Top of the techs — for now

Jonathan Ive, Apple’s head of design, has emerged as a totemic figure.

However, his departure from the company, as has been rumoured, would represent a big blow and signal a break with the Steve Jobs era, writes Kyran Fitzgerald

This week, Apple’s corporation market capitalisation reached $623.5 billion (€494.5bn), making it the most highly valued US company ever — good news for the 2,800 people employed by Apple in Ireland and the 500 more due to join by the end of 2013.

Apple’s market value finally surpassed the level achieved by its great rival Microsoft during the 1990s.

Trading at a p/e of just over 15 times earnings, supporters of the stock argue there is still scope for share price appreciation.

Petro China briefly achieved a valuation of $1 trillion after its share price tripled on its first day of trading in 2010.

The Chinese energy company has fallen back to earth — its market cap is currently just over $250bn, putting it at number four in the global league table behind Apple, Exxon Mobile, and Microsoft, currently weighing in at $258bn.

Such numbers, of course, are largely meaningless when viewed from the vantage point of ordinary customers and would-be customers, forced to join long queues at the Apple Stores opening across the world.

There real interest is in securing the latest must-have product and in wondering what the design team, led by London-born Jonathan Ive, will come up with next.

Ive is arguably the most influential designer in the world, ranking right up there with the great product designers of the modern world.

Educated in a Staffordshire comprehensive, Ive cut his teeth as a student at Newcastle Polytechnic.

As he told the Daily Telegraph recently, he benefited at college from proximity to graphic designers, fashion designers and fine art students, from what he termed “a density of creative diversity”, an atmosphere that he has sought to recreate in his 15 years in charge of design at Apple.

Ironically, he considered himself to be quite technically inept until he started to use an Apple Mac.

“I suddenly realised it was not me at all. The computers that I had been expected to use were dreadful.” This experience, he said, made him curious about the company behind the Apple Macintosh, the computer which transformed his attitude to computing.

Ive went on to co-found a design agency called Tangerine, working for Apple as a consultant. In 1992, he moved, full-time, to work for Apple at its headquarters in Northern California.

Ive has been credited as the creative force behind the iMac, launched in 1998 at a time when the company was close to bankruptcy.

The Apple iPod followed in 2001 and transformed the record industry.

The truly transformative event was the launch of the iPhone in Jan 2007. Apple’s share price has jumped five-fold since then.

In 2010, the iPad was launched, shaking up the traditional model of desktop-based computing.

Ive and his team are credited with quite novel approaches to idea development. When the original iMac was being planned, the team talked to people in the confectionery industry to get tips concerning the candy-covered shell of the computer.

As Ive puts it, “our goal is to try and bring a calm simplicity to what are incredibly complex problems”.

Ive benefited from the strong support provided by Apple’s late chief executive, Steve Jobs.

Jobs was the ultimate “visionary, micro-manager and showman”, according to Fortune, the business magazine, but he relied on Ive as a source of ideas.

The relationship was not without its share of tensions. Ive told Walter Isaacson, Jobs’ biographer that he got upset over the way Jobs took credit for the ideas generated by him and his team. This led to the erroneous impression that Jobs was Apple’s only ideas man, but Ive also acknowledged that “the ideas from my team would have been nowhere if Steve Jobs had not been there to push us.”

Jobs returned the compliment, speaking thus of Ive: “He understands what we do at the core better than anyone.”

Apple’ performance over the past decade is frequently contrasted with that of Microsoft.

At the end of Dec 1999, Apple was valued at less than $5bn, Microsoft at $620bn-plus.

A recent article in Vanity Fair highlighted the role bureaucracy has played in the relative stagnation at Microsoft. Many believe chief executive, Steve Ballmer, is not sympathetic enough towards innovators while performance management techniques have promoted a culture of risk aversion.

Apple sales have continued to soar in the absence of Jobs. Revenues in the fourth quarter of 2011 reached a staggering $46bn.

In 2011 alone, the Company sold 156m iPhones, iPads and iTouch devices. The company is targeting emerging markets while also eyeing new product areas.

There is much speculation about a move into flat screen TVs and a more radical move into the area of financial payments devices.

Apple’s secret lies in the tight integration of hardware and software for a “superior user experience”, according to author Chris Meyer, a regular contributor to the Harvard Business Review.

Chief executive Tim Cook is highly skilled at operational management. What is now required is a scaling up of operations to meet global demand.

China and the rest of the developing world now boast a fast-rising army of young consumers. Cracking this market is as much about logistics as innovation.

But the pipeline must continue if the company is not to start to drift, losing the very people who ultimately will drive it forward.

Apple has a cash mountain of $46bn at the last count. Cook has the happy dilemma of deciding what to do with this hoard.

Much of this money could be going Ive’s way, though there is speculation that Apple could shell out for a significant financial services provider such as Mastercard in an effort to build a major financial distribution business.

Is Apple impregnable? Only in the sense that it has amassed enough financial fat to carry it through years of sluggish performance, say industry experts.

In the words of Howard Anderson of MIT Sloan School of Management, “no tree grows to the sky”.

Huffington Post writer Bianca Bosker argues that Apple’s dominance is set to be tested by a new set of devices that don’t necessarily rely on screens, but rather “sync with the car, the home, or even the wearer’s body”.

Rivals such as Google are investing in portable computers that can be worn, not carried, though Apple has also applied for patents in this area, suggesting that Ive and his team are on the case.

The big area of opportunity is the emerging digital wallet.

Apple has already processed billions of dollars in purchases of digital product. The idea of serving as a payments system for physical goods could be next on the agenda.

Last year, it was rumoured that Ive was leaving the company and planning a return to Britain. Such a departure would represent a big blow, echoing the departure from Apple of Steve Jobs back in the 1990s under the regime of John Scully.

In this sense, Ive has emerged as a totemic figure. His departure would signal a break with the Jobs era.

The corporation needs to avoid the temptation of arrogance and complacency. Some argue that it has already assumed the position of corporate bully, once occupied by Microsoft.

It is accused of abuse of dominance and is currently embroiled in a raft of legal suits.

There are suggestions that Apple could begin to run out of partners, while consumers also baulk at the way Apple dictates terms over the use of its iPhone and iTunes offerings.

In the fast moving world of technology, pinnacles are occupied but briefly.

Apple’s period of ascendancy has been remarkable for its sheer duration and the sheer variety of ground-breaking products, but as the old saying goes : “The number one rule in technology is always to expect a new number one.”

Getting to know Jonathan Ive

Jonathan Ive: JoinedApple as designer in 1992.

* Born: 1967, Chingford — London NE.

* Education: Walton High School, Stafford.

Newcastle Polytechnic — School of Art & Design.

* Career: Co-founder, ‘Tangerine’, designconsultancy.

1992: Joined Apple as designer.

1997 to date: Head of Design, Apple.

2012: Knighted forservices to design.

* Married: Heather.

* Residence: SanFrancisco, US.


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