The Rise, Fall and Rise Again of Apple

Having worked in the print and design industry for more than 20 years, Apple is a company that I have followed very closely.

The early development of computers saw Apple specialise in the desk top publishing market – aiming specifically at quick-print companies like Direct2Print.

The Mac competed head-on with PC’s driven by Microsoft software but manufactured by many different suppliers and ended up the loser. 

The Mac could never compete with the economies of scale the PC offered the wider market and had to include a substantial price premium to survive.

You had to buy separate software – and usually also at a substantially higher cost than software designed to operate on Windows.

It took the return of Steve Jobs as CEO and some investment from; amongst others, Microsoft owner Bill Gates, to help the business survive financially difficult times some twenty years ago.

However, Apple learnt from their early failures and in particular, the main reasons why Microsoft so dominated the computer market.

And how the tables have now turned.

Their recent successes are reflected in their financial results, which are absolutely staggering.

If Apple were a country it would have a greater GDP than many countries – including Hong Kong and Finland.  It could afford to buy 480 of the top 500 companies in the United States for cash.  In the last quarter, some 34,000 i-phones were sold around the world every second!

At the same time the market for desktop and laptop computers has collapsed and Microsoft is desperately trying to catch up in the now predominant mobile and tablet market.

The investment made by Apple into design and functionality is now really paying off.

 

How it all began

Microsoft decided (quite rightly) that the money to be made in the early days of desktop computing was in the software rather than the hardware.  

The Windows operating system was pre-loaded on every new PC – usually with their “free” Office Suite bundle of programmes.

Manufacturers producing the hardware, like IBM and HP, were successful because of the Microsoft software.

By putting all their resources into an integrated suite of programmes, Microsoft became the operating system for virtually all the computers produced around the world.  And they made it difficult for any competing software.

WordPerfect was a better word processor programme than Microsoft Word – but because it was pre-loaded it became dominant.  

The same happened to the more specialist spreadsheet software.  Lotus 123  was crushed by the emergence of Microsoft Excel.  

Access became the norm for databases and Publisher an ideal beginners programme for inexperienced graphic designers. Similarly, PowerPoint revolutionised printed presentations.

The secret of the Microsoft success was the simplicity of the programmes and their integration – everything worked well together and a new generation of computer users became competent and conversant with their programmes.

Why we went the PC Route?

We had the choice back in 1992 between Apple Mac’s or PC’s. 

When Desk top publishing replaced the traditional methods – such as  our IBM “Golfball” machine, bromides and the very expensive Letraset typesetting transfers used in pre-press print preparation – the instant print market really took off.

Probably more than 80% of companies in this sector preferred the Apple Mac solution. 

We were cheapskates and decided upon the PC route.

The main reason was the combined cost of the hardware and software.

Corel Draw was comparatively cheap (compared to the alternatives created for a Mac like Quark Express) and more importantly, came with some 2000 standard fonts and clip art.

With Quark, you had to purchase fonts separately – and the additional costs made a big difference to a small print and design business trying to service a large number of very small customers.

If a client is paying a few hundred pounds for a brochure the cost of purchasing a font is comparatively small, but for a £20 design for a business card it is a relatively high proportion of the cost.

We still use Corel Draw to this day – but we are indebted to Adobe for creating the PDF.

The nightmares we used to have trying to print from different programmes and different versions of the same software are now a thing of the past.  

We love Microsoft PowerPoint because it helped to create the market for online document printing.  The heavy ink saturation resulted in enormous printing costs and slow print speeds for people trying to print their own slides on a small home or office printer.  

As our digital colour printers became more sophisticated, they could print out a PowerPoint presentation in a few seconds – we would wire bind them together and hey presto – some pretty impressive hand-outs.

Sadly, Microsoft Publisher is an awful programme – despised by most print and copy shops and avoided at all costs by any commercial printer.

Still we never regretted the PC decision – although things may change in the future.

We were even given a second-hand Mac as part of a bad debt settlement but still used the PC’s and used the Mac just to open some customer files!

But things change.

My first Apple

Two years ago I bought an Apple i-pad and a slightly smaller Samsung Galaxy Tab at the same time. 

The i-pad was easier to use, portable and had a superb screen resolution.  The tab was very much second best – both in design and aesthetics.

Today, experts claim a major part of the success of Apple is that their products all work well with each other.  

So when the time came to replace my home computer – we went with Apple again and purchased the more expensive i-Mac.  

Over the years the PC’s I had at home slowed dramatically, picked up viruses, crashed on numerous occasions and struggled with any memory-intensive programmes.

The i-Mac looked good and came with the software pre-loaded included in the bundle cost.  

For a PC the software would now have been a lot extra.  The Office bundle could be downloaded but almost for the same cost as the computer!

Having never used Apple’s equivalent to Microsoft -  I can’t comment on the various merits of their word processors, spreadsheets etc. and still prefer to use my work PC’s for letters, reports or anything I need to email.  

I struggle with i-tunes and some of the other programmes but for photographs and video creation in my opinion it is far superior to the PC.

I-photo makes the storage and editing of photographs so easy – compared to every other PC programme I have used.

And i-movie is a revelation.  One session from the Apple specialist at PC World and suddenly I realised how easy Apple had made video creation.

I still have no idea how to use all the keyboard or even the mouse – but their design and aesthetics stand out.

My first video for work is uploaded and embedded into our new website – www.direct2print.co and the video has been uploaded to YouTube.

Have a look at the video -(https://www.youtube.com/watch?v=1bo_hyWtEgg)  it took just a few hours to complete.

The question now is where does Apple go from here?  And what can their competitors do to keep up? 

They have such a large cash mountain you can afford to gamble and even make a few mistakes along the way.

And they are even planning to generate more cash by creating bonds because their cost of lending is so low and tax efficient.

The only reason for hope is that everybody thought Microsoft would go on to dominate the world. 

Technology moves quickly and even the biggest companies need to adapt.

The future may not be Apple after all!

Life is tough for some?

January usually brings with it a number of retail companies in trouble calling in the receivers or administrators, particularly in the retail industry.

Typically, retail firms have the quarterly rent bills to pay and have been totally dependent on the success or failure of the pre-Christmas sales period.  

And these days we all like a bargain.  More and more of us wait for the January Sales and more and more of us search the Internet for the best deals.  Price comparison is now easy and less time-consuming.

The Internet has diminished the importance of traditional December sales periods with the introduction of “Black Friday” and “Manic Monday” after the Thanksgiving US holiday – extending the pre-Christmas selling period.  

However, it is not only retailers who are vulnerable.  Many printing businesses are dependent on retail activity and there is another industry that has a direct strategic impact on the online digital and document print industry – the parcel business.

With such a growth in volumes you would think that most parcels businesses would be booming.  But margins are pretty thin.  We have just received a letter informing us of an increase in our contract rates from March this year.

The universal rate for parcels from Royal Mail means it is still economical for us to use Special Delivery for the very small print orders.  However, their costs also seem to be becoming uncompetitive.

This week I went to the local Post Office with four small packages.  I sent two small jiffy bag orders that were cheaper than my courier costs.  The two others I held onto – because the cost had now increased to £11 each.  

Sadly, paper is a heavy commodity and if the weight is in excess of 1kilo then there is usually quite a price premium.

So I went back and sent them with our other courier parcels.  

Within a couple of hours our reliable courier driver - “Parcel Pete” according to the side of his UK Mail van (although his name is Martin!) – turned up as usual and took them away for me at a fraction of the Royal Mail cost.

Later that day – after I had been home, changed, had an evening meal and was walking to the pub; I noticed “Parcel Pete” trying a very dangerous three point turn in the main road outside my house.  

A couple of cars that nearly collided with him made their displeasure known with their horns – even though it was later than the 7pm deadline recommended in the Highway Code.

I couldn’t help thinking what a long day it must have been for “Parcel Pete” – there are no tachographs or driving hour restrictions for vans below 7.5 tons.  He has probably been working for more than twelve hours in pretty miserable weather conditions.  And I can’t remember more than a week in the last few years when he has had a holiday.

The same day we had a new client who pulled out of an order at the Shopping Cart stage of our order process system because a delivery charge was applied on a “small order”.  

He emailed me the screen capture with the £15 delivery charge circled in red and said this was “Bad Business” and claimed this cost was exorbitant and he would not be placing any more orders with Direct2Print.

The order was for a 34 page wire-bound booklet printed full colour on 150gsm gloss paper with colour covers on 350gsm card – and the print cost (with his 50% first time order discount) was £4.45 including VAT.  However, a £15 delivery charge was applied because the order was below our minimum cost for free delivery.

Incidentally his location was within Zone C and would have cost nearly £40 for next day courier delivery.  

I have been caught out with this before sending some printed prayer books to a monastery in the Highlands & Islands of Scotland.

Even with Royal Mail it would have been at least £11 cost for carriage – let alone the cost of the packaging!

So the whole job next working day would have cost this potential client £19.45 including VAT (£16.20 nett in my account!).

Rather than email back - I picked up the phone to explain that the courier cost alone would be more than the value of the order and regretfully the only option was to rely on second class Royal Mail post to deliver sometime in the days ahead.  

What options were available that would have been cheaper – surely not the cost of driving to a copy shop in the nearest city!  I would like to think by speaking directly to him his anger was placated but I’m not sure.

Then I thought of “Parcel Pete” and his attempts to forge an income with long hours. 

The TV News that evening showed images of gale-force winds hitting Scotland and all trains being cancelled north of Perth and I felt quite relieved we didn’t get this job.

At the same time I also remembered that City Link had been pushed into receivership and made staff redundant at the worst possible time between Christmas and the New Year. 

Some of these people would put in long hours and often in a cold and uncomfortable environment.

City Link offered the lowest cost parcel service that I could ever find but somehow they never offered reliability – which is far more important than cost.

But what can you expect – they were once managed by the guy who caused the collapse of Prontaprint and he had the same price-driven mentality to success.

About ten years ago and the whole lot was sold “as a going concern” for £1 to a venture capitalist some months before.  

Yes, they invested some money but they chased volume at unrealistic rates.

Commercial pressures are forcing a reduction in costs in every part of every business. 

But there comes a time when we have to be realistic about this vital part of any business – the actual price we charge.  

When we started our online document printing service in 2003 delivery was always free.

Now we have to pass on costs rather than take on uneconomical orders.

Eventually we may even see some of our other costs falling.  Oil drifts to a price when petrol actually seems like good value again.  The supermarkets are desperately fighting for market share are putting extra pressure on their suppliers.  

There aren’t many costs that are going up and being accepted by customers.

However, we all need to survive and grow in order that we can invest in our service and innovate in a very competitive market.

And the conclusion…

As a result, we are not immune to the risks of business, but we have spread our risks and have built up sufficient funds to weather most storms that will come our way in 2015.

Hopefully!