How to Save the Heart and Soul of Apple

You didn't know that Apple needed saving? Some of its stanchest supporters think so. Let's take a look.

No this isn't about what will be in the iPhone 7 or if the iPad Pro is superior to other tablets or the Microsoft Surface Pro 4. There is a current of discontent in the most loyal of Apple customers - their high end Mac installed base. This rewinds back to the iconic 1984 ad that launched the Apple Macintosh in a commercial conceived by Chiat/Day and directed by Ridley Scott. Amazingly, it actually only aired one time as a commercial during the third quarter of the Super Bowl that year.

Since that time, no one challenges that Apple computer users are the most loyal and very committed to the brand and the technology. From an almost bankrupt company that was rescued by founder Steve Job's return in 1997, Fortune magazine reported earlier this year that Apple became the first company to be valued at over $700B - nearly twice as much as rivals Microsoft and Google and perennial market cap leader ExxonMobile.

While the company has had vocal critics, it has weathered many challenges to its brand dominance and has been able to maintain a loyal base of customers who rarely switch to competitors. Forbes 2015 listing of the top brands showed Apple to again be number one by a wide margin with a brand value of $145.3 B (#2 Microsoft was valued at $69.3 B). 

Loyalty Tested

No where has this loyalty been more tested recently than with Apple's high end users with what is still called the 'new' Mac Pro introduced in a not so recent 2013. Some in this group claim that their kind single handedly sustained Apple while awaiting the return of Steve Job's from his firing by the Board in 1985 to his re-hire in 1997 to a company operating at a loss. Before the iPod, iPhone, and the iPad he revitalized the Mac and introduced the iMac with the focus on the burgeoning digital and internet creative community.  

So what's the challenge these power users have with the new Mac Pro? Not power or performance - they are superior. It's once again also has trendsetting looks and ergonomics departing from an antiquated desk side PC look to a modern, cylindrical mini-tower that looks more like the Star Wars character R2D2 (new Mac Pro partially opened pictured left).

What it missed for many high end users is that these powerful computers are networked, shared, and need access to a tremendous amount of data storage to hold pictures, movies, and audio during capture, editing, and final post-production. The new Mac Pro abandoned the industry standard PCIe interconnect method in favor of a new standard created by Intel jointly with Apple - Thunderbolt. While Thunderbolt has many advantages including higher bandwidth which can result in optimizing the core processors for audio and video manipulation, it is very poor at utilizing professionals' and businesses' existing digital assets based on PCIe interconnect technology.

As one example of this unrest, MacRumors asked its loyal readers in an ongoing poll if the new Mac Pro was a failure. As of December 2015, the unscientific poll indicates 57.6% say yes it is a failure for them. My interpretation of the comments under the poll is that these Apple loyalists feel their needs have been ignored (an opened 2010 classic Mac Pro pictured left to show internal connectivity). With all the additional storage required and the  somewhat stiff and fragile thunderbolt cables external to the system, the operational new Mac Pro can look like a rats nest of cables and devices on a desk or the floor that can inadvertently disconnect from the system.

Does Apple Need to Solve All Their Loyalists Problems? 

Apple may choose to, but likely not. I've been around the PC wars since the beginning and have participated in the battles first hand between Microsoft and the UNIX community and Apple, Microsoft, and HP for control of the user interface. As an adviser to many CEOs and technology businesses, its clear to me that Apple has reached the size that there are many products that they would like to build but can't profitably bring to market.

This may look like abandoning to the loyalists but they also need a healthy Apple company to provide the core products that will meet their business needs as their industries are disrupted by technology and innovation too.

Apple's integrated all-in-one systems, that started with Job's return and the iMac, don't necessarily lend themselves to third party add-ons. If anything, the classic Mac Pro was the anomaly, with an easier path for adding third party devices. The new Mac Pro isn't necessarily trying to close that loophole, but it does seem to be a return to technology driven decisions leading to purpose built products designed for modern use.

Thunderbolt to PCIe to the Rescue

It's clear to me that its not in Apple's best interest to build a PCIe to Thunderbolt integration product. It will cost too much, slow adoption of Thunderbolt, and likely be very unprofitable. Three strikes you're out! But this decision is what makes the technology culture so amazing - it creates opportunity for other companies to come in and profitably serve a hole left by the business realities of the big companies. And by any measure Apple, for all its folk lore, is a huge company now.

Several companies have created Thunderbolt to PCIe connected peripherals. A quick review of retailer B&H Photo's website shows companies like JMR Electronics, Sonnet, Magma, and others providing PCIe expansion chassis with Thunderbolt connections. One of the most established firms of this group and one that I am most familiar with has been inventing and delivering storage technology since before the beginning of Apple's rise to fame with the 1984 Super Bowl ad - JMR. They seem to have gone "all in" and made a corporate commitment to fill the void and and are supporting Apple Mac Pro users classic need for PCIe while leveraging the new power of Thunderbolt.

Unique to JMR and to the delight of Mac Pro enthusiasts, JMR has created a chassis that in many ways looks like a modern version of the classic Mac Pro (pictured opened to the left with a new Mac Pro installed and connected to PCIe storage) - building in all the connectivity these Apple loyalists are used to in their classic systems while also housing the new cylindrical Mac Pro.

JMR has also built a racking system so these cylindrical new Mac Pros can be conveniently rack mounted and connected into a larger network. BroadcastBeat recently published an article highlighting JMR's latest product announcement and their Thunderbolt certification and Intel and Apple approval. Below and in the article is a video that captures long time Mac user's Bob Zelin’s (blogger and his company Rescue 1 installs and maintains facilities in the professional television and audio industry) and Walter Biscardi’s (WallyCam and his company Biscardi Creative Media is a full service digital media production company) enthusiastic reaction to JMR's invention. 

Imaginative Understanding of User Needs

Apple has long excelled at this virtue and it is at the heart and soul of this technology leader. The spirit of invention and anticipating customer's needs has also been a cornerstone of the technology industry. Innovation and disruption creates new companies, new wealth, and improvements that, mostly, positively affects businesses and personal lives. But innovation and disruption will leave holes especially bridging the old to the new.

Does this mean that the innovators like Apple has lost its "soul" or abandoned its loyalists? I'm sure the answer is no. This reality is at the heart of the classic problem first outlined by Clayton Christensen in his ground breaking book The Innovator's Dilemma. Large companies become trapped in mediocre, incremental improvements to appease their installed base of users. The installed base takes more and more capital starving the company's resources that they can apply to new innovations. 

This creates an opening for competitors and startups to innovate and disrupt the market while the once agile large companies are slow to change choosing to not disappoint their loyal users. Ultimately, that installed base will select the new innovation and create a crisis of profit loss that is remedied by acquisition, merger, or restructuring.

Apple Makes the Hard Choices

Apple has a made the more difficult decisions to continue to innovate and followed a path of not only Steve Jobs but also the two legendary founders of Silicon Valley - Bill Hewlett & Dave Packard. They and their executive team at HP demanded of us "an imaginative understanding of customers needs". This is the challenge of anticipating needs before the customer realizes they have them - which has endeared Apple's loyalists and early adopters to the company and in turn made them priceless to Apple. And also at times frustrated that loyal user base with decisions that don't support past purchases.

The 1984 Mac heart and soul of Apple is still intact. It is also alive in the innovators at the smaller companies like JMR that seize opportunity to build the larger ecosystem that supports innovation and bridging the gap between the installed base and next generation of technology.

Disclosure: I have worked at HP,  provided advisory services for JMR, and recently purchased an iMac as my primary creative workstation. Historically I've been a Microsoft Windows user and continue to use a Dell Windows 7 desk side system. As an investor and business owner at the writing of the post I do not own stock, options, or receive commissions on sales from any products, companies, books, or publications mentioned in this post. Please feel free to discuss your thoughts on the topics in this article and connect with me on LinkedIn. #newmacpro #thunderbolttopcie #linkedinpulse #applebestbrand #innovatorsdilemma