Sunday, February 3, 2013

Paul Kedrosky On What Has Gone Wrong At Apple - Business Insider

Kedrosky on AppleGiven Apple's commitment to secrecy, it's hard to get a good sense of what is going on inside the company.

But in the opinion of one respected industry observer, Paul Kedrosky, some of Apple's recent missteps can tell us a lot about that.

In an interview with Bloomberg West yesterday, Kedrosky said Apple's inability to meet demand for its new iMacs--a problem that contributed to disappointing Mac sales in Q4--as well as its cancellation of many iPhone component orders, mean that one of Apple's key competitive advantages may be disappearing.

Kedrosky believes that Apple's iMac problems reveal an important change in the power balance within the company.

Specifically, Kedrosky thinks that, in the power-vacuum following Steve Jobs' death, the design team, led by Jony Ive, have been given too much latitude--such that Apple is now designing products that it is not capable of manufacturing as smoothly and quickly as it needs to to meet demand.

When Jobs was alive, Kedrosky implies, this "tension" between the design teams and manufacturing teams was in almost perfect balance. Jobs's brilliance as both a product designer and business executive kept the company from "over-designing" its products, or, just as bad, focusing so much on the numbers that its design standards sagged. And this balance, Kedrosky suggests, allowed Apple to continually out-design and out-produce the competition.

But now that Jobs is gone, Kedrosky suggests, Jony Ive's design team has been given too much power--without a critical check and balance on whether Ive's products can actually be produced in the quantity and timeframe that Apple needs to produce them to meet demand.

If Kedrosky is right, the irony is that the expertise of the man Jobs selected to succeed him--Tim Cook--is actually on the manufacturing side, not the design side. So, for Kedrosky to be right, Apple's CEO would have to be deferring too much to Ive, perhaps over his own best judgement.

In any case, something has clearly gone wrong at Apple. And this is an interesting theory about what that is.

Here's Kedrosky with Emily Chang of Bloomberg West:

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Source: http://www.businessinsider.com/paul-kedrosky-on-what-has-gone-wrong-at-apple-2013-2

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