Last week was an interesting week. Apple announced what appears to be a penis iron in the new iPad, and folks are burning through their monthly 4G data plans in a few hours. Tim’s having his first Antennagate moment, and Steve Jobs he isn’t.
On the other hand, Meg Whitman announced her first major restructuring since taking over HP, and on paper it not only looks impressive, but also is reminiscent of what Carly Fiorina attempted to do in a lot of ways. Fiorina was considered a strong visionary — she just wasn’t good with people and couldn’t execute. Whitman appears to have Fiorina’s vision and can execute, which bodes well for HP.
Ironically, the stock market continues to reward Apple and punish HP, which suggests the market remains consistently out of step with reality.
I’ll talk go deeper into that and close with my product of the week: another book on Apple by Carmine Gallo. The Apple Experience reveals the secrets of building insanely great customer loyalty. You might want to read this book fast. The way Cook is going, that fierce loyalty could soon become history.
Apple vs. HP
Both CEOs are new to their roles, and their companies are in vastly different places. Steve Jobs left Apple at the top of its game but also pretty solidly connected to Steve, who played three critical roles in the company. He balanced the different interests (engineering, design, finance); he was the super user who assured no product went out that wasn’t acceptable to customers; and he was the primary pitch man.
Meg Whitman stepped into an HP mess as Mark Hurd had so aggressively cut the company there was little more than a shell left in some places. In addition, there was an internal top executive (Todd Bradley) who was actively and publicly lobbying for her job, and Leo Apotheker, the interim CEO, had just completed making several catastrophic mistakes, killing off (granted, he may have been set up) the US$1.2 billion Palm acquisition and possibly overpaying massively for several additional acquisitions.
While Cook should have been able to hit the ground running, his position at Apple was to do the things Steve didn’t want to do and to never be a threat to Steve, which means he likely is everything Steve isn’t — yet he is trying to fit into a spot custom designed for Steve. Talk about your round peg in a square hole. Whitman jumped into a train wreck in progress and immediately had to move to triage in order to stabilize the patient.
This isn’t to say both roles aren’t difficult. Tim may have been set up to fail even though the company was operating at a very high level of competence, while Whitman had to figure out who to trust and where the bodies were buried before she could even move.
HP Status
So what we saw last week from Whitman was by the numbers. Like Carly, she has consolidated HP’s voice under people she can trust so she can craft a consistent impression of the company. This takes most marketing and communications responsibilities to the corporate level and should result in a vastly more consistent public image for the company.
She has consolidated much of the true power under David Donatelli and focused it away from technology and onto the customer set. This will allow him to better craft solutions that are designed to appeal to that defined customer set, and he owns product through sales.
Whitman had already placed her head of software, which is her fastest-growing and most-profitable unit (in terms of percentage) and made what likely is the company’s biggest shift — from thin-margin hardware to a tighter focus on thick-margin software. This is consistent with what IBM did some time ago but with tighter focus on the two very different skill sets.
Prior to the reorg, Whitman’s three problems were Printing and Imaging, Personal Technology and Todd Bradley. The two divisions appear to be in decline, and Bradley is the executive most likely to cause problems for her because he desperately wants her job. It is believed he was instrumental in creating one of the big HP problems that got Whitman’s predecessor fired.
Now those two units are merged under Bradley’s leadership. This new organization will be far easier to spin out, should Whitman need to eliminate all of these problems in one pass. And the complexity of the new entity should keep Bradley out of her hair for the foreseeable future, regardless. Elegantly played.
Apple’s Penis Iron
Cook has been increasingly compared to Jobs and found wanting. His last two product launches weren’t very exciting, and the new iPad appears to have serious problems. People have been writing to tell me they are returning theirs.
The problems range from poor WiFi reception and WAN data plans that run through their monthly allocation in hours, to the very high temperature that the iPad operates at, which Consumer Reports says could cause burns if held for a long period — like, say, if a child were playing games. Let’s just say when I get an ad about a product that will make me longer and harder I’m not expecting to get an iron, yet this Apple appears to be designed to take the creases out of my private part.
In short, for a device that typically is held for hours to consume online content, it sucks at being wireless — and it could burn you if used that way. Apple’s initial, and poorly thought through, response was “it is within spec,” which means that all of these problems were designed into the iPad. Maybe they are features intended to make us use the device less and get a life, but I doubt that was the intent.
But back to Steve Jobs’ three critical roles. One was as a proxy for the consumer, and this new iPad is heavier and has critical issues for users (connectivity and heat), which suggests someone didn’t fulfill Jobs’ quality-assurance role. Apple can certainly ride this out, but it does showcase that this one aspect of Jobs’ execution remains missing.
We already know Cook can’t present like Steve Jobs, and it is as yet unclear whether the proper balance is being maintained between design, engineering and finance. With this device alone, you could argue it is not a good balance, based on these problems (best to wait for the newer iPad).
Wrapping Up: The CEO Job Sucks
While Apple is outperforming HP, Whitman is clearly a bigger asset to HP than Cook is to Apple. She is clearly improving the mess she started with, while Cook appears to still be doing the job he did at Apple while Jobs was alive and leaving Jobs’ unique duties unstaffed.
Momentum will only carry Apple so far. It has a premium brand, and people expect a premium experience. If they don’t get it, the lines to buy their products will get ever shorter.
HP still has a long way to go before the company truly digs out, but you want to see progress in the right direction. In one move, Whitman has provided a mechanism to improve HP’s image, put her problems in one bucket, and set up a mechanism to throw the bucket away should she later need to.
It should be pointed out that given HP’s position, most roads lead up, while Apple is at a peak looking down at other companies, which suggests most of its roads lead down. Whitman is operating by the numbers, while Cook doesn’t seem to fully understand that critical things Steve did for Apple are currently not being done.
Product of the Week: The Apple Experience by Carmine Gallo
This is another in a list of books by Gallo that I think every consumer product manager and marketing executive should read. Apple remains the most valuable company in the world, and it still has the most loyal customers.
It has historically done this through Steve Jobs personally ensuring that its products met his demanding needs, that the stores were the best in the world, and that the customer experience was unmatched.
In fact, a secret is that the Apple hardware often really isn’t that great — it is the overall wonderful experience that makes the company so successful.
The Apple Experience collects a series of insights from Jobs’ world- leading practices to exemplify the benchmark in customer experience. Given that this is increasingly said in a historical context, I think it would do well for Apple executives to read this book as well, so they might stop degrading an experience that made Apple the most highly valued company in the world.
This book is the magic manual about Apple excellence — and when Apple is operating at its peak, there is no company better in technology. As a result, Carmine Gallo’s book, The Apple Experience, is my product of the week.
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While many of you seem to jump on Rob’s case, I would like to point out that this article is an Opinion. Noting more nothing less. Now with that said Rob I question your insight into a subject matter when you compare two CEO on avenues that aren’t even in the same city. The iPad 3 is rated a buy by CR and sold more in a week than the iPad 2. Furthermore since the death of Steve Jobs (R.I.P.) APPL has risen $236 as of today. HP while on a rebound has an up hill climb to Everest just to reach mid-level profits while fighting of the same companies as Apple. The only difference is Apple has stock pile of cash to which it can weather some pretty big storms that HP wouldn’t survive. It seems to me Rob that you are stuck in the mind set of the old pc vs mac wars, that you must now find another company to assume the attack with. HP not the greatest choice, but let me help you out. Apple vs everyone else As long as you focus on making a company an enemy, that company will always retain the underdog mindset and the majority of Americans always cheers for the underdog. Not you best article but definitively not your worst.
Only this author could come up with such a silly premise. Meg Whitman valuable to HP? The first year was a fiasco. Tim Cook has been invaluable to Apple for more than 10 years, and is considered the top executive in Just In Time manufacturing in the world. And Apple is doing just fine.
Californians dodged a bullet when we rejected Whitman as governor. She would have been worse than the Governator! HP wasn’t so lucky.
I AM hard pressed to imagine a situation in which my iPad would end up against my penis, regardless of how much heat it generates. Perhaps Mr Enderle does not really understand how to use a "tablet," or is this a typical configuration for PC-users…? (…and they call us the "fanboys"?)
I think eventually Apple will disappoint its followers. While I think Tim Cook can carry on the basics of running a company like Apple. I think Apple has lost its cult leader Steve Jobs. He was the mainstay that had that knack to make creative moves that were right with the consumer. Sometimes engineers and designers do not have that. For example Steve could have easily manipulated and explained away the whole iPad heating issue. People are second guessing Apple’s quality already and if that continues we may see consumers look differently at Apple. HP on the other hand has no where to go but up. They make some attractive hardware but many times it does not hold up to scrutiny when tested. Can they improve the real user experience? Time will tell. Let’s face it, Apple put itself on a high pedestal for quality so it must accept the fact that it must answer to those who question it. How it does that will determine how well it does in the future.
The new iPad must be a fantastic product if this is all you can find to complain about.
It falls on the carriers that they offer so small a data plan that it gets burned through in just a few days over LTE. And the very latest and greatest tablets out there competing with the new iPad all weigh about the same and heat up about the same as the new iPad does. I fail to see the point of the article, other than it being linkbait.
Obviously Technewsworld is a subsidiary of the National Enquirer if they let this kind of ludicrously counter-intuitive writing onto their pages.
It’s pathetic that a tech publication does not know just who this Enderle is, and how he biased he is against Apple. (See current nemesis running joke on Dilbert – him being Apple’s.)
The only conclusion one can draw is that the publication doesn’t care about the facts, or news, but simply getting as many hits as they can.
I’m going to contact each of the advertisers on Enderle’s page and let them know that I will actively avoid their products and services because they support this absolute drivel. I’ll also tell them to retract the nanopennies he just got for the click. Unbelievable. I totally agree with Gruber on this one.
My IRON MONKEY is stronger than his PENIS IRON! lol
This is so clearly a lame attempt to capture a lot of page views. The recipe is very familiar. Compose a clearly biased and completely incorrect article about anything Apple and wait to be charbroiled by the FanBois. Bonus, you bring out the wack jobs in the forums and you make a lot of money on the page views with your advertising agency.
This reply was written on the new "Penis Iron" which is funny because I’ve had it for weeks and it only gets slightly warm in the lower left corner when held in portrait mode. If it was in a case I wouldn’t even have noticed.
I have 4G LTE and I haven’t managed to max out the bandwidth because I wasn’t stupid enough to perform an iCloud restore over LTE which would have actually worked (unlike AT&T) but also gobbled up a months worth of bandwidth. Nor have I been watching NetFlix over LTE. It is not Apples fault if ignorant reporters with an evaluation iPad w/LTE don’t understand what Verizon is selling or how much data they are using. But the iPad will warn you if you are about to run out of bandwidth. At least Apple negotiated a no contract data plan which cannot be said of any other tablet, *cough*, Motorola ZOOM.
Ironically, (ooh I made a pun) the HP laptops we have contribute greatly to keeping our heating bill down. Have to prop some of them up on a stand or the rubber feet melt and they stick to the desk! Not to mention the pitiful battery life when compared to an iPad.
Meanwhile Apple sells 10 million iPads in 3 days and now Angry Birds Space sells just as many copies for a rough pre-tax profit of $20.9 Million! While every other tablet collects dust on the Best Buy shelves.
Tim Cook is doing just fine as CEO, the stock is way up. Sales are way up and he’s not getting recalled from a China visit to address roast iPad gate because there is no problem. If there was a heat problem it would have seen a lot more attention by now.
HP has lost their way and Whitman is lost in the dark without a flashlight. Dell is about to get out of the retail PC business and go for corporate and data center sales only. But they still want to compete with Apple on tablets?
Apple is playing like a grandmaster chess champion, thinking 10 moves ahead while the competition is still trying to figure out the last move.
Do you know how much money I made after I bought Apple stock at $9 a share when Jobs first returned? Laughing all the way to retirement baby! PS, I hated Macs until OSX.
Signed, a Unix engineer & developer.
"Ironically, the stock market continues to reward Apple and punish HP, which suggests the market remains consistently out of step with reality."
You can’t possibly be serious?? Apple just had the biggest quarter of any company EVER that wasn’t an oil company. 4th best quarter if you count the oil companies. You think this is suddenly going to come to a halt? HP, on the other hand, is a mess and shows no exterior signs of improvement and little growth.
"…the very high temperature that the iPad operates at, which Consumer Reports says could cause burns if held for a long period"
Again, hogwash. Consumer Reports never said the iPad could cause burns. They said burns could be caused by holding a device that was 120 degrees for long periods of time. The iPad doesn’t reach 120 degrees. As it turns out, other tablet devices get as hot as the iPad. This is just plain irresponsible journalism.
Congratulations on compromising your credibility for page views. You should try your hand at midnight infomercials.
If you were actually paying attention to the CR article on the new iPad instead of being an Apple hater, you would have seen that the new iPad is BELOW the 120 degree threshold that could possibly cause burns if used against bare skin for a prolonged period of time. Having that set of facts in mind, do you often use Apple’s new "Penis Iron" against your bare skin?
Mr. Enderle:
My presumption is that Mr. Cook will work out at Apple, Inc. After all, he has been there for a few years and likely knows what he is doing to make Apple successful. While he may not now have the full vision of Mr. Jobs in terms of the products, the design and the "think different" way of Apple, Mr. Jobs would likely not have chosen Mr. Cook to lead this firm had he had any hesitation. While I do not know Mr. Cook, I have certainly had conversations with Mr. Jobs and believe I understood his vision for this firm. That vision has likely been passed on to Mr. Cook.
Ms. Whitman’s vision though is a different issue. I believe that she is guiding HP in the same way that the Costa Concordia Captain was guided into the rocks off the Italian coast. Combining the HP printer division with the PC division is a very serious mistake in my view. They are very different, not compatible with each other and this is a serious error on her part in terms of the future of this great and this historic company. Ms. Whitman, I suspect, does not have either the vision of Mr. Jobs nor the vision that Mr. Cook has assumed.
BTW, I AM long with APPL, unlike your lack of disclosure in your article regarding Apple and HP. I understand from research that you are an adviser to HP. Be ethical Sir, like I AM with my students. Do this every time you report as a good reporter should.
Thank you.
Barry Humphus
Going for the nerd "shock and awe" award of the week, are we?