip away the numbers, and what's left is one person's vision, taste, engineering, ambition and charm that created two multibillion-dollar success stories "” animated film maker Pixar, sold to Walt Disney Co. /quotes/comstock/13*!dis/quotes/nls/dis (DIS 39.04, -0.35, -0.89%) a while ago, was the other "” that defied conventional wisdom and Wall Street expectations at every turn.
Of course, it wasn't always this way. Apple was an also-ran for almost 20 years, spending most of the 1990s and the first half of the 2000s in the dog house. If you just started to invest in the past five years, it may be hard for you to imagine but Apple for years was always like the loner, snooty, hipster kid at school that the in crowd mocked.
Sure the artists loved Apple's pretty white boxes and graphics software, and cooed about the long-haired, ethereal Jobs at the helm. But as a company and as a stock it could never get any respect. It seemed like whenever Apple did manage to bring out a product that looked promising, it could never produce enough of them, fast enough, to have its design prowess turn into earnings growth.
Reuters Apple Chief Executive Steve Jobs after the company's September media event in San Francisco.
Investors shunned the stock, and, by 2001, it was actually trading for less than the value of the cash on its books. I will never forget running into a friend who was one of Jobs's marketing geniuses that same summer. We were taking a break from cycling on Lake Washington Boulevard and as we downed espressos he lamented that he could not figure out why Wall Street would not give the company credit for all that it had accomplished throughout the years. The Street literally determined that Apple was worth more dead than alive.
My friend said he thought that Wall Street's perception would change once they saw a new project that they were working on. He couldn't tell me any details but he hinted that it was a new type of MP3 player. I nodded my head appreciatively, but in my mind I had the consensus view: Even if Apple did turn out to have some secret weapon, you could count on them to screw up the manufacturing or the supply chain.
Well that device turned out to be the iPod, and if you think about it now it's amazing that the company started its surge to the top ranks of American business with a little white device that only played music. There were a lot of player competitors at the time, but the iPod was different enough to catch your eye. The capacity was larger, it was easier to operate and it just felt very cool.
Suddenly Apple would be out of the domain of art directors and put its impeccable taste in the hands of consumers. That was Jobs's vision, and that was his contribution. He had a vision that design mattered, and that consumers would beat a path to his door if he could manufacture and market beautiful objects that performed a useful function at an affordable price. The brilliant effort to disintermediate the music industry from the album-selling process was another stroke of genius, as the 99-cent song and iTunes formed the foundation of the iPod franchise.
It actually took a long time for investors to appreciate this vision, and Apple shares did not start to take off until 2004. The reason was that people remained skeptical that Apple could match manufacturing and distribution prowess to its design success. After the company managed to bring out successive iPod models on time and without a hitch, shares broke out over their all-time high in early 2005, and then it was off to the races.
You may not know it, but you are probably a secret Apple stockholder. And maybe a big one. Brett Arends explains why.
The iPhone came along in 2007, and the initial reaction was muted. Wireless pundits could not figure out why Apple would want to take on the handheld device world which was low margin and packed with dozens of competitors. But again Jobs' design vision "” one button?! "” and marketing cunning won the day with consumers, and the company's newfound ability to manufacture in Asia effectively won the respect of its Wall Street critics. The cycle of skepticism, cynicism and then awe has been played out repeatedly now with successive Apple products, as the iPad was subjected to the same doubts.
Now investors apparently assume that Apple is a one-man show, with a single individual guiding every aspect of this product development, operations and marketing. This makes sense, since Jobs has been the man out front all this time.
But insiders report that Tim Cook has been running the retail and operational show behind the scenes for more than five years now, and that Jonathan Ive continues to be the design genius most responsible for the engineering for which Jobs gets credit. They are confident that Jobs "” while irreplaceable "” has prepared the company for his eventual exit, which has been expected for the past half-decade since he was diagnosed with cancer.
Jobs will go down in the history books as the equal of Thomas Alva Edison, who founded General Electric /quotes/comstock/13*!ge/quotes/nls/ge (GE 18.23, -0.38, -2.02%) ; Henry Ford, who founded Ford Motor Co. /quotes/comstock/13*!f/quotes/nls/f (F 17.84, -0.86, -4.60%) ; John D. Rockefeller, who founded Standard Oil; and J.P. Morgan /quotes/comstock/13*!jpm/quotes/nls/jpm (JPM 43.91, -0.84, -1.88%) , who started a certain eponymous bank. None of these gentleman had their success handed to them on a silver platter, but persevered with a vision and business proposition that was uniquely suited to their times.
Cheap lights, cheap cars, cheap gas, cheap money "” and now cheap music and not-so-cheap, but still beautiful and ubiquitous, mobile communications and entertainment. All these companies survived their founder, and so will Apple.
In the meantime, we are lucky to have had an opportunity to witness Jobs emerge, grow and cast his spell in our lifetimes, and I certainly wish him a speedy recovery. And as for the stock, well, Apple has been one of the few great holds of the past few years. Yet it also regularly provides new entry points. The next buying opportunity should emerge this quarter.
For more ideas like these, try a two-week trial to Markman's daily investment newsletter, Strategic Advantage , published in partnership with MarketWatch, or his daily trading newsletter,Trader's Advantage . Follow Markman on Twitter @jdmarkman
Jon Markman is a MarketWatch columnist. He runs a money-management and investment-advisory firm in Seattle.
Jon Markman is a money manager and investment adviser in Seattle. For more ideas like these, try a two-week trial to Markman's daily investment newsletter, Strategic Advantage, published in partnership with MarketWatch, or his daily trading newsletter, Trader's Advantage. His Twitter feed is @jdmarkman.
In Starbucks Corp.'s dynamic world, the future lies in buying coffee by swiping an iPhone or another smartphone, writes Jon Friedman.
11:21 a.m. Today11:21 a.m. Jan. 19, 2011
