Steve Jobs, who just stepped down as CEO of Apple, doesn't frequent the World Economic Forum in Davos, Switzerland. Yet, at this ultimate gathering of the global economy, Apple products are omnipresent.
Every year, worthies from around the world gather to tut-tut and orate about the impending decline of America as a vital economic force. Each year, the hottest ticket is an event thrown by an American firm: Google. And what does everybody do at the Davos Google party? Last year, they were clutching iPads and talking on, filming, texting, and generally obsessing over their iPhones.
Consider this, Apple and Google today are among the ten largest U.S. companies by market capitalization, with a combined market cap value of about $520 billion. Now consider that in early 2002, in the wake of the last meltdown and widespread crisis in American confidence, their combined market capitalization was a few billion dollars. Apple traded for less than the cash available on its balance sheet. Google was a small, privately-held company.
But here's the real genius of Jobs (and Google). In the past decade, under Jobs's leadership, Apple morphed from a struggling niche personal computer maker catering to hipsters and the design industry into a global mass-affluent gadget brand. As it did so, Apple didn't just create wealth for investors who had the foresight to buy the stock when it was in the double digits. Rather, Jobs's genius, and his great contribution, was to create platforms, devices, and economic ecosystems on which other businesses and industries could create new economic arrangements.
In reinventing Apple, a struggling computer company, Jobs encouraged and abetted the reinvention of several industries that had also fallen on hard times. Apple has been criticized over the years for operating closed system, a walled garden. But the reality is that the company has been remarkably encouraging and accepting of innovation.
Apple didn't just invent cool new gadgets (the iPod, the iPad, the iPhone). It invented new ecosystems — iTunes, Apps -- that offered a lifeline to struggling established industries as well as immense opportunities for upstart entrepreneurs. ITunes created a venue and method for music and entertainment companies, who saw their sales and futures threatened by digitization and the easy piracy it enabled, to reach new audiences and develop an entirely new business model. The iPhone provided opportunities for upstart programmers and established brands to develop, distribute, and sell gazillions of new applications. The iPad offers book and magazine publishers — not to mention the huge television industry — the same type of opportunity that iTunes offered the music industry. From Hollywood move
Jobs's revival and leadership of Apple will go down as one of the great examples of individual corporate leadership of the 20th (and likely the 21st century). The heroic tale of a single creative mind rescuing a brand, creating thousands of jobs, and bestowing wealth on employees in the midst of a turbulent era is an irresistible one.
One by one, the great computing brands of the 1980s and 1990s fell by the wayside in the past decade. Gateway and Compaq are no longer forces. Hewlett-Packard just gave up on the PC. IBM sold its PC business to a Chinese firm. Dell has gone from beloved growth stock to struggling legacy player. And Microsoft, despite its heft and immense wealth, is having difficulty transitioning into the new age. Yet Apple has flourished in what has been a lost decade for large-cap technology stocks.
That's a pretty impressive legacy. And brand, style and marketing experts will have much to say about Jobs's unique combination of creative intuition and hard-nosed business skills.
But to my mind, Jobs's greatest and most useful example lies not in what Apple has done for shareholders, but in what it has done for other industries, companies, and individuals. In a period of great (and largely merited) doubt about America's economic capabilities, Apple provides an example of how a company can come back from significant blows, add significantly to people's quality of life, make a lot of people rich, and encourage others to innovate. Beyond a personal triumph, the story of Steve Jobs and Apple is a metaphor for the ability of a U.S. company (and perhaps the U.S. economy) to regenerate, innovate, and lead.
Daniel Gross is economics editor at Yahoo! Finance
Email him at firstname.lastname@example.org; follow him on Twitter @grossdm
- Steve Jobs