Apple Customers Actually Come First

I have remarked about Going Private, but Sunday's post takes the cake and the icing; loaded, as it is, with intelligence, insights, understanding, and wisdom. And all to share the writer's bullish perception of Apple (AAPL).

As you know, I have been bullish on Apple for several years; it has been a Core Opportunity for almost as long. No surprise, then, that I agree with her (Ms. Private Equity).

"I admit, grudgingly, to owing an iPhone. I bought it in time (that is to say foolish-early enough) to have Mr. Jobs give me one of those $100 "Sorry I screwed you on the price" rebates. I also have to admit to owning a top of the line 15" MacBook Pro (I bought after the latest upgrades - watching a colleague run Excel on a Windows XP instance isolated from the rest of his system and displayed in a window on his OS X desktop was the last straw). Before that, I had two white, Intel MacBooks. This is unusual, because three and a half years ago, I never would have bought Apple. This last, that new Apple owners almost find themselves surprised to own an Apple, seems a common trait among the, admittedly small, sample of Apple owners I have encountered. I've watched four or five people who swore they would never own an iPhone give in, buy them and proclaim, in such similar tones one wonders if The Amazing Alexander works for Apple now ("I loved it. It's much better than PC. I am going to buy it again, and again and again..."), that it is the best phone they have ever owned. And this is where I began to wonder, why the near epiphany in reaction? Now I think I know.

Why this reluctantly amazed reaction among iPhone buyers?

Because the definition of "phone" created by hardware and network providers today is so limited.

Why have so many Macintosh buyers had the same reaction?

Because the conventional definition of "laptop" or "operating system" or "computer" created by hardware and software providers today is so limited. Because these companies hate consumers, hate their desires, hate their needs and, consequently, make sure that the conventional definition of, e.g., "laptop," or "phone" is very limited.

Why is this? I blame Michael Eugene Porter..."

This essay merits your attention on any number of levels, irrespective of whether you are long Apple, merely bullish, or even a bear on the company. But what makes this essay a special treat is her irreverent wit; again and again I find myself smiling, chuckling, and laughing. That rare ability, to be concurrently edifying and entertaining, makes Private Equity a must-read for all serious investors.

Full Disclosure: Long Apple.

Comments

[wallawallab...:]

The proverbial chickens are coming home to roost.

Yes, Apple is the best value.

More than that, it is a company that actually cares about users, consumers, and the user experience. That's why they will prevail.

2008 Apr 30 05:30 AM

[Mac'em X:]

It's a long middle section before the linked article gets back to Apple toward the end, but it's all a good read. Thanks, DG, for pointing out a great writer I'd never heard of.

The article's last line is spot-on: "Why do I love Apple? They intend to make money because of my desires, not despite them." That's the area where Apple "gets it"; the naysayers who don't see that, and instead mumble about cheap white-box PCs and enterprise's eternal ties to MS Exchange and Windows-only game titles, are missing a very powerful IT sea change and investor opportunity.

2008 Apr 30 09:07 AM

[Jon T:]

Apple Exec's say it all the time: Apple makes products their people want.

Sounds so simple.

2008 Apr 30 09:11 AM

[brewer:]

I'm more convinced every day that Apple will take a very large share of the computer market in the next few years. They already own the iPod and increasingly, the smart phone market, with no real competition in sight. They even have a thriving retail presence, and one of the most successful online stores (two of them actually, when you consider the online apple store as well as iTunes.

2008 Apr 30 09:19 AM

[rip:]

What you are talking about and referring to is the core philosophy at Apple. This philosophy comes directly from Steve Jobs and permeates through the company.

What is it? To attempt to create the best product possible in an attempt to actually improve a customer's quality of life. Apple actually attempts to create products that will change the world. While many companies pay lip service to this, Apple actually executes. They take an idea or product and continually refine it, until it is the best that they think they can do. In other words, they sweat the details.

Another fundamental philosophy at Apple is that humans actually sit at the top of the pyramid. In other words, Apple believes that technology should be adapted to work the way humans think they should work. Companies like Microsoft, on the other hand, seem to elevate technology above people, instead creating technology that requires humans to adapt to it. The result, Apple creates intuitive products and Microsoft creates unintuitive or counter-intuitive products.

Apple would create a hammer that looks like a hammer. It's method of use would be instantly obvious.

Microsoft would create a hammer that is equally useful, if not more, but would require a manual and training to figure out how to use it.

2008 Apr 30 03:21 PM

[paul:]

Apple has good equipment. It is more expensive and you are captive to what Apple deems that you may want or need, which they have done a good job of for neophytes. However, if you want value and to be able to pick from multiple hardware sources, Apple is not the answer.

2008 Apr 30 07:11 PM

[Lucmee:]

Oh Paul! Neophytes?!?! Don't be truculent... Most creative types and nearly all media and publishing houses use Apple equipment.. . And seeing as Apple seems to be the fastest...nay ... only make of computer that can boast huge gains in desktop and laptop sales... Don't you think it's a bit elitist and bitter sounding to call so many people neophytes?... Please ...pray tell...What makes your needs so special that something in Apples lineup won't meet your needs.... Can't be rocket science... Because I personally know several that are happy Apple "neophytes"... As are several research and theoretical scientists I know. There are any number of mainstream and specialty publications that would beg to differ on your claim of "value" when it comes to Apple products in comparison to "multiple" hardware sources.... Churlish is not pretty.

2008 Apr 30 09:36 PM