Explaining Southern California's economy

Reportings: Apple and America; Friday's jobs report; Ben Stiller's compound

Premiere Of Columbia Pictures' "30 Minutes Or Less" - Red Carpet

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Ben Stiller owns as compound — yes, a compound — and he isn't afraid to sell some of it for $7.3 million.

Apple can't save America: "[E]ven if Apple remains as successful as it has been under Mr. Jobs, that success long ago decoupled from that of the broader economy. (The Economist)

 

Tomorrow's jobs numbers from the BLS are making everyone nervous. The Wall Street Journal surveys forecasts and finds that everyone predicts less than 100,000 total jobs added in September. But BNP Paribas expects another month of net zero jobs growth, leading the unemployment rate to rise to 9.2%. (WSJ)

 

Ben Stiller has sold part of his $12 million Hollywood compound. The take? $7.3 million. So does this mean that Stiller has a lot less compound? And more importantly: Ben Stiller owns a compound?! (LAT)

 

Follow Matthew DeBord and the DeBord Report on Twitter.


Photo: Kevin Winter/Getty Images Entertainment

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Steve Jobs and the California Way of Business

Steve Jobs' childhood home, with the garage where he and Steve Wozniak started Apple.

Kevork Djansezian/Getty Images

Steve Jobs' childhood home, with the garage where he and Steve Wozniak started Apple.

Apple co-founder Steve Jobs' death at 56 has provided ample opportunity to reflect on his life and his status as an American visionary, a character out of one of Apple's "Think Different" ads. But Jobs was also a Californian, and it's worth asking whether he represented a "California Way of Business."

Gov. Jerry Brown certainly thought so. This is from the Wall Street Journal, and includes Brown's reaction to Jobs' death:

California governor Jerry Brown, who knew Apple Inc.’s Steve Jobs since his first governorship when Mr. Jobs sat on a innovation commission he created, said Wednesday of the Apple co-founder’s death: “Steve Jobs was a great California innovator who demonstrated what a totally independent and creative mind can accomplish. Few people have made such a powerful and elegant imprint on our lives…"

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Wait! Maybe Yahoo will move to LA!

A while back, I suggested that Yahoo, the beleaguered technology colossus, should close up shop in Silicon Valley and move all its operations to Southern California. (It already has an office in Santa Monica.) Now CNN's Juilanne Pepitone reports that something along those lines might be in play. Could Disney buy Yahoo? Here's the lowdown:

While Disney hasn't thrown its name into the ring, one analyst thinks it and its big-media rivals should consider a Yahoo buyout.

"The big guys -- Apple, Google -- aren't interested. And either way, it would make more sense for a traditional media company to buy Yahoo," says James Dobson, stock analyst at The Benchmark Group.

That's because traditional media companies are struggling with how to monetize their online presence. They're still working through the transition from old to new media, and they face stiff competition from upstart online publications.

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Maybe Apple won’t be fine after Steve Jobs

First off, it’s definitely sad that Steve Jobs is stepping down as the CEO of Apple. I shed a small tear when I read his resignation letter. So did Reuters' Felix Salmon. Harvard Business Review put up six separate post about Steve’s departure and what it means. This is Topic A right now in the global business conversation.

I’ve never owned anything except Apple computers (no iPhone, so far), but I have used plenty of PCs. No contest, really. Apple builds a nicer machine (I won’t say better, at the risk of discounting the many legitimate complaints John Dvorak has made over the years).

The consensus among the technorati and among observers of Apple’s business is that Jobs has done as much as he can to ready Tim Cook to take over. Plus, Apple has a good bench of senior leaders, and the company hasn’t even come close to extracting as much value as possible from the current product lineup (this is Henry Blodget’s take at Business Insider). So... no worries. In the midst of his justifiably misty recollections, Felix makes the Apple Forever case:

Does Apple still have an outsize personality who can slice away extraneous features on hardware, say no to the demands of the marketplace, and give us not what we think we want but what we never knew we wanted? I think it does: Jony Ive fits the bill quite nicely. And Apple’s amazing relations with its suppliers — the way that it can get chips and hardware into its devices that the rest of the world can’t get its hands on for any amount of money — is now baked in to the organization, rather than being reliant on a single man.

The formula, then, is clear. And with or without Jobs, Apple is, for the foreseeable future, going to coin simply astonishing amounts of money. It made $7.3 billion of profit just in the last quarter, on revenues of an almost unimaginable $28.6 billion. That makes Apple one of the most profitable companies the world has ever seen — and makes its stock look almost cheap, even at a market cap of $350 billion. 

No argument on the financials, but I don’t entirely buy that Apple’s future growth is guaranteed because the company re-Steved itself after the near-death experience of the late 1990s. Also, as much as I share Felix's admiration for Ive, being a great designer isn't the same as being a great American idea man. Apple’s lifeblood is innovation, and as we march toward iPhone 5 and iPad 3 -- and see the steady decline of the iPod -- it's clear that Apple needs to remake the user experience of an another business. So far, Apple TV has been disappointing. iAd hasn’t really transformed mobile advertising -- in any event it hasn't been able to command the premium that Apple wanted. Remember, this is the company that created desktop publishing, revolutionizing an industry that hadn’t really seen much meaningful change since Gutenberg.

Apple saved the music business. Apple made cell phones super-cool. Apple made tablets a reality, rather than something that had previously been seen only on Star Trek. Some tech pundits think gaming is next (with its Xbox, this is just about the only place where Microsoft has long-term leverage over Apple), although earlier this year Forbes argued that Apple already has a gaming platform, of an ad-hoc nature. Weirdly, for closed-down Apple, gaming has been a triumph of free-form open development. 

I wouldn’t put it past Apple. Angry Birds certainly has game-box makers and developers freaked out.

Still, something important has changed in Apple’s DNA since the iPhone and iPad became the key products, edging aside laptops and desktops. Apple has devoted itself to building devices that are dedicated to consumption rather than creation. Plus, you don’t really think different by buying an iPhone -- you think like 100 million other people who use iPhones worldwide.

True innovation in business is exceptionally rare. Jobs picked his spots: Apple didn’t invent the PC, it made it better; Apple didn’t invent the mobile phone, it made it better. His genius was to look at things that were deemed important to the future and make them accessible, effortless, easy. Jobs didn’t just do this in tech -- at Pixar, he took animated movies and made them broadly relevant again, a move that shook up Disney so much that it bought the company.

But jobs hasn’t preserved anything. He’s always looking to disrupt, albeit with an esthetic differentiator (which is itself a type of disruption -- BlackBerrys and ThinkPads were effective, but hardly beautiful). That’s why new CEO Tim Cook’s first message to Apple isn’t necessarily reassuring. This is from the email he sent out today:

I want you to be confident that Apple is not going to change. I cherish and celebrate Apple's unique principles and values. Steve built a company and culture that is unlike any other in the world and we are going to stay true to that—it is in our DNA. We are going to continue to make the best products in the world that delight our customers and make our employees incredibly proud of what they do.

But Apple needs to change. In fact, as the Jobs Era ends, it needs to change more than ever. Nobody wants to see the now most-valuable tech company -- and almost most valuable company company -- in the world replay its previous decline, when merciless price competition and a disorganized product lineup nearly bankrupted it. The temptation for Cook will the preserve, preserve. And that would be a big mistake. Apple needs to spend its money on the next big thing, not on staying Apple.

Photo: Apple

 

 

 

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