Apple's 'mission statement' is a lie

[TC03]

It's been known to many as a fact: Apple does not care about making money, Apple only cares about making 'the best products'. I believe this is a lie. Apple's real goal is to keep profit margins as high as possible. This is not a real problem as long as their products are extremely competitive (or: when the competitors are weak). However, this has changed, competition is not so weak anymore.

The iPhone 5 is a great phone, I have no doubts. The next phone however is already known to be a simple spec bump, the iPhone 5S. I honestly don't think think that in a fast-paced world as the smartphone world, the iPhone 5 can be 'the best smartphone' for two years long. In other words, when the 5S will be released, it will be a pretty good phone, possibly the best to date, but it won't be 'the best smartphone possible'.

By the the time iPhone 5S will be released, there will be better screens, better cameras, better SOCs. The only reason why Apple will continue to keep the iPhone 5 design, is because it takes about 1 year to get yields to the maximum level. In other words, profit margins will be maximized after about one year, so Apple keeps the iPhone 5 in favor of a new design because it is more profitable, not because it's better.

Apple cares more about their profit margin than they do about 'making the best products' and this compromizes Apple's competitivity. There is more than one fact which supports this statement. A good example is the storage capacity, they still sell 16 GB iPads and iPhones, even though some games are between 1 and 2 GB. 16 GB really does not ensure the best experience on an iOS device possible.

My conclusion: in the end, Apple is not unlike any other company, they want to make as much money as possible to keep shareholders happy. Don't be fooled by Tim Cook saying all they care about is making the best products, because that's not true.

[ZombiePete]

You cracked the code. The Illuminati will be at your location shortly to take you away.

[TC03]

Originally Posted by ZombiePete

You cracked the code. The Illuminati will be at your location shortly to take you away.

Thanks for the heads up.

[Shrink]

Amazing...a businesses "Mission Statement" does spell out that the purpose of all business in a capitalist economic system is, first and foremost, to make money!

Perhaps it should read..."Our mission, required by law, is to make as much money for our stockholders as we possibly can. And one way to do that is to try to please our customers so they will buy more of our stuff so we can make more money".

Pretty much true, but unlikely ever to be written.

[fungus]

Originally Posted by TC03

It's been known to many as a fact: Apple does not care about making money, Apple only cares about making 'the best products'. I believe this is a lie...

...competitivity...

I think "competitivity" is my new favorite word

As far as it being a "lie", I seriously doubt Tim Cook or any executive speaking on behalf of Apple ever said that they don't care about being profitable. At best, one could consider it a lie of omission. As far as the official corporate mission statement is concerned, the closest it comes to stating they're interested in "making the best products" is the specific reference to Macs being "the best [PCs] in the world". From their site http://investor.apple.com/faq.cfm?FaqSetID=6:

"Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad."

They don't mention profitability because it's a given.

[TC03]

It's not a given, Apple actively denies that profitability is a goal.

Jony Ive: "“Our goal isn’t to make money. Our goal absolutely at Apple is not to make money. This may sound a little flippant, but it’s the truth,” said the British designer."

Tim Cook: "The most important thing to Apple is to make the best products in the world. We aren't interested in revenue for revenue's sake."

Now I know there's a difference between revenue and profit, but the thing is, Apple's most and foremost goal is to keep profit margins as high as possible, they can only do so by making 'premium products' of high quality. However, if a choice has to be made, they chose profit margins over better products.

[maflynn]

^^ That's just marketing speak.

Apple is in the business to make money, how else can you explain the premium they charge for their products. If they weren't looking to make money their business model would be completely different and they're be giving away those amazing products

[eric/]

Originally Posted by maflynn

^^ That's just marketing speak.

Apple is in the business to make money, how else can you explain the premium they charge for their products. If they weren't looking to make money their business model would be completely different and they're be giving away those amazing products

i agree and disagree. They definitely want to make money, but I also believe they want to do that by making the best possible products, and they aren't just making stuff to just make money. There are a ton of things they could to "just make some money" that they don't do.

[Rogifan]

Originally Posted by maflynn

^^ That's just marketing speak.

Apple is in the business to make money, how else can you explain the premium they charge for their products. If they weren't looking to make money their business model would be completely different and they're be giving away those amazing products

And no other company wants to make money? Does every company that charges a premium for their product only do so because they want to make more money than the next guy?

If you're a for profit corporation it's implied that you're in business to turn a profit. That has nothing to do with a company's mission statement. If Apple made crap products with crap services people wouldn't buy them and Apple wouldn't make money. Nobody has a gun put to their head forcing them to buy Apple products.

[Rogifan]

Originally Posted by TC03

It's not a given, Apple actively denies that profitability is a goal.

Jony Ive: "“Our goal isn’t to make money. Our goal absolutely at Apple is not to make money. This may sound a little flippant, but it’s the truth,” said the British designer."

Tim Cook: "The most important thing to Apple is to make the best products in the world. We aren't interested in revenue for revenue's sake."

Now I know there's a difference between revenue and profit, but the thing is, Apple's most and foremost goal is to keep profit margins as high as possible, they can only do so by making 'premium products' of high quality. However, if a choice has to be made, they chose profit margins over better products.

To give the full context, here's the full quote from Ive.


"We are really pleased with our revenues but our goal isn't to make money. It sounds a little flippant, but it's the truth. Our goal and what makes us excited is to make great products. If we are successful people will like them and if we are operationally competent, we will make money."

Of course one can argue that Apple's margins and huge profits mean they over charge for products. But if Apple goal is profit over everything else couldn't we argue that if they had slightly lower profit margins they might make even more profit via increased sales?

[ucfgrad93]

Originally Posted by eric/

i agree and disagree. They definitely want to make money, but I also believe they want to do that by making the best possible products, and they aren't just making stuff to just make money. There are a ton of things they could to "just make some money" that they don't do.

Agreed. All businesses want to make money, otherwise why would they be in business?

[sim667]

Big company in says quality is its priority, but really its interested in money SHOCKER!

[roadbloc]

All any company cares about is making money. No matter what they say.

[Cody21]

Originally Posted by TC03

It's been known to many as a fact: Apple does not care about making money, Apple only cares about making 'the best products'. I believe this is a lie. Apple's real goal is to keep profit margins as high as possible. This is not a real problem as long as their products are extremely competitive (or: when the competitors are weak). However, this has changed, competition is not so weak anymore.

The iPhone 5 is a great phone, I have no doubts. The next phone however is already known to be a simple spec bump, the iPhone 5S. I honestly don't think think that in a fast-paced world as the smartphone world, the iPhone 5 can be 'the best smartphone' for two years long. In other words, when the 5S will be released, it will be a pretty good phone, possibly the best to date, but it won't be 'the best smartphone possible'.

By the the time iPhone 5S will be released, there will be better screens, better cameras, better SOCs. The only reason why Apple will continue to keep the iPhone 5 design, is because it takes about 1 year to get yields to the maximum level. In other words, profit margins will be maximized after about one year, so Apple keeps the iPhone 5 in favor of a new design because it is more profitable, not because it's better.

Apple cares more about their profit margin than they do about 'making the best products' and this compromizes Apple's competitivity. There is more than one fact which supports this statement. A good example is the storage capacity, they still sell 16 GB iPads and iPhones, even though some games are between 1 and 2 GB. 16 GB really does not ensure the best experience on an iOS device possible.

My conclusion: in the end, Apple is not unlike any other company, they want to make as much money as possible to keep shareholders happy. Don't be fooled by Tim Cook saying all they care about is making the best products, because that's not true.

What is Samsungs or Googles mission statement? I think it's only fair we compare them too.

[TC03]

Originally Posted by roadbloc

All any company cares about is making money. No matter what they say.

You can make money in all kinds of ways, Apple wants to do so by maintaining high profit margins.

In every product they design, they will always try to solve the puzzle of trying to find the bare minimum of compnent costs which will allow them to ask a premium price.

[Rogifan]

Originally Posted by TC03

You can make money in all kinds of ways, Apple wants to do so by maintaining high profit margins.

In every product they design, they will always try to solve the puzzle of trying to find the bare minimum of compnent costs which will allow them to ask a premium price.

So it's ok to make lots of money so long as its not through high profit margins? I doubt Tim Cook or Jony Ive get up in the morning wondering how they can screw over the customer with high prices.

[TC03]

Originally Posted by Rogifan

So it's ok to make lots of money so long as its not through high profit margins? I doubt Tim Cook or Jony Ive get up in the morning wondering how they can screw over the customer with high prices.

I never gave my judgement. It's OK to have high profit margins.

What I'm trying to say is that 'high profit margins' is prioritized over 'making the best products' and not the other way around.

[vvswarup]

There are two ways of building and maintaining high profit margins-cutting costs and growing revenues.

Apple does a little bit of both. They focus on cutting costs a lot. They find cheaper ways of making their products in order to make more profit, part of why the product designs haven't changed that often. But in theory, you could cut costs to zero but that's as low as you can get. You can't grow profits at the same clip if all you do is cut costs because at some point, competitors will squeeze the bottom line.

Apple knows this. That's why they have a record of coming out with new products and being able to move on. For example, they came out with the iMac in the early 2000s. Then came the iPod. Then came the iPhone, which arguable cannibalized the iPod. Then came the iPad. Then came the iPad mini, which is on track to cannibalize the iPad. Apple has demonstrated time and time again that they're not afraid of cannibalizing their products. They're not married to a product line. They're ready to move on when it's time.

Apple wants to make money as much as any other company out there. But there is some credence to their statement of being interested in making good products.

[Rogifan]

Originally Posted by TC03

I never gave my judgement. It's OK to have high profit margins.

What I'm trying to say is that 'high profit margins' is prioritized over 'making the best products' and not the other way around.

And your evidence of that is?

[roadbloc]

Originally Posted by TC03

What I'm trying to say is that 'high profit margins' is prioritized over 'making the best products' and not the other way around.

How do you know this? I think the majority of tech companies put effort in to try and make the best products for their flagship models, but unlike Apple who have a rather simple lineup of products that focus on the more 'premium' market, others have a larger range that include cheaper models that simply aren't the best they could do due to them being sold to a budget market.

At Apple, I'm sure there will be a balance between cost and quality. They will want to impress customers since they are often the first to tout their successes, but they will also be thinking of their dollar bill collection too.

Staying clear of the budget market has been a success for Apple, giving people the perception that they only make quality products. But no matter what they say, it isn't just the product they're interested in. It's your wallet as well.