Apple’s “Capital Return Program”: Rewarding the Wrong People

By William Lazonick, Professor of Economics, University of Massachusetts Lowell. Originally published at the Institute for New Economic Thinking website

The enormous revenues and profits flowing from Apple’s innovative products, the iPhone in particular, get primary credit for enabling the company to be the first in history to reach a trillion-dollar market capitalization. That financial achievement, attained on August 2, 2018, represented a tenfold increase in stock market value since mid-2007 and a doubling of the level reached in March 2012. But also driving Apple’s booming stock price has been the company’s record-breaking largess in distributing corporate cash to its shareholders.

Apple has just released its financial results for the fourth quarter of 2018, revealing the full extent of its record-setting stock buybacks in fiscal year 2018. From the last quarter of calendar year 2012 through September 29, 2018, under its inaptly-named “Capital Return Program,” Apple spent $239.0 billion buying back its own stock. In addition, the company paid out $74.4 billion to shareholders as dividends. Prior to 2018, Apple had set the record for buybacks by a company in a fiscal year, with $45 billion in 2014 (year ending September 27). During fiscal year 2018, Apple far surpassed that figure with $73 billion lavished on buybacks, representing 123% of its net income.

Apple’s “Capital Return Program” is an ideologically laden name for these distributions of corporate cash to shareholders that has nothing to do with returning capital. First, you can’t “return” something to a party that never gave you anything. The only time in its history that Apple actually raised funds from public shareholders was its initial public offering in 1980, which yielded $97 million for the company. Second, in distributing cash to shareholders, Apple is not giving them “capital.” It’s just transferring cash that may be used for a multitude of purposes, ranging from household consumption to building the war chests of hedge-fund activists, augmenting their power to engage in predatory value extraction.

Apple has become the most glaring example of how, captured by the ideology that a company should be run to “maximize shareholder value,” U.S. business corporations have been handing over the gains of innovative enterprise to public shareholders far in excess of their contributions to the processes of value creation. Losing out are households, whose tax dollars fund the government investments in infrastructure and knowledge that a company like Apple requires, and Apple’s employees, whose skills and efforts have generated the innovative products that have made the firm the richest in the world.

Contrary to shareholder ideology, the stock market is not an institution whose function is raising cash for corporations to invest in productive capabilities. Rather, the financial role of the stock market has been to enable private equity investors to “exit,” as venture capitalists put it, investments they have made in a firm’s processes and products. The listing of a firm on a liquid stock market enables households, governments, and businesses to include its publicly listed shares in their portfolios of financial investments without actually investing in that firm’s productive capabilities. Compared with those financiers, taxpayers, and employees whose funds and efforts are committed to value-creating investments in productive capabilities, stock market traders always have the option of mitigating their risk at any time by selling shares to lock in financial gains or stem financial losses.

Take, for example, the $3.6 billion in Apple shares that “shareholder-activist” Carl Icahn added to his financial portfolio between July 2013 and January 2014. In research supported by the Institute for New Economic Thinking, my colleagues and I have analyzed how Icahn used his accumulated wealth, public visibility, tweeted-out hype, and personal influence on Apple’s management to help drive up the price of the company’s stock—while, apparently, exploiting privileged access to nonpublic information in choosing when to sell his Apple shares. In 2014 and 2015, as Icahn continued to hold those shares, the company did $80.3 billion in buybacks, helping to lift the stock price to new heights. Aided by this record-setting exercise in value extraction, Icahn was able to add $2 billion to his wealth by March 31, 2016, by which time he had sold all his Apple shares. In realizing this bonanza, Icahn made no contribution whatsoever to Apple’s value-creating capabilities.

While Icahn was selling Apple stock in the first quarter of 2016, “patient-capitalist” Warren Buffett was buying it. Over the previous decades, the “Oracle of Omaha” had become one of the world’s wealthiest people as chairman, CEO, and major shareholder of Berkshire Hathaway, a financial and industrial conglomerate that he has led since 1964. In a recent interview, Buffett proffered the words of wisdom that “the reason stocks are worth a whole lot more than they were 20 years ago, or 50 years ago, or a hundred years ago, is that companies have ploughed back part of the earnings.” In contrast to the proclivity of corporate raiders such as Icahn for what I call a “downsize-and-distribute” business model, Buffett’s business approach at Berkshire has been to “retain-and-reinvest.”

Retaining its profits for reinvestment in the growth of the company, Berkshire has not paid a dividend since 1967. Its repurchases were minimal: $1.2 million in stock between 1976 and 1978, $67 million in 2011, and, its only significant buyback, $1.3 billion (9% of net income) in 2012 from the estateof a long-term shareholder. By retaining profits and reinvesting in productive capabilities, in 2017 Berkshire’s revenues had grown to $242 billion—placing it third on the Fortune 500list, just behind Exxon Mobil and just ahead of Apple—and its constituent businesses employed 377,291 people, up from 38,000 on 1997 and 233,000 in 2007. In August 2018, Buffett said that Berkshire had repurchased “a little” stockunder a new authorization program, and with the release of third-quarter earnings on November 3, revealed that amount to be $928 million.

Between January 2016 and June 2018, Buffett used Berkshire’s ample cash reserves to accumulate 252 million Apple shares, representing 5.1% of Apple shares outstanding on June 30, 2018, at an estimated purchase price of $36.1 billion. In so doing, Berkshire became Apple’s third-largest shareholder, behind Vanguard (7.1%) and Blackrock (6.4%). If Buffett had sold Berkshire’s entire Apple stake on that date, his company would have netted a market gain of $10.4 billion, along with the $734 million in dividends that Apple had paid on Berkshire’s shares over those 30 months.

Just after the announcement in May 2018 that Buffett had purchased an additional 74 million Apple shares, interviewer David Rubenstein asked Apple CEO Tim Cook: “Are you pleased to have him as your shareholder?” Cook responded: “I’m overjoyed. I’m thrilled. Warren is focused on the long term, so we’re in sync. It’s the way we run the company. It’s the way he invests. So, yeah, I could not be happier.”

Rubenstein then asked Cook what Apple planned to do with its $260 billion in cash, most of it newly repatriated rom offshore tax havens under tax incentivesprovided by the 2017 Tax Cuts and Jobs Act. Cook’s answer: “We’re going to create a new site, a new campus within the United States. We’re going to hire 20,000 people. We’re going to spend $30 billion in capital expenditure over the next several years. Number one, we’re investing, and investing a ton, in this country. We’re also going to buy some of our stock, as we view our stock as a good value.”

With Apple repurchasing $73 billion in fiscal 2018 at record stock prices, Cook’s statement that Apple was going to buy “some stock” at “a good value” was clearly disingenuous. Perhaps that is why the Apple CEO followed with a feeble attempt to justify Apple’s stock buybacks, telling Rubenstein that Apple’s repurchases were “good for the economy as well because if people sell stock they pay taxes on their gains.” Given the enormous tax breaks that corporations and the richest households have received under the Tax Cuts and Jobs Act, Cook’s ludicrous defense of Apple’s repurchases is in effect an admission that Apple’s stock buybacks are indefensible.

As for Buffett, in an interview just after the May 2018 announcement of Berkshire’s latest increase in its Apple shareholding, he flatly contradicted his reputation as the quintessential patient capitalist.  Buffett enthused: “I’m delighted to see [Apple] repurchasing shares. I love the idea of having our 5 percent, or whatever it is, maybe grow to 6 or 7 percent without our laying out a dime.” Move over, King Icahn. Having the Oracle of Omaha as one of its largest shareholders has not in the least stemmed Apple’s voracious appetite for bingeing on its own shares.  From April 1, 2016, when Icahn no longer held Apple shares, through June 2018, with Berkshire now Apple’s third-largest shareholder, Apple did $102.7 billion in buybacks, equal to 92.9% of profits. That’s compared with $87.1 billion (78.3% of profits) in buybacks over 27 months from October 2013 when Icahn was holding his Apple stake.

As I put it in a 2014 Harvard Business Reviewarticle, “Profits Without Prosperity,” stock buybacks manipulate the market and leave most Americans worse off. With business leaders like Cook and Buffett expressing a passion for repurchases, it is no wonder that income inequality runs rampant in the United States, while well-paid and stable employment opportunities disappear. Four years ago, after Icahn had written an open letter to Cook demanding that Apple ramp up its buyback activity, I posted my own open letter to the Apple CEO on the Harvard Business Reviewblog, with suggestions on how, instead of doing buybacks, Apple’s management could focus its attention on improving the remuneration and opportunities of its employees, as well as on social investments and innovation. All of my suggestions in that letter are entirely consistent with Cook’s repeated claims that Apple is all about investing in innovation for the long term.

Even after all the buybacks, Apple’s current cash flows position it to do far more than it is doing to reward its real value creators—taxpayers and employees—while investing for the future. In continuing its massive buybacks, however, Apple is, with Buffett’s enthusiastic approval, reinforcing the destructive ideology that all of its retained earnings and future profits belong to shareholders, while, with stock price as the metric of superior corporate performance, increasing the pressure on all other U.S. companies to engage in stock-price manipulation by doing stock buybacks.

Instead Apple should be, and could be, increasing the pressure on other U.S. companies to improve employee remuneration and career opportunities as well as provide corporate support for government investment in the infrastructure and knowledge that a prosperous economy requires. Government regulation is needed to give would-be patient capitalists a helping hand. A ban on manipulative stock buybacks would be a critical step in putting corporate profits to work for a thriving American middle class.

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  1. Altandmain

    The sad part is that Apple is currently being criticized for no longer being innovative.

    All this will do is to lead to some short term stock gains and higher levels of inequality. Alas, there is a disease that affects Anglo corporations and their obsession for short term gains at the expense of longer ones. I suspect that in the long run, more long-term focused cultures will prevail.

    They should be spending their money on R&D so that they can come up with the “next big thing”, so to speak and then earning their reputation for innovation. If they did, the “not being innovative anymore” criticisms would disappear. This would also ensure that a competitor is less likely to come up with something that would fundamentally change Apple’s business model.

    Apple has huge cash reserves, so it will be a very long time before the worst of it is felt. Stock buybacks, Private Equity (with the devastating dividend recapitalization), and similar parasites will be the end of the middle class.

    1. Ignacio

      According to this, iphone global sales increased by a lot from 2007 to 2015 and have more or less stalled since. So it looks like a mature market where chinese companies have gained market share recently with lower prices. This means that profits from iphones migth slow down in following years. It looks like apple is compensating this with apps sales but those are linked with iphone sales.

      For a “long term” investor as Buffet is claimed to be it seems that the entry point in Apple (2016) wouldn’t be the best unless for the buybacks. A long term wise investor would have identified 2007 as a better opportunity. It seems Buffet applies his long term phylosophy to Berkshire Hathaway but not for other investments like Apple. It looks like he has invested in Apple ONLY because of the tax break-buyback opportunity. If these trends follow course, in the long run B.H. will be muuuuuuch larger than Apple and will basically have one shareholder. All this goes to fewer owning more and more until one capitalist is the owner of everything.

    2. Louis Fyne

      >>The sad part is that Apple is currently being criticized for no longer being innovative.

      to defend Apple (not that I want to)

      there really isn’t much more room let to innovate assuming you want to keep iPhones/laptops at the same price/same profit margin—longer battery life, more durability, more CPU power, etc.

      All the low hanging fruit has been taken out—as people generally use iPhones for relatively simplistic tasks (not many people are clamoring their iPhones than can edit video or calculate the trillionth digit of pi).

      and other companies (DRAM, etc) are throwing gobs of money into R&D, so it makes sense for Apple to just wait and buy the components off-the-shelf benefit from the R&D of others.

      So the default is hoarding cash, buybacks, salaries-bonuses.

      1. Altandmain

        The answer is that they should try to develop the next best thing.

        There will be flops. An example of a recent failure wss the Apple smart watch.

        They should be trying to release the next major product. There will be a lot of flops. The products that succeed could be a big deal. Either someone else invents it and enjoys the profit or Apple can spend money and try to get that invention.

        They prefer to milk the status quo.

      2. zer0

        No that’s the fools way to run a tech company. That’s what Microsoft did and lost horribly to Apple.

        You dont stop innovating. You actually pump more money into R&D.

        And FFS, Apple was buying Samsung batteries and screens during 2007 to 2014. Now they are buying obth from Chinese companies. How stupid can they be? Apparently, very very stupid.

        Their phones are lackluster, their watches are simply ridiculous, their laptop line is flailing, and the price of all of these is the same:
        iWatch – $1000 to $1500, iPhone $1000 to 1500, MacBook Pro $1500 to $2000.

        Seriously, its embarrassing to see the first ‘trillion $ company’ act like their dominance is innate. Its not, its especially not now, and their buybacks will hurt extra bad in this downturn. They will be forced to hold much of it for longer periods of time, which will decrease liquidity of the stock and cause major shocks when all the investment firms dump it for a newer model, as they say.

        1. ChristopherJ

          Too true, Zero. My ‘short’ apple experience was simply because I felt the company wanted it’s hand in my pocket all the time. And, having to have all your music and so on on iTunes

          They will regret not spending money on RandD – from what I see, Apple look to be way behind others already

        2. Altandmain

          Yep. Some fun reading:

          Sacconaghi says that the tech titan is spending only 2% of its free cash flow on R&D compared to 25% for its peers. Free cash flow is the amount of cash generated by a company after accounting for capital expenditures (like buildings and equipment). Since Apple throws off a huge amount of cash every year, even 2% of free cash flow amounts to a ton of money. Still, as a percentage of this metric, Apple is not investing as much as the competition is.

          The analyst notes that Apple spends 5.1% of its revenue on R&D compared to the 10% spent by other tech firms with the same gross margin that Apple generates (38%). Sacconaghi says the numbers show that Apple would need to double its R&D spending just to match the percentage of revenue spent by its peers.

          There’s a lot of room for growth and I would argue that R&D would lead to more “shareholder value” in the long run than any buybacks.

  2. divadab

    I’ve been toying with the idea of a screen to select short positions – starting point companies with stock buyback programs ranked by percent of float. Why? Because, (wonderful article btw), stock buybacks are symptomatic of poor management focusing on managing the measures rather than the substance of their business. It’s symptomatic of a company in decline – previously wildly successful, now running on past successes and using funds that should be reinvested in the business to support the stock price through financial manipulation.

    By all means pay a dividend – why is there such aversion for this basic strategy to distribute profits to shareholders?

    IMHO management through stock options is a big contributor, combined with senior management looking ahead to comfy retirement. All symptomatic of decline and managed shrink rather than growth and managed capital investment. Jobs must be spinning in his grave.

    1. Yves Smith Post author

      Because corporate profits are at twice the level that Warren Buffett deemed to be unsustainably high in 2004. Companies should be paying workers more.

    2. Louis Fyne

      there are stock indexes/etfs created for what you exactly described—but as a product for long investors. eg, PKW SPYB

      two sides to every trade.

      ps, if i remember correctly, a poster child for ill-timed buybacks was 2006-7 AIG. there are other examples now. see GM. IBM. lots others.

    3. tegnost

      divadab from nov. 8 market value post…
      Anyone investing in bonds in the low interest rate environment that has prevailed these past ten years would disagree, I think.

      I call rubbish on this article. Not my experience. My investing strategy is to follow the oligarchs. Invest in stocks that make money by destroying the planet. Take profits when things look toppy. Reinvest dividends.

      Buy bonds at your own peril. Maybe when rates are in the 6% plus range but we’re a long way from that.
      sounds maybe like you are talking your book, with a little stab at why should management pay in options when you want more in dividends…

      1. divadab

        Well, yes, tegnost, I’m commenting according to how I run my affairs and how it makes sense to me for public companies to run theirs. I have no pension, only 401k’s and IRA’s. I am aghast at the valuations of Apple et al and it seems to me that in the long run stock buybacks and other fakery will not sustain them.

        Yes also to Yves’ point – pay employees more of the profits their efforts are generating. Call it a “dividend” or a “profit bonus” to keep base pay within reason and avoid having to cut staff in a bad year – just cut the bonus.

        And reinvest profits in the business – using hard-earned cash to buyback stock, reduce the float, and make management options worth more is mostly value destruction in the long run, IMHO. SHoddy, stupid, short-sighted, and wrong wrong wrong. Complete abdication of sensible corporate governance. Too many public companies are management clubs run of by and for insiders and this is a bad thing, IMHO.

        1. tegnost

          I appreciate your straightforwardness in both these cases, and as you point out it makes sense to view the landscape and invest accordingly, I debated myself briefly whether I should bring it up,, but it was straightforward and you continue that here, thanks…my own dime store analysis is, based on anecdote, those I know who are in apple stock are a little different from you, they are developers who made one or two big piles, (and I imagine this theory goes with app writers as well), and are funding their next big thing with the dividend while not raiding the nest egg, so like tesla it’s a fanboi subsidy and sort of maintains the cult status and funds some apple watches and things like that, but I have zero invested exposure so it’s easy for me to be “off the cuff” as it were.

          1. divadab

            @tegnost – this is a great venue for sounding off and very well moderated so little trollery, so, thx for the conversation. I don’t deny trying to proselytize, however, which I guess does come under the rubric of talking my book.

            Your take on Apple investors is interesting – there is a lot of herd behavior in this domain, both retail and industry, note that it’s rated 2/3 buy or strong buy, 1/3 hold; trailing PE 15.8 and still outperforming Nasdaq and S%P 500 by miles. I don;t think it’s a short’s paradise at this point and I’ve almost convinced myself to go long…… ;>}

  3. The Rev Kev

    There is a place in Pennsylvania – a small field on Cemetery Ridge at Gettysburg – which marked the furthest advance of Pickett’s charge back in 1863. It is now known as the “high-water mark of the Confederacy” because of this. The relevancy here? When I heard a coupla months ago that Apple had had a trillion-dollar market capitalization and was the first to do so in history, I pegged in my mind that this was probably the high-water mark for Apple. With this capital return program, the lack of new products coming out as well as the crapification of their present product line, unless they have a radical change of course I think that we have seen peak Apple. I bet that to reach that capitalization target, that they cut back on investments and the like to reach it too. Yet one more victim of neoliberal management.

  4. Arizona Slim

    Slim here. Checking in from the coworking space, which happens to be the only one left in Downtown Tucson.

    Back in 2015, when I first became a member, this place was like Mac heaven. Seemed like just about everyone had one of those oh-so-skinny Mac laptops.

    Over time, I noticed a change. Fewer computers of the Apple variety and more of other brands. I just took a little walk around the area where my desk is, and guess what, not a single Mac to be found.

    Okay, that’s Slim’s coworking computer report. Now, let’s look at phones. Where the same diversity prevails. I’d say that we have more people using non-Apple phones and Apples.

    So, there you have it. One coworking space. And a definite move away from Apple.

  5. ObjectiveFunction

    As a believer in private enterprise acting within its environment, I am open to the Hudson / Marx view of differentiating productive ‘skin in the game / sweat equity capital from the parasitic rentier sort. But I’m afraid I find this piece filled with elliptical sophistry, like:

    Apple is not giving them “capital.” It’s just transferring cash that may be used for a multitude of purposes, ranging from household consumption to building the war chests of hedge-fund activists, augmenting their power to engage in predatory value extraction… Or possibly reinvested in more productive businesses as, wait for it, *capital*? There is a valid point here but it gets lost in hyperbole…


    U.S. business corporations have been handing over the gains of innovative enterprise to public shareholders far in excess of their contributions to the processes of value creation. Losing out are households, whose tax dollars fund the government investments in infrastructure and knowledge that a company like Apple requires, and Apple’s employees

    So, ahem, You Didn’t Build That?(genuflects). Also, did I understand that only the first $97M in Apple shares counts as true investment? Then only those honest ‘gains of innovative enterprise’ should be expected to be redeployed in R&D, or salaries.

    Since the rest is bubble funny money (“a party that never gave you anything”), or klepxecutive options,what does the core enterprise lose if those same speculators take all that froth back? (I’m being cute here, the answer of course is *leverage*, but the author makes no mention of the debt treadmill).

    Also, the moment wise solons try to divert the froth to ‘honest’ use (arbeit mach frei, plutokraten!), doesn’t it just evaporate and go elsewhere? Expropriation is a one-off (unless you’re Argentina).

    In sum, if you think shareholders, productive and parasitic alike, ought to pay *much* higher capital gains taxes to sustain the society that hosts them, and cushion the instability and inequality caused by all the moving fast and breaking things, fair enough. But why not just say that, rather than these gymnastics?

  6. Carolinian

    Given the high (over?)pricing of their products then surely another “investor” in Apple’s wealth would be the customers themselves. How much longer will they pay far in excess of production costs for the privilege of that logo on the back of their devices?

    1. Flying Badger

      Disclosure: long AAPL for many years. The past two weeks were ugly but this has happened before. I don’t know of a stock where overpaid anal-cysts are fawning over it one month and trashing it the next, but here we are.

      I’m typing on a 2010 Macbook Pro. It’s eight years old and still runs fine. My Dell/HP/Lenovo laptops issued by work generally fail after a year. So I’m fine with paying a premium for Apple gear because I don’t need to replace it every year or two. But it’s hard to find compatible peripherals — USB 2 and FW800 are dead tech — and OS support ended with High Sierra, so I might replace it eventually. Some day. Maybe. I’ve certainly gotten my money’s worth out of it.

      Phones, well, the tech gets so much better every year, especially with cameras. If you’re into photography but don’t want to drag a DSLR around, well, you’re going to replace that phone pretty often. Otherwise there’s not much reason to do it other than to show off (glares at husband and his iPhone XS Max).

      I’m probably the only AAPL shareholder who doesn’t want everyone buying a new iThing every year, but I’m weird that way.

      Cheers, haters.

  7. John

    “The sad part is that Apple is currently being criticized for no longer being innovative.”
    According to this Apple tops the list of innovative companies:

    Apple’s R&D budget is at a record high and growing. Apple’s R&D budget is among the top ten in the world (about $11B for 2018).

    “The only time in its history that Apple actually raised funds from public shareholders was its initial public offering in 1980, which yielded $97 million for the company.” This is clearly false. You’d think a professor of economics would know better. Every time Apple issued new stock they received financing from the public. Much of the new stock was given to employees for various reasons.

    It is a tired canard that Apple products are overpriced. This sounds to me like people who want Snap-on quality gadgets at Harbor Freight prices. Wishful thinking.

    It’s great to critique Apple, it is disappointing that so much Apple criticism is so weak. I’ll grant that it is difficult to critique Apple because they are fairly opaque about future plans. What they are currently selling was designed over the past five years. What they are working on now and next year won’t be seen for several more years.

    “They should be spending their money on R&D so that they can come up with the “next big thing”, so to speak and then earning their reputation for innovation.”

    Maybe they are. Maybe the “next big thing” will come out in three years and has been under development for the last ten years. Who knows? It makes sense for Apple to keep this secret. Why tip their hand to the competition?

    Apple is a target because they have been successful and they are fairly large. However, their value is not speculative. Currently the P/E is 16.92 (trailing earnings). This is a low value. The current average for the S&P500 is 22.

    I agree that corporate taxes should be higher. The tax cut for corporations this year was wasteful. The argument that corporations would invest in plants and equipment if only they had more money was completely wrong. Corporations were swimming in money even before this tax cut.

    Corporations used to pay a larger fraction of Federal income and I’d be happy to see that go up again.

    However, this should be applied across the board, not just to Apple.

    I have two suggestions for a fairer corporate tax.

    First, there should be an alternative minimum tax for corporations of about 15 – 20% to gain revenue from corporations that have been gaming the system.

    There should be a second tax of perhaps 5% that could be offset 100% by state taxes. This would cut back on corporations shopping around for low tax rates and base siting decisions on how it affects their business.

    1. Yves Smith Post author

      First, Apple has not been an innovator in the sense of developing new technologies. It has been a very very clever user and packager of technologies developed by others. For instance, all of the 12 core technologies in the iPhone were developed by the government.

      Second, Apple has not been showing any “innovative” tendencies since Tim Cook became CEO. The Mac sucks. The iPhone is extracting from its base.

      Third, if you know anything about accounting, it’s easy to attribute corporate overheads anywhere you want. So you have no idea what the R&D really amounts to. There are tons of articles like this.

      Why R&D Spending has Almost No Correlation to Innovation

      Why R&D Spending Is Not A Measure Of Innovation

      Why R&D Spending Has Almost Nothing to Do With Innovation

      Oh, and Apple had a low % of R&D spending relative to other tech cos in the days when it was developing its storied iPod and iPhone.

      Apple’s R&D spending proves innovation isn’t all about money

      Its higher spending has not been productive:

      Apple R&D Spending Way Up, But Not Much To Show For It

      So some are calling for Apple to throw even more money at the problem:

      Analysts Criticize Apple Over Low R&D Spend

      1. rd

        Apple has been the best in the world at figuring out how to take a complex product and have human beings interface with it. They pounced on the PARC GUI way back and turned that into Mac while Xerox abandoned the interface. Since then, they took MP3 players and turned them into iPods, cell phones and made iPhones, music MP3 rippers and made iTunes, etc. None of the products were revolutionary but they were designed with the user at the forefront instead of the technology developer.

        Much of this was driven by Steve Jobs. The big challenge for Apple is whether or not that single-minded focus on the user survives him or if another company takes over that spot.

        1. Yves Smith Post author

          I beg to differ. That was not “driven by Steve Jobs”. He was singularly responsible. The GUI of the NeXT was the best of any OS ever.

          After he died, Apple almost immediately crapified the icons on its desktop and started trying to make the desktop more like the iOS for no good reason. In one “upgrade,” the made the bone-headed decision to change the perfectly logical syntax for downloads of mail attachments (use the name on the attachment) and instead substituted long and arbitrary character strings that make it impossible to search that folder. Again showing their distaste for information management, they also moved that folder way way down the hierarchy, making it hard to get to. I could go on.

  8. Mickey Hickey

    Apple has been losing market share. This year for the first time Apple has been passed by the Huawei Mate 20 Pro with a half dozen companies in a threatening position from a quality, performance, aesthetic and price perspective. The executives are engaging in bonus pumping before the party ends.

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