Yukari Iwatani Kane doesn’t hate Apple – and doesn’t think her book says Apple is doomed.
“I don’t see this as an anti-Apple book. I wrote it on a MacBook Air,” Kane said about her book during a recent podcast. “I’m a user.”
The book, Haunted Empire: Apple after Steve Jobs, looks at the iconic tech company in the years following Steve Jobs’ death in 2011. Exploring everything from Apple’s relationship with manufacturer Foxxcon to the rollout of Apple Maps, Haunted Empire’s been a subject of controversy for weeks now.
Walter Issacson, author of Steve Job’s biography, called Haunted Empire “unparalleled reporting”. Tim Cook, Apple’s CEO, called it “Nonsense.” Most opinions on the book seem to be just as polarized – reviews on Amazon are split between 1 and 5 star ratings.
We sat down with Yukari for episode 107 of Technophilia Podcast; the conversation lasted about 40 minutes.
Is Apple Doomed?
Justin Pot (JHP): Much of the kneejerk reaction to your book seems to state that you ignore Apple’s successes and overstate its failures, and use this to conclude that Apple is doomed. I’m not sure that’s what the book actually says. Do you think Apple is doomed?
Yukari Iwatani Kane (YIK): No, not at all. I see it as an exploration. When I first started on this project, I thought that if anyone could keep their momentum going Apple could. It takes a while for me to get to my conclusion, because I did need to be convinced. And I still don’t know that it’s going to be doomed.
No company is going to lose somebody who was as big a presence as Steve Jobs without going through some challenges. It’s a transition, and whether they fail or whether they succeed it’s an interesting story to me – and one that was worth tracking.
Initially, there was a strong reaction [to the book]. I don’t know if it was the title, but I don’t see this as an anti-Apple book. I wrote it on a MacBook Air. I’m a user.
JHP: Revenues are high. Do you understate successes?
YIK: I don’t think I do. I do track Apple’s earning throughout the book, but the point is that Apple itself puts itself on a higher standard of success than any other company. So by Apple standards, which is making insanely great products that change the world, profits have always been spun as secondary.
From a profits and revenues standpoint, I don’t think they’re in any trouble at all. But where they are facing a challenge is by their own standard of success.
Steve Jobs had this power of persuasion. He managed to convince people that something was happening, that it was going to be exciting, and that incremental upgrades to the existing products are super exciting.
JHP: Do you think turning the global media into Apple’s personal PR department be part of Jobs’ legacy?
YIK: I do. Apple is still a very secretive company, but it’s relaxed over the last few years. You see not just Tim Cook but Jonathan Ive and Phil Schiller giving interviews a lot more than before. It used to be that… it was only Steve Jobs.
My experience was that when you were breaking a story and called Apple, they would only give me a comment from something that Steve jobs had said publicly before – whether it answered my question or not. They had control of the messaging, and that’s gone away completely. That’s one indication of change. Now that they’re out there more it does open Apple up to a lot more questions
Foxxcon And Apple’s Supply Chain
Foxconn facility image courtesy Steve Jurvetson
YIK: One point I did want to make with the book is that I do think the supply chain has become a huge risk.
Take, for example, Foxconn. It’s easy when you’re sitting in the US to look at them just as a vendor. But they’re a major corporation, and their CEO Terry Guo is almost just as revered as Steve Jobs [in Asia]. He’s charismatic, and considers himself The General, and is really smart. He is the kind of guy that is thinking three moves ahead all the time.
So when Apple’s growth inevitably slows and even declines, Terry Guo needs to think about where he gets his future growth from.
JHP: Apple gets most of the margins from these devices. Will vendors keep tolerating that?
YIK: Apple still is a big part of the business, so nobody is going to not work for them. But all of these CEOs are getting older and thinking about their legacy. So I do think that they will diverge.
Upcoming innovations: What’s next?
YIK: I hear the same things that everybody hears: the iWatch, television. I’m sure that they’re working on those things, I get enough indication from the supply chain that they are. But the math doesn’t ad up to me. At this point Apple is so huge that…it’s going to have to be the biggest success.
JHP: Does everything Apple makes need to be the next big thing?
YIK: At this point, it’s a $150 billion company in terms of annual revenue. It’s not this niche company that makes beautiful things for a slice of people. They’ve got pressures from stock holders, from the board.
Tim Cook is more challenged than Steve, because there’s more scrutiny now. A hired manager is not the same thing as the guy who founds the company.
If you look at the board, it was certainly involved, but they worked for Steve [Jobs]. I don’t think there’s any question that [Apple CEO] Tim [Cook] works for the board.
"The board was certainly involved, but they worked for Steve. I don't think there's any question that Tim works for the board." @yukarikane
— Justin Pot (@jhpot) April 3, 2014
Patent Problems: Apple Versus Samsung
JHP: You seem to see these lawsuits as a waste of time.
YIK: I think it’s worth pursuing for the patent world. There’s something going on, and it’s important what comes out of it.
But if you look at Apple as a business, or if you think about it just as a business decision, I don’t know what these trials get you. So Apple won last year, right? Samsung was found to have copied Apple’s products. I’m not sure that consumers care. Android is out there, and the Galaxy is out there. The rulings are banning things that are largely off the market already.
Largely, if you look at it, I don’t see what it gains Apple. It seems like a distraction. From a consumer’s point of view, is anyone going to say “Well, I’m going to get the iPhone because it’s the real thing”?
I went to Seoul, and what I heard there is that Samsung is pretty pleased about the whole thing. It legitimized them as a worthy rival. They’re actually pretty thrilled about how Apple sees them as competition.
JHP: Will the patent wars continue?
YIK: I don’t think it should. I would have thought that they’d eventually reach a settlement, and I’m a little surprised that they haven’t yet.
Part of the problem is that neither side has much to lose at this point, now that they’ve started this. The legal system takes so long…with the appeals and everything. One side has to be damaged enough to feel like they need to reach a settlement. I don’t think we’ve come to that point yet.
There’s this trial that’s now ongoing, and neither side has been dealt a real blow. Money is not an issue for either side. It’s pocket change.
Apple Without Steve Jobs
Dave LeClair: Will the media ever forget about Steve Jobs and allow Apple to just be a company again?
YIK: It’s really difficult. I used to cover Sony, and it’s been more than 20 years since their founder Akio Morita left, and they’re still talking about what Morita would have done.
The problem with that, and the challenge for Apple as well, is that you used to have someone who was the final guidance guy to make decisions. His decision was really the only one that mattered.
The problem is that I think that Apple has many visionaries. They all think that Apple should go in a different direction. And I think Jonathan Ive could be a visionary, but he’s not the CEO. He doesn’t run the business. And I think anyone who is creative still needs a good editor.
Jonathan Ive worked because Steve Jobs was there. Ive needs some kind of intellectual partner to toss ideas to, and it wouldn’t be anybody on his team because they all work for him.
Where “Haunted Empire” came from
JHP: Was the title the publisher’s idea?
YIK: I came up with it, the publisher didn’t come up with it. There’s this great book about what happened after Alexander the Great died (Ghost on the Throne by Deckle Edge). It’s one of the ways I thought about telling Apple’s story.
So Empire was there, as a theme, from the beginning. I also wanted to get across the idea that not only is Apple haunted by Steve Jobs, but also the idea that they’re haunted by past success. My view, ultimately, is how transition makes the challenges of running big companies magnified.
So I saw this book not just as a leadership transition book, but also about this transition that Apple is making: from the small, niche underdog that Steve Jobs liked to consider Apple to this mega-corporation that has this global reach. It’s one of the most global companies in the world.
I think consumers in the US see Apple as an iconic American company, but I see it as a really truly global company that is dealing with a lot of challenges that other companies face or will face. I wanted to tell that story in a holistic way, which is why I travelled around the world and spent a lot of time on what’s going on in China especially.
Because the world’s a lot smaller, and there’s a lot that people can learn from Apple’s experience.
Dave LeClair: Does the book accomplish what it set out to accomplish?
YIK: I do feel pretty good about it. Obviously there are sources that I would have liked to have spoken to, and I would have liked more time to massage the storytelling of it. And, if I could, which would be impossible, I would have had the benefit of hindsight. I was writing this book as events were unfolding, so the last five chapters hadn’t even happened when I started on the project. So I was looking back, and I had this chunk of period and things are happening, so I might have made a few adjustments here and there. But all and all I’m really comfortable, I’m really happy with the book. And I actually don’t have a problem with the fact that it unfolds in an exploratory way.
I wanted to look at Apple in a holistic way. I could have concentrated on Cupertino, and just done the Cupertino story. Which some people would have liked.
I think what I brought to the table is something I could do differently than anyone else, and better than anyone else, which is to look at Apple in a global way.
Will Apple Get Into VR?
James Bruce:What are you thoughts on Facebook buying Oculus? Will Apple get into virtual reality?
YIK:I think one of the things Apple has always done brilliantly was to not leap on a product development because it was cool. There are a ton of things out there that are cool, but they were always great at figuring out also what people wanted or needed. There’s that intersection.
I’ve tried Google Glass, and I don’t see a future yet where that’s an obvious thing for mass consumers. I have no doubt that Apple is tracking it.
Apple waits until something is perfect. They’ll let others spend that money, and then they usually come in at that right moment, when it’s about to open up to a bigger audience and just capture it with something brilliant.
Apple weren’t the first with a tablet, but the iPad just had the right mix of stuff and was presented in the right way. And I do think that, without Steve Jobs there, Apple does have a challenge in presenting that. They’re going to have a challenge because they’re not going to have Steve Jobs the marketer to say “This is brilliant, you really need to buy it” and have everybody nod their heads. But they also don’t have Steve Jobs the editor, saying they need to work on it some more, the timing isn’t right, that’s crap, we need to go back to it.
Little things, right? Steve Jobs management style, people told me, was to purposely butt heads to make sure that he got the best ideas. Tim Cook seems to be more of guy who emphasizes team work, and being a team player. That possibly means that people are less willing to offer contrary and varying opinions.
It’s very possible that Apple will pull through it, and I’ve no doubt that that story will be fascinating, because if they can do it it’s no small thing. This book isn’t an ending.
Tim Cook’s reaction to the book
JHP: Were you surprised Cook took the time to call your book “nonsense”?
I was a little surprised, because their modus operandi has typically been to not acknowledge books like this. But on the other hand, when I was breaking stories on Apple like the iPad or a lower cost iPhone, Steve Jobs would call or email me and say that it’s not true… even if the story did turn out true.
The famous one was when I broke the story about the iPad, Steve Jobs told me ‘much of your information was incorrect.’ And we stuck that in paragraph 2 of the story, and of course the story was right. I don’t know what he was referring to, but the gist of the story was right.
When I broke the story of the low cost iPhone, I think this was spring 2011, Apple also denied this. It didn’t come out for a while, but ultimately we know what happened: the iPhone 5C came out. For a long time people thought I got that wrong. It doesn’t bother me, I think it’s interesting.
I’m also taking a really long view of Apple, so ultimately the book is not the last look. It’s a continuation. The story right now is fascinating, because they’re going through these huge challenges.