Plan like Steve Jobs

In 2010, Steve Job's email to Apple's 100 most senior employees was released as part of Apple's lawsuit against Samsung.

This email sets the agenda for Apple's annual "Top 100" meeting. I read the email when it was released to public in 2014. Today, I would like to comb through it and learn some lessons on Product, Strategy and Marketing from one of the greatest product minds of our time. 

As Product Managers, we are responsible for our product's strategy. While there are many books and articles on strategy and planning, this email is a real world example from a top product guy doing this exercise for one of the most successful tech company of our time. This practical example offers many insights to this process. This is my attempt to do so.

The day is October 24, 2010. Earlier in June, Apple released the iPhone 4. Here is a snapshot of the Apple product line in  2010, for context.

 

Wikipedia

In this post, I quote interesting parts of the email, and offer my commentary below. So, without further ado, lets go.

1. 2011 Strategy – SJ
– who are we?
– headcount, average age, …
– VP count, senior promotions in last year
– percent new membership at this meeting
– what do we do?
– pie chart of units/product line and revenues/product line
– same charts with tablets + phones merged together
– Post PC era- Apple is the first company to get here
– Post PC products now 66% of our revenues
– iPad outsold Mac within 6 months
– Post PC era = more mobile (smaller, thinner, lighter) + communications + apps + cloud services
– 2011: Holy War with Google
– all the ways we will compete with them
– primary reason for this Top 100 meeting
– you will hear about what we’re doing in each presentation
– 2011: Year of the Cloud
– we invented Digital Hub concept
– PC as hub for all your digital assets
– contacts, calendars, bookmarks, photos, music, videos
– digital hub (center of our universe) is moving from PC to cloud
– PC now just another client alongside iPhone, iPad, iPod touch, …
– Apple is in danger of hanging on to old paradigm too long (innovator’s dilemma)
– Google and Microsoft are further along on the technology, but haven’t quite figured it out yet
– tie all of our products together, so we further lock customers into our ecosystem
– 2015: new campus

[SID] - Steve starts his agenda with "who are we". That's how he plans to open his company's "Top 100" annual meeting. Think about that for a minute. This is not a new company or a startup. This is their north star, guiding "the how" and "the what" they work on. Steve highlights new "memberships" to this meeting, mentions VP count and senior promotions.

He then moves to "what do we do", with pie charts of units and revenue per product line. He describes the Post-PC era, what it means - smaller, thinner, lighter + communications + apps + cloud services, and how important it is to Apple.

Then comes the holy war with Google, his reason for this meeting. Steve puts in all the ways they will compete with Google, and expects each following presentation to tie into this central idea of the meeting.

He describes how PC as a digital hub is no longer relevant as the PC is now just another client to the iPhone and iPad. The digital hub describes all the things important to users (contacts, calendars, bookmarks, photos, video) and that its moving from the PC to the cloud. Apple's strategy to beat Google and Microsoft was to figure out this before they do, otherwise Apple would be in danger of the "innovators dilemma". 

The new campus for 2015 was the last item of the first section on Steve's agenda.

2. State of the Company
– Peter & Tim
– FY2010 recap
– FY2011 plan
– where is our business
– geo analysis (NA, Euro, Japan, Asia, possibly break out china) (present on map)
– key milestones, trends & future goals
– comparisons with Google, Samsung, HTC, Motorola & RIM3. iPhone
– Joz & Bob
– 2011 Strategy:
– “plus” iPhone 4 with better antenna, processor, camera & software to stay ahead of competitors until mid 2012
– have LTE version in mid-2012
– create low cost iPhone model based on iPod touch to replace 3GS
– Business & competitive update
– show Droid and RIM ads
– Verizon iPhone
– schedule, marketing, …
– iPhone 5 hardware
– H4 performance
– new antenna design, etc
– new camera
– schedule
– [CONFIDENTIAL]
– cost goal
– show model (and/or renderings)
– Jony

[SID] - Steve plans Peter and Tim to cover the State of the Company. This reviews the past year and plans for the next one. "Where is our business" is next, with geographical analysis. Then come the milestones, trends, goals and Competition. 

Joz and Bob are pencilled next, with the 2011 strategy for the iPhone. Discussion is planned around the next two versions of the iPhone, and a new SKU that is low cost. One important mention here is that Steve plans to show the Droid and RIM ads, not just their product or revenue/customer numbers. This is rare. How many times have you shown your competitors through the eyes of your customer? 

The section ends with discussions around the Verizon iPhone and the iPhone 5.

4. iPad – Bob, Jony, Dan Riccio, Michael Tchao ,Randy Ubillos, Xander Soren, Roger Rosner
– 2011 Strategy: ship iPad 2 with amazing hardware and software before our competitors even catch up with our current model
– Business & competitive update – Michael
– Apps, corporate adoption, …
– show Samsung, HP(?) anf iPad ads
– 2011 Product Roadmap
– Bob, Dan & Jony
– iPad 2
– new ID, H4, UMTS + Verizon in one model, cameras, …
– EVT units & cases
– HDMI dongle (use for projection of demos below?)
– iPad 3
– display, H4T
– DEMOS:- PhotoBooth (Michael?)
– iMovie (Randy)
– GarageBand (Xander)
– text book authoring system (Roger)
– working display for iPad 3 (during break)

[SID] - Strategy section for the iPad is crystal clear. Ship a new iPad that gives no chance to the competition to catch up. Also note the order of the iPad on the agenda and number of people presenting. Again the discussion is around the next two versions of the iPad, iPad 2 and iPad 3. Competition ads are to be shown. Apps for the iPad and Corporate Adoption are two unique items for the iPad, that were absent for the iPhone. 

5. iOS – Scott, Joz
– Strategy: catch up to Android where we are behind (notifications, tethering, speech, …) and leapfrog them (Siri, …)
– Timeline of iOS releases from first until Telluride, including Verizon
– Jasper tent poles
– Durango tent poles (without MobileMe)
– Telluride tent poles (with “catch up” and “leapfrog” notations on each one)
– DEMOS:
– Jasper: AirPlay to AppleTV – video from iPad, photos from iPhone, ??
– Durango: ?? (without MobileMe features)
– Telluride: Siri, ?

[SID] - iOS strategy defines places where Apple is behind, and how they plan to leapfrog the competition. Features are broken into "Catch Up" and "leapfrog". Three product releases are mentioned (Jasper, Durango, Telluride). Demos are expected.

6. MobileMe – Cue, SJ, Roger Rosner
– Strategy: catch up to Google cloud services and leapfrog them (Photo Stream, cloud storage)
– Android
– deeply integrates Google cloud services
– way ahead of Apple in cloud services for contacts, calendars, mail
– 2011
– Apple’s year of the cloud
– tie all of our products together
– make Apple ecosystem even more sticky
– Free MobileMe for iPhone 4, iPad and new iPod touch
– Jasper – Sign up with Apple ID, Find My iPhone
– Durango
– Find My Friends, Calendar, Contacts, Bookmarks, Photo Stream
– April
– iWork cloud storage
– Telluride
– cloud storage for third party apps
– iOS backup
– new iDisk for Mac
– Growth
– projected growth, cost/user
– plan to scale to 100 million users
– transition plan for paid members
– what about email?
– DEMOS:
– Find My Friends
– Calendar
– Photo Stream
– iWork cloud storage (Roger Rosner)

[SID] - MobileMe is a separate section for Steve. He plans to announce 2011 as the year of the cloud. Android's deep integration is highlighted. Apple plans to tie in all of its product together, making the ecosystem more sticky. Backups, Find My Friends, Calendar, Contacts, Bookmarks, Photo Stream, iWork Cloud Storage, iDisk for Mac are mentioned. Cost/user is mentioned, along with plans to scale the service to 100 million users. Email is a dilemma for Steve.  

7. Mac
– David Moody, Bob, Craig Federigi, Randy Ubilos & ?
– Hardware roadmap
– Lion plan
– Mac App Store
– Final Cut Pro DEMO (Randy & ?)

[SID] - The Mac appears. A new hire or a promotion was possibly on the cards, described as a "?" on the agenda. Hardware, Software, App Store, Apps, all of it has a place.

8. Apple TV 2- David Moody, Jeff Robbin
– Strategy: stay in the living room game and make a great “must have” accessory for iOS devices
– sales so far, projections for this holiday season
– add content:- NBC, CBS, Viacom, HBO, …
– TV subscription?
– where do we go from here?
– apps, browser, magic wand?

[SID] - Same story for Apple TV. Steve had an idea for a TV subscription service, in 2010. He was open on Apple TVs strategy going forward.

9. Stores Update – Eddy, Patrice
– Music
– Strategy: Leap even further ahead of Google in music
– Beatles
– iTunes in the cloud
– App Store
– Strategy: Leap even further ahead of Google in discovering great new iOS apps

[SID] - Now come the Stores. Music and the App Store. App Discovery is Apple's leapfrog item with respect to Google. iTunes in the cloud is on the list. Beatles get their obligatory mention.

10. iAds Update – Andy Miller
11. Retail Update – Ron Johnson

[SID] - The agenda closes with iAds and Retail updates.

This is how Steve's agenda looked like for Apple's strategy meeting. I found it very simple and interesting. Hopefully, you found it too.

Find me on twitter (@sidoza), if you want to discuss this post.  

The iPad spread

If you are in the market for an iPad, get your pen and paper ready and answer the following -

  • What's your budget?
  • Big or small?
  • Retina display? TouchID? Storage Capacity? Camera? What about a Barometer?
  • WiFi or WiFi + Cellular?
  • Colour?

or compare all the iPad models available for purchase.

Need more details?
Need more details?

Need more details? Of course you do.

There is a distinct possibility that you come out of this exercise with a model launched 3 years ago. Then, Apple's last two years in iPad improvements mean nothing to you.

The iPad has not been performing well since the last few quarters. Sales are flat for this magical device. In addition, the iPad's exceptional build quality and usage patterns impact existing customers who will buy a new one but already have an iPad.

This has forced Apple to become strange bed-fellows with IBM and focus on the enterprise. The other big idea is to broaden the product mix and address every price point in this segment.

But what about product simplicity? What about making the best product? This bewildering array of iPads confuse customers. The huge performance gap and complexity drive developers away.

The A5 chip has proved to be more resilient than the floppy disk and the optical drive.

Which colour you want?
Which colour you want?
The iPad Spread
The iPad Spread

Can this be simplified? Of course. Apple is the king of simple.But how? My 2 cents...

The iPad Mini has to be the first one to the slaughter house. This device is so old, it is nearer to the original iPad than to the latest one. And at this price point, consumers may incline more towards Android tablets. I have not heard of anybody buying an iPad Mini recently.

Moving on, the Mini 2 can be scrapped and the Mini 3 can be offered with and without the TouchID, only through certain distribution channels (Apple Stores, Apple.com). Rinse and repeat for the iPad Air/Air 2.

This leaves us with the iPad Air 2 and the iPad Mini 3.

Now we have a much simpler product lineup for the iPad. Displays are awesome, cameras are great and performance is fantastic all around. After deciding the size, the user gets to choose the color, TouchID support, storage capacity and cellular option.

This leaves the prospective iPad buyer with concrete yes/no, this/that decisions. Far less confusing and easier to make.

Now Apple, if you don't mind, please exchange my iPad 4 with an iPad Air 2 16 GB WiFi-Only Space Gray.

Beats with Apple

Apple's acquisition of Beats Music and Beats Electronics has perplexed the inter webs. Some say this is a clear indication that Apple's best days are over. Others say this is proof that Apple is getting smarter. Many have admitted that they have no idea why Apple would acquire Beats as there is nothing about Beats that Apple can't manage on its own. My perspective is a bit different. I looked at Apple's Press Release announcing the acquisition and their reason is clear.

"Apple® today announced it has agreed to acquire the critically acclaimed subscription streaming music service Beats Music, and Beats Electronics, which makes the popular Beats headphones, speakers and audio software…"

OK.  So you buy a company for $2.6 billion. What do you say when you announce the deal? Why you bought it, right?

Apple wants Beats for it's subscription service. Everything else is just icing. Beats Music is a very small part but gets the first mention in the press release. Ahead of the headphones, and ahead of Iovine.

Yes, there is $400 million more, but it vests over time, so relax.

No? Not convinced? Here is another example. This is the opening line in Satya Nadela's statement on the Microsoft - Nokia acquisition.

“Today we welcome the Nokia Devices and Services business to our family. The mobile capabilities and assets they bring will advance our transformation...”

It is clear why Apple bought Beats. They wanted a music subscription service. So they bought one. But can't Apple just build a service like Beats Music instead of spending the monies? Yeah, of course. Here are a few reasons they bought instead of built.

A stitch in time

Apple needs a music subscription service. The likes of Spotify and Pandora have proved there is a market. Apple's data shows that the "buy" music model is on a decline. Apple wants to retain its position as the top destination for Music lovers. And Apple has run the numbers. Such a service will work. Apple will give it prime real estate on the iOS home screen.

But Apple already has a brand in the music space, iTunes. And brand iTunes works not only for music, but also apps, movies, podcasts and much more.

If Apple has to enter the music as a subscription space, it needs a new brand. And Apple has to enter the music as a subscription space.

A good option

Beats Music was the only viable option for Apple. It is run by industry veterans and not software entrepreneurs. The founders understand the music business better than most and have connections inside the industry. The Beats Music service uses a personalization algorithm that is a mix of digital innovation and musical passion. 300 years of experience in the music industry comes with this acquisition. This rich team cannot be built just by snatching Jimmy Iovine and offering him a lucrative contract to bake this within iTunes. Plus, Beats has fantastic relationships with some of the big artists, a mandatory requirement after the Ping debacle.

A trojan horse

Whenever Apple is compared with Google, the following quote is never far behind in the discussion. That Google is getting better at design faster that Apple is getting better in services. Maps and mail are cited as proofs.

A new, independent brand will give Apple the flexibility to launch the service on Android and Windows. It will open the market and bring the Apple experience to many more users. Since the smartphone market is getting saturated quickly, growth can come only from customers jumping ship. What better way to start than with Music? Email and maps are covered. But Music is still wide open.

And the headphones? Yeah, they are important. They sell a lot and are profitable. Apple will shore up this part of Beats, and introduce another accessory for its devices. So there's that.

Most of the data and facts in this blog post come from Apple Press Release announcing the acquisition. Here it is.