Business news

How Apple Thrived in a Season of Tech Scandals

By: Farhad Manjoo

The business world has long been plagued by Apple catastrophists — investors, analysts, rival executives and journalists who look at the world’s most valuable company and proclaim it to be imminently doomed.

The critics’ worry for Apple is understandable, even if their repeated wrongness is a little hilarious. Apple’s two-decade ascent from a near-bankrupt has-been of the personal computer era into the first trillion-dollar corporation has defied every apparent rule in tech.

Companies that make high-priced hardware products aren’t supposed to be as popular, as profitable or as permanent. To a lot of people in tech, Apple’s success can seem like a fluke, and every new hurdle the company has faced — the rise of Android, the death of Steve Jobs, the saturation of the smartphone market, the ascendance of artificial intelligence and cloud software — has looked certain to do it in.

But this year, as it begins to roll out a new set of iPhones, the story line surrounding Apple has improbably shifted. In an era of growing skepticism about the tech industry’s impact on society, Apple’s business model is turning out to be its most lasting advantage.

Because Apple makes money by selling phones rather than advertising, it has been able to hold itself up as a guardian against a variety of digital plagues: a defender of your privacy, an agitator against misinformation and propaganda, and even a plausible warrior against tech addiction, a problem enabled by the very irresistibility of its own devices.

Though it is already more profitable than any of its rivals, Apple appears likely to emerge even stronger from tech’s season of crisis. In the long run, its growing strength could profoundly alter the industry.

For years, start-ups aiming for consumer audiences modeled themselves on Google and Facebook, offering innovations to the masses at rock-bottom prices, if not for free. But there are limits to the free-lunch model.

If Apple’s more deliberate business becomes the widely followed norm, we could see an industry that is more careful about tech’s dangers and excesses. It could also be one that is more exclusive, where the wealthy get the best innovations and the poor bear more of the risks.

“Because of Apple’s business model — because their money comes from their profitable hardware — it has been much easier for them to make certain choices and certain arguments about how to address problems in the industry,” said Carolina Milanesi, an analyst at Creative Strategies, a technology research firm.

The thrust of Apple’s message is simple: Paying directly for technology is the best way to ensure your digital safety, and every fresh danger uncovered online is another reason to invest in the Apple way of life.

These aren’t new arguments for Apple. While Google and Facebook pursued globe-spanning scale by offering free or cheap services supported by ads, Timothy D. Cook, Apple’s chief executive, was warning of the risks of an internet advertising market run amok.

“I’m speaking to you from Silicon Valley, where some of the most prominent and successful companies have built their businesses by lulling their customers into complacency about their personal information,” he told an audience in 2015.

To many, including yours truly, Mr. Cook’s arguments sounded alarmist and self-serving. But after two years of scandal, he sounds farsighted.

Though their businesses keep chugging along, Facebook and Google, the world’s biggest internet ad companies, now face global scrutiny for the spread of disinformation, propaganda and what critics say is their products’ destabilizing effects on politics and society.

Amazon is beloved by customers, but its rapid growth has spurred economywide anxieties about the future of jobs. All three behemoths are considered growing targets for antitrust prosecution in the United States and elsewhere.

Apple’s business model, by contrast, insulates it from most of the tech fears that have emerged in the last few years. Although it makes the vast majority of the profits in the global smartphone business, Apple’s phones account for a minority of sales, blunting fears of monopoly.

Apple’s high prices also set up an expectation of safety, giving it a freer hand to police online properties like its app store, podcast directory and news app. A decade ago, when Mr. Jobs imposed rules on the iOS App Store banning scammy and pornographic apps, he was called a prude. Now his rules seem prescient.

Apple is hiring actual human journalists to build a subscription news service that could stand in contrast to the reckless news environment on social networks.

Its commitment to curating online experiences has also turned Apple into something like a moral arbiter for tech. When Apple decided to bar the right-wing conspiracist Alex Jones from its services this summer, it cut through much of the hand-wringing in the industry over Mr. Jones’s antics. Many other tech companies immediately followed its move.

Apple has not entirely escaped criticism in the Trump era. Its reliance on China, where it makes its products and expects to see much of its growth, and where its products abide by government censors, looks to be a rising liability.

Even when Apple’s products have been directly implicated in tech worries, its business model has helped it weather the storm. Consider the rising fears of “tech addiction,” the idea that kids and adults are spending too much mindless time in the digital world, egged on by tech companies’ insatiable need for our eyeballs.

In January, a pair of large Apple investors, Jana Partners and the California State Teachers’ Retirement System, wrote an open letter to Apple urging the company to address the issue. Charles Penner, a partner at Jana, told me that the campaign had targeted Apple because the company had every reason to respond.

“The biggest source of strength that Apple has is their ability to charge premium prices for their products,” he said. “Their value depends on people feeling safe and supported within their ecosystem.”

And, in fact, Apple responded. The company told the investors that it believed the overuse of tech was a serious issue, and that it had been working on it. In the summer, it unveiled a series of widely praised features meant to allow adults to police their own and their kids’ smartphone habits.

Google, apparently spurred by the same campaign, offered similar features for its Android phones. Mr. Penner told me that he appreciated the companies’ efforts, though he expects to keep pushing them to reduce their devices’ addictiveness.

Apple’s safety-first business model may become only more important as technology becomes even more intimate. The company’s latest phones can be unlocked with your face, while its watch includes sophisticated sensors to monitor your movements and your health. In pushing these and other advances, the company can reasonably argue that only its ad-free business can protect such sensitive information.

But it is worth noting that Apple’s model isn’t available to everyone. In the spring, after Mr. Cook took a few swipes at Facebook’s scandals, Mark Zuckerberg, Facebook’s chief executive, pointed out the inherent limits in Apple’s model.

“The reality here is that if you want to build a service that helps connect everyone in the world, then there are a lot of people who can’t afford to pay,” Mr. Zuckerberg told the journalist Ezra Klein.

Since then, Apple has raised the prices of its top-end phones, and as the smartphone market slows, the company’s pristine haven from the dangers of online life might get only more expensive.

Inequality is the story of our age, and it’s no surprise that it could become the dominant story line of tech, too. As the digital world gets scarier, Apple’s technology may come to resemble a high-priced oasis for the world’s rich. Everyone else takes their chances on a free lunch.

Follow Farhad Manjoo on Twitter: @fmanjoo

Advertisements
Business news, Inspirational

21 best quotes from Strive Masiyiwa

Strive Masiyiwa

1. If you are working or you are running a business you have to set aside time and money to invest in your continued formal education and skills acquisition.

2. Seeing the business side, is being business minded, you can train yourself to be business minded.

3. You can only find opportunities if you are looking for them.

4. You have to be very methodical in breaking down, the reason why something is successful. Most often it is not as simple as it looks.

5. Attitude sets the altitude.

6. Every game, has its own rules, and its own language… Learn the rules, and language of the money game!

7. Planning is important, for whatever you do, whether it is for profit, or not for profit.

8. As you set about your enterprise, you must always consider the consequences of your actions. Don’t just rush headlong into doing something; hoping it will work out, just the way you want it. There are many people who have caused suffering to themselves, or to their families, simply because they took on an opponent, who was bigger, and better resourced, or better skilled than themselves; without proper planning.

9. The moment I see a problem, I immediately begin to think about the opportunities that can be created by trying to solve it.

10. God will do nothing except you pray; and you have to be clear what you want.

11. No matter what business you are in, and no matter how small or mundane, the activities, there must be continuous investment in it.

12. Whether you’re a farmer, builder or engineer, the opportunities are equal: Just add a little innovation.

13. Keeping proper, written records, is key to your success… Keep the records safe, and always have copies”

14. A vision on its own is not enough. Hard work & dedication is required to make that vision a reality.

15. Attitude determines your altitude, if you have a bad attitude, even if you are way up there, you will come crashing down, and if you are still trying to take off, a bad attitude, will keep you on the ground, revving your engines but going nowhere.

16. Integrity is better capital than money. You can accumulate it just like money, and you can use it just like money, but it goes further, and is enduring.

17. Sitting down that afternoon, with a borrowed copy of the New International Version Bible, I sat down to read the bible for the very first time, in my life…….. I just read, and read, and read…Often, I would read the whole day, and the whole night… Finally I finished it after about three weeks.

18. Always seek to get deeper understanding of an issue first. Never accept that anything is as simple as it looks, in fact when something looks really simple, then you should approach it with caution, particularly if you have never done it before.

19. The bible teaches us that every one of us is a unique individual, an absolute original. For the greatness in you to emerge, you have to become yourself, first. You will never achieve this by impersonating someone else on Twitter or Facebook, no matter how great you think they are.

20. I started in business when I was 25 years old, with only $75, pooled between myself and a friend. We went around the suburbs fixing broken lights, and gates. We invested every cent, into doing bigger and bigger projects. For me, nothing has really changed in terms of those basic principles: you start with what you have, you do what you can, you invest what you get, so that you can do bigger and bigger things.

21. My favourite business book is the bible. If you study the bible with a view to extracting principles on how to set up, and manage a business effectively, you will be absolutely amazed; it has everything.

Business news

Early Life Story Of The Most Successful Business Investor In The World

Warren_Buffett_KU_Visit

Warren Buffett

Buffett was born in 1930 in Omaha, Nebraska, of distant French Huguenot descent. He was the second of three children and the only son of Leila (née Stahl) and Congressman Howard Buffett, Buffett began his education at Rose Hill Elementary School. In 1942, his father was elected to the first of four terms in the United States Congress, and after moving with his family to Washington, D.C., Warren finished elementary school, attended Alice Deal Junior High School and graduated from Woodrow Wilson High School in 1947, where his senior yearbook picture reads: “likes math; a future stockbroker.”

Buffett displayed an interest in business and investing at a young age. One of his first business ventures, Buffett sold chewing gum, Coca-Cola bottles, or weekly magazines door to door. He worked in his grandfather’s grocery store. While still in high school, he made money delivering newspapers, selling golf balls and stamps, and detailing cars, among other means. On his first income tax return in 1944, Buffett took a $35 deduction for the use of his bicycle and watch on his paper route. In 1945, as a high school sophomore, Buffett and a friend spent $25 to purchase a used pinball machine, which they placed in the local barber shop. Within months, they owned several machines in 3 different barber shops across Omaha. The business was sold later in the year for $1,200 to a war veteran.

Buffett’s interest in the stock market and investing dated to schoolboy days he spent in the customers’ lounge of a regional stock brokerage near his father’s own brokerage office. On a trip to New York City at age ten, he made a point to visit the New York Stock Exchange. At 11, he bought three shares of Cities Service Preferred for himself, and three for his sister Doris Buffett (founder of The Sunshine Lady Foundation). At the age of 15, Warren made more than $175 monthly delivering Washington Post newspapers. In high school, he invested in a business owned by his father and bought a 40-acre farm worked by a tenant farmer. He bought the land when he was 14 years old with $1,200 of his savings. By the time he finished college, Buffett had accumulated a princely sum of more than $90,000 in savings measured in 2009 dollars.

In 1947, Buffett entered the Wharton School of the University of Pennsylvania. He would have preferred to focus on his business ventures; however, he enrolled due to pressure from his father.  Warren studied there for two years and joined the Alpha Sigma Phi fraternity. He then transferred to the University of Nebraska–Lincoln where at nineteen, he graduated with a Bachelor of Science in Business Administration. After being rejected by Harvard Business School, Buffett enrolled at Columbia Business School upon learning that Benjamin Graham taught there. He earned a Master of Science in Economics from Columbia in 1951. Buffett also attended the New York Institute of Finance.

The basic ideas of investing are to look at stocks as business, use the market’s fluctuations to your advantage, and seek a margin of safety. That’s what Ben Graham taught us. 

By 1950, at 20, Buffett had made and saved $9,800 (over $96,000 inflation adjusted for the 2014 USD). In April 1952, Buffett discovered that Graham was on the board of GEICO insurance. Taking a train to Washington, D.C. on a Saturday, he knocked on the door of GEICO’s headquarters until a janitor admitted him. There he met Lorer Davidson, Geico’s Vice President, and the two discussed the insurance business for hours. Davidson would eventually become Buffett’s lifelong friend and a lasting influence, and would later recall that he found Buffett to be an “extraordinary man” after only fifteen minutes. Buffett wanted to work on Wall Street; however, both his father and Ben Graham urged him not to. He offered to work for Graham for free, but Graham refused.

Buffett returned to Omaha and worked as a stockbroker while taking a Dale Carnegie public speaking course. Using what he learned, he felt confident enough to teach an “Investment Principles” night class at University of Nebraska-Omaha. The average age of his students was more than twice his own. During this time he also purchased a Sinclair Texaco gas station as a side investment. However, this was not successful.

In 1952, Buffett married Susan Thompson at Dundee Presbyterian Church. The next year they had their first child, Susan Alice. In 1954, Buffett accepted a job at Benjamin Graham‘s partnership. His starting salary was $12,000 a year (approximately $105,000 inflation adjusted for the 2012 USD). There he worked closely with Walter Schloss. Graham was a tough boss. He was adamant that stocks provide a wide margin of safety after weighting the trade-off between their price and their intrinsic value. The argument made sense to Buffett but he questioned whether the criteria were too stringent and caused the company to miss out on big winners that had other appealing features. That same year the Buffetts had their second child, Howard Graham. In 1956, Benjamin Graham retired and closed his partnership. At this time Buffett’s personal savings were over $174,000 ($1.47 million 2012 USD) and he started Buffett Partnership Ltd..

Buffett’s home in Omaha

In 1957, Buffett operated three partnerships. He purchased a five-bedroom stucco house in Omaha, where he still lives, for $31,500.

— Warren Buffett

Business news

THE MYTH OF TREATING PEOPLE FAIRLY AND EQUALLY

The Myth of Treating People Fairly and EquallyBy Jeff Mowatt

I’ll just come right-out and say it. I believe that treating customers fairly and equally is a mistake. It’s unprofitable. It belittles customers and employees. And it’s unethical. There, I’ve said it.
Certainly, we should treat people fairly – but not equally. I’m not advocating some Orwellian decree that ‘some animals are more equal than others’. This has nothing to do with a customer’s value as a person. It has to do with bending so-called ‘rules’ to give exceptional customers the kind of unique service they deserve.
In my many years working as a consultant and trainer with dozens of companies and bureaucracies, it’s unfortunate that I continue to encounter employees who buy-in to the myth of the virtue of treating all customers equally. If this is the case in your organization, consider this scenario…
Imagine that as part of your daily routine, you stop into your local convenience store to buy a coffee and newspaper. The store employees know you by sight. One day you find yourself needing to change a $100 bill. You stop in, pick up a couple of items and pay for them with the hundred. The store has a policy that they don’t accept hundreds, so the cashier simply refuses you. You are fully aware that they make more than that much change every 15 minutes. You also know that when added-up, you’ve given them hundreds if not thousands of dollars worth of business over the years. Yet they refuse to grant you this slight favor. How’s your customer loyalty now?
Refusing your $100 bill would have been an incredibly bad decision on the part of the cashier as well as the management who created the ‘rule’ that permits no exceptions for the store’s best customers. The problem is that by definition a ‘rule’ treats everyone equally – whether it’s fair or not.
What if we treated our children this way?
Imagine the consequences of a parent treating their six-year-old and seventeen-year-old equally. That would mean telling the younger child, “Make sure you are home from grade one by midnight!” Most people appreciate that it makes sense to treat children fairly. It would, however, be a mistake to treat them all equally, and apply the same rules regardless of their ages. That’s more than just a mistake; we might even call it immoral.
We already discriminate in the workplace
There’s a certain irony to taking this approach to the workplace. The same individuals who assume that all customers should be treated equally, often have no objection whatsoever to the organization offering preferential parking and restroom facilities to customers with disabilities. Yet, that’s a blatant example of treating customers fairly but not equally. I don’t know of anyone who objects to organizations giving better parking spots to the disabled. Yet, every day we hear employees using inane statements like, “If I did that for you, I’d have to do it for everyone.” The challenge for business owners and managers is providing the kind of training and authority that front-line employees need, so that they will make more appropriate on-the-spot decisions for customers.
The truth about word-of-mouth
“What happens when customers talk to each other?” That’s one of the most common concerns I hear from employees in my training sessions where we address this subject. They are afraid that if they accommodate one customer’s special request, then that customer will talk to other customers, and the employee will be pressured to do the same for everyone, which, of course, they can’t do. In other words, they’re going to have a lot of unhappy people out there if they accommodate special requests. This is the kind of convoluted logic that stems from the underlying belief in treating everyone equally (not necessarily fairly). Another way of putting it is: I’m afraid that if I provide an extra service for one customer (because we made an error or the customer does a lot of business with us), then I’m going to disappoint other customers whose circumstances don’t warrant the extra service. So to avoid disappointing some people, we’ll just make a rule that no one gets special treatment. That way, we’ll just disappoint everyone, including customers whose unique situation deserves extra service.
Customers understand the concept of fairness. If I’ve never been to a particular convenience store and suddenly walk in just to change a hundred-dollar bill, I’m not likely to get outraged when the employee explains that they don’t have enough change on hand so they can’t help me. If, on the other hand, I’m doing business there every day, I’m more likely to be upset ifmy store won’t make change for me when I know they make that much change every fifteen minutes. If they do make an exception for me because I’m a good customer, I’m not going to rush out, phone all my friends, and tell them, “Hey, my convenience store made change for me, and they don’t usually accept hundreds!” Customers rarely go out of their way to talk about good service. The occasion when customers share information about a business is when the service is bad. Bottom line: employees needn’t worry about possible negative ramifications of taking extra care of good customers. What they should be far more concerned about is the negative impact of treating all customers the same.