10 things Apple did right in 2009

Apple's 2009 execution was nothing short of spectacular, given the sour economy and CEO Steve Jobs' medical leave. Apple executives handled both circumstances, which might have sunk another company, with finesse and subtle but direct aggressiveness. I had a difficult time narrowing the did-good list to just 10 items. I'll post a did-wrong list later today or just after midnight tomorrow. For now, I present the list of 10 things Apple did right in 2009 -- in no order of importance. They're all important. Apple:

1. Kept Mac prices high. While Windows PC competitors slashed computer prices -- and so their margins and profits -- Apple held above-$1,000 pricing firm for iMac, Macbook Pro and Mac Pro. The higher pricing surely didn't seem to hurt Mac sales, which were strong all year. Meanwhile, low-cost netbooks sapped Windows PC margins and profits. Apple did right by lowering prices at the high end, which simply opened up more sales over $1,000, where Apple has more than 90-percent revenue share for computers sold at U.S. retail, according to NPD.

2. Told everyone: "There's an app for that." The recession gave many companies reason to cutback advertising budgets. But Apple kept the marketing strong, across different media types, including online, print and television. By far, iPhone advertising dominated the lot, with increasing emphasis on the applications. It was a smart move, considering that the 3GS model was an evolutionary product lacking compelling new features.

3. Appropriately priced Snow Leopard. Apple reaps high margins from software. Given the economy, Apple could have easily justified the usual $129 pricing for Mac OS X 10.6 (aka Snow Leopard). Instead, Apple offered the software for $29 -- or $49 for a five-user Family Pack -- to Leopard users (not that there is anything really stopping older Mac OS X users from upgrading). Some vocal Mac blogs have called the pricing appropriate, as signaled by the "Leopard" in the name; Apple added few new features, so lower pricing was justified.

That's a rather inane way of thinking. Improved Exchange support is a huge new feature improvement. I've criticized the Mac OS X user interface as being tired, but not the reworked plumbing. There is plenty of new engineering in Mac OS X 10.6, just not where most users will see it. Snow Leopard is the most important Mac OS X release since v1.0 shipped in March 2001. The lower pricing encourages existing users to upgrade to 64-bit architecture, preparing the Mac market for Mac OS X 10.7.

4. Lied about Steve Jobs' illness. This one makes both lists, because Apple's execution was both good and bad. Using "lied" surely will inflame hardcore Mac fans, but "misled" simply doesn't apply here. The lying started in December 2008, with the announcement that Apple would pull out of Macworld from 2010, which really masked something bigger: Jobs wouldn't give the 2009 keynote. Apple dished out information piecemeal, ending with announcement of Jobs' six-month medical leave.

Apple grappled with a difficult problem: How much outsiders, particularly investors, identified the persona of Steve Jobs with Apple's success. Timing complicated matters. The late-September 2008 stock market crash hit Apple hard, as it did other public companies. Apple had legitimate concern about how news of Jobs illness might affect Apple's falling share price. The stock hit its bottom for the year in late January, about the time Apple announced Jobs' six-month medical leave. Withholding information may have prevented a short-term run on shares. But as I'll explain in the did-wrong list, Apple may lose long term.

5. Updated the $999 Macbook. In late 2008, Apple tossed potential buyers one older model white MacBook for under $1,000. Apple updated features throughout the year, later introducing a redesigned model with good features for the same $999 price. For consumers looking for a cheap Mac, Apple delivered a no-compromise laptop (That's no-compromise compared to other Macs; I add this for benefit of commenters comparing to Windows PCs).

6. Put Phil Schillers' marketing skills to work. Super-secretive Apple broke the silence several times during 2009, using its marketing chief as mouthpiece. Schiller addressed developer concerns about App Store approvals in a surprisingly proactive fashion. I would describe Schiller as "Mr. Likable." He's the right man to mollify angry or confused developers or to quiet raucous bloggers bashing Apple. In November, he made the interview rounds explaining the App Store approval and rejection process. Business Week got a big interview. Sigh, too bad the new owners sacked senior columnists not long later.

7. Lowered iPhone pricing to $99. In conjunction with the June launch of iPhone 3GS, Apple continued selling the 8GB iPhone 3G for 99 bucks. The lower price point opened a new market segment of iPhone buyers, which includes teenagers. For example, according to ComScore, among U.S. consumers planning to buy an iPhone within three months, more than one-third said the iPhone 3G. For many buyers, the iPhone 3GS' $199 starting price is simply too much for their budgets.

8. Supported HTML 5 in Safari 4. Some people may see Safari's HTML 5 support as mere marketing, seeing as how the standard isn't finalized. Oh but it is so much more. Apple doesn't want Flash on iPhone, but that's how most video is delivered on the Web. If Apple lets the Flash cat out of the bag, it will try to claw out App Store's eyes. The last thing Apple wants is a rival development platform on iPhone (and even HTML 5 risks some development competition in the browser). But no Flash means no video outside of Apple technologies.

By supporting HTML 5, Apple:

  • provides a browser platform for plug-in free RIAs, rich Internet applications, which could generate more cross-platform apps or services for Macintosh and eventually iPhone.
  • opens the way for plug-in free audio and video streaming -- no Flash required -- on Safari for computers and eventually the mobile browser.

For today, iPhone's browser offers limited HTML 5 support, but that does include audio and video tags and HTTP streaming. Microsoft Silverlight video streaming, using Internet Information Server Media Services, over HTTP to iPhone is one example of what's to come.

9. Took out Psystar. Apple's legal battle with the Mac cloner was more than about intellectual property rights. Apple needed to win, which it effectively did earlier this month, in order to establish important precedents (legally and concretely) against software piracy. Psystar's Mac cloning was the most visible misuse of Mac OS X licensing since Apple started offering Intel-based computers four years ago next month. Unlike Microsoft, Apple doesn't use product activation, which wasn't a big problem when Macs used PowerPC chips. Apple can control piracy more on trust, which is enforced by its end-to-end, software-to-Mac model. Hackintosh threatens that model, which Apple has now successfully defended.

10. Opened new retail stores. Apple launched the first Apple Store during a recession. Why should another recession be reason to stop opening new ones? At a time when the weak economy caused major chains to close, including Circuit City this year, Apple continued its retail expansion. It's a smart investment in the brand, product sales and customer service.

Apple opened the 280th store, on New York's Upper West Side, in November and plans another 40 or so store openings in 2010. Sales per store is about $26 million, and Apple consistently claims that half of Mac buyers are Windows users.

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