can confirm, IBM (GTS at least) has more people dedicated to ensuring you project your future billable hours and will directly reduce your performance rating for not providing the projections every 2 weeks than if you miss client deliverables consistently.
I'm sure lots of people at IBM have EE degrees throughout it's existence. That hasn't caused the company to behave any differently. When approached by IBM to help my company build out our cloud infrastructure, we had salient measured targets and the reps (and subsequent "technical people to answer our questions") who presented were woefully inept. I was the Director of Engineering, what did they think they were doing pitching me butterflies and rainbows? What IBM has done for decades, like all the other parasitic remnants of industry (Oracle, Yahoo, arguably Apple, etc), and no CEO is changing that culture.
They are indeed incompetent, since a large chunk of competent people won't go there any more. But what kind of financial voodoo is keeping them afloat? Is it another Sears in waiting?
Present day IBM is not very different from GE. It is a financial company trying to survive from profits in areas it monopolizes. Without anything else to do, GE is going down hard and now is being investigated by the SEC for "accounting practices", i.e., financial manipulation to keep the company alive.
They're effective as an Oracle-like consulting company that buys third-party products, integrates them into their platform, and then cross-sells them hard.
I don't know what they meant, but I think the case is reasonably easy, if the accusation is "financial engineering." Apple's overall range of products have shrunk over the years. I'm old enough to remember when they had 20 different kinds of desktop computers, updated every year. They now have 1 desktop, updated every few years, one laptop, updated every few years.
There is a sense they've given up on everything but the iPhone. Arguably, Apple keeps producing Mac computers only because iPhone devs need to run XCode somewhere.
The iPhone was introduced in 2007. It was very innovative at the time, though now it has dozens of Android clones. Total sales of iPhones seems to have peaked -- increases in Apple's profits have come from raising prices and managing margins.
This last bit would be the heart of the case that Apple is now increasingly financial in nature and therefore parasitic. They don't seem to be rolling out much in the way of new products, and certainly nothing as "change the world" as the iPhone was in 2007.
I think it is well known that Apple does not have the "division per product group" structure that almost all other large companies have. But Apple has an unusually narrow range of products for such a large company.
Even projects that Apple seemed excited about 6 or 7 years ago, such as home entertainment, no longer seems to be priority for them. I can tell you from personal experience, their Apple TV has been absolutely stagnant for years, and many of the problems, which I assumed they would eventually fix, have not been fixed.
> They now have 1 desktop, updated every few years, one laptop, updated every few years.
Not true. They have three desktop form factors — Mac Mini, iMac and Mac Pro — and three laptop form factors — MacBook Air, 13" MacBook Pro and 16" MacBook pro. And each can be variously customised by CPU, memory, storage, etc. Most of these are updated with 1-2 year cadence.
Of course, it's much easier to make any case if you disregard the most basic facts within the first paragraph.
I think that a case for having a very lean product line-up can be made from an engineering perspective as well. Having few SKUs and changing them rarely allows to focus on quality. It allows for very efficient manufacturing, since production is all about economies of scale. For already established product types, it enables iterative refinement. But perhaps most importantly it allows to put innovation focus on new kinds of products. The PC, laptop and tablet have all been invented and standardized.
With the AirPods, Apple has again managed to establish themselves as a leading player (in affluent market/segments). They did the same with smartwatches a while back. Their track record is strong. Probably will do the same with... $FutureProductCategory. Of course this is only partly due to engineering and product design - brand building and marketing also vital components.
And I think it is fair to say, that while a strong engineering organization, Apple is not engineering-driven. They consider engineering as a means to deliver good product, not an end in itself.
You are missing the iPad and their smartwatch. It is very important for a premium company to have lesser variety, but higher quality. I cannot respond to quality of their Macs, however the tablets, watches and phones are pretty well made compared to their counterparts. The only exception was old Nokia windows phones, but they do not exist anymore.
Hmm. At first I disagreed with you, but when I think about it over time, I think I'm forced to agree.
Their newer MacBooks are going to be ARM based, which, I think, is mostly so that they have more people to develop apps for their phones and iPads. The rest of their customers will be buying them simply for day-to-day stuff wrapped in a pretty package.
I'm trying to think of a major Android phone manufacturer that does the same as Apple, but am coming up blank. Samsung, Sony, Oppo, etc, are all companies that have a multitude of products.
Maybe the only other comparison would be Google, but they were primarily a software company that is now making Pixel devices.So, not quite the same thing.
> Their newer MacBooks are going to be ARM based, which, I think, is mostly so that they have more people to develop apps for their phones and iPads.
I think it's oversimplifying the situation to say "Apple wants ARM just for mobile", though. While that's certainly a benefit of having a single architecture to support in their product ecosystem, there have been plenty of threads on HN about how Intel's rate of chip improvements have been stagnating. The much-touted scaleup of their 10-nm chips ended up being delayed by 2 years, and their 7-nm chips aren't arriving until 2023, by their own (likely optimistic) estimate[1]. The more likely narrative is that relying on Intel became untenable both cost- and performance-wise.
I feel it has been a shift of focus from building new and innovative products to building supremely profitable products. It doesn't sound that big of a difference but in terms of how it affects the end user it is a noticeable change. You feel more like cattle that is being herded to buy this and that, very expensive stuff, knowing that something is off and it shouldn't be this expensive.
When trying to surpass their last year's profit margins they shouldn't do it mainly by increasing the prices. Even though the frog doesn't leap when you increase the temperature slowly, shouldn't mean you should do it.
IBM business units are black (Profitable or losing a small amount of money but missing targets), green (exceeding targets), or red (rapidly dropping revenue and losing money) blocks.
They buy a business, it's black. They don't understand how the block works, but they need to to be more profitable, so they paint the IBM logo on everything, cut costs and headcount until it is green for a short while. Then it turns black, they rinse and repeat. They make it green a few more times and then finally instead of green, it turns red!
Then they combine some red blocks, bundle them together, make it look black or green and sell them off.
This looks like the biggest bundle jettison ever, but after acquiring Red Hat, that makes sense.
Contrary to popular knowledge, free market companies don't grow to take over the world. They grow until they get strangled by their own bureaucracy, and then rot away to be replaced by a younger, nimbler company without the bureaucracy.
History is full of examples. Just look at the top 10 American companies by market cap, decade by decade.
Sounds like an interesting exercise. Let's look at the ten largest American companies by market capitalization in 1960.
1. American Telephone & Telegraph is now called AT&T and was in the top 10 within the last decade.
2. General Motors has dropped off the top 100 for a while, but was the world's largest automaker within the last decade.
3. E.I. du Pont Nemours dropped off the top 100 in the last few years, but was the world's largest chemical company within the last decade before selling off Dow.
4. Standard Oil Co of NJ is essentially ExxonMobil and has been the #1 largest company within the last decade.
5. General Electric has been in the top 10 within the last decade.
6. IBM has been in the top 10 within the last decade.
7. Texas Company is now called Texaco and is part of Chevron, which has been in the top 10 within the last decade.
8. Union Carbide had one of the world's largest industrial disasters, and its later history is involved with duPont above as part of Dow.
9. Eastman Kodak ceased being relevant in the last 20 years.
10. Sears Roebuck & Company has collapsed, last being the largest retailer in the 1980s.
tl;dr: Of the top 10 in 1960, half have been in the top 10 within the last decade (including the former #1) and one has been #1 within the last decade.
I do plan to go back farther in time; I think it will also be interesting.
The claim about RCA seems unlikely. Radio Corporation of America stock grew very fast through the 1920s, peaking in September 1929 before the crash. However, even at the very end, it doesn't seem to even have been top 10 among industrials in the S&P index: http://piketty.pse.ens.fr/files/McGrattanPrescott2001.pdf#pa...
Instead, on that list we have companies like General Motors, General Electric, and Standard Oil of New Jersey that were still big in 1960 (and as mentioned above, some still so in the last decade).
And yet Jack Welch somehow came to be looked upon as a management guru instead of someone who gutted the long-term viability of GE in favor of financialization.
Luckily I think history is doing its job in changing how Jack Welch's legacy will be remembered. I don't think students or upcoming businesspeople are really learning Welch's approach anymore.
The business lines you offered as examples are low margin commodities or stuff GE really sucked at. Trains seems like a reasonable high margin line of business for a company that is actually good at industrial engineering.
but is it high-margin, high-growth? The same thing is happening in Germany with Siemens for years... - just 10-20 years later than the US. Once they did everything (for real): car parts, control software, nuclear reactors, trains, solar cells, semiconductors, computers (even mainframes), medicine products, household appliances. Nowadays: BLOCKCHAIN. I guess the job of a chinese "we will rule the world"-planner is a lot easier through western greed, than it should be.
If it was train lines including rail ownership I can see why they would want to drop out. Logistically that's a nightmare unless it's totally private.
Then again around here the rail lines are mostly owned by grain/grass farmer groups who ship product by rail and can load from their farm directly. Passenger lines that share the rails wait for those trains.
GE was a big player in the diesel-electric locomotive market, starting with the GE Universal series, then the Dash 7, Dash 8, Dash 9, and Evolution. The division was sold off at some point there, I think before the Evolution. Back in the earliest days the engines themselves were provided by companies such as Cummins but in the 60s GE started building its own prime movers.
As stated by another post, they built the trains but didn't own the track.
However, I'm not sure your conclusion about owning railroads is a nightmare is true. Berkshire Hathaway (Warren Buffet's company) bought Norfolk Southern in 2007 and it's done fairly well since. My understanding is that these are relatively stable businesses because the barrier to entry is large enough to stifle competition.
How much of this is due to changes in the nature of the economy vs mismanagement? In the 50s and 60s the largest companies were focused in manufacturing and oil. Now the largest are in tech because the economy is different.
GE is an interesting example because, as a conglomerate, I would think it's better poised to strategically change the focus of it's business...maybe that's the point of the IBM spin-off.
Apple is already on it's way to the trashheap. There's a reason why innovation has essentially stopped and now comes down to "a few megapixels more in the camera", while quality control - both in their hardware as well as their software - has taken a big hit.
I guess they will succumb faster than the old Xerox-age market leaders, because they are not focussed on consulting (= making other companies believe their constantly syphoning money from them brings value).
> How is literally designing your chips to a point where they could be desktop class to replace x86 not innovation?
That's more a sign that the company wants more profit by owning the top to bottom stack.
Perhaps they saw the existing chipsets as not delivering what they wanted or not scaling to fit demand, but it's still an investment not directly tied to product (their core competency).
> That's more a sign that the company wants more profit by owning the top to bottom stack.
Is bringing mobile/embedded and now desktop-class CPU design in-house really something one does as a cost-saving measure? Apple wants control over their entire stack, and sure, that relates to their business as a whole, but if this was solely about profit maximization surely there would be better strategies.
> it's still an investment not directly tied to product
I'm not sure I follow your reasoning here. Are you arguing it's not a direct investment because the CPUs aren't products in and of themselves, but rather components for other products? If so, I don't agree -- Apple's investment in, say, case tooling/manufacturing processes and equipment exclusive to their products is surely an investment directly tied to those products, right? The CPUs are likewise components exclusive to Apple products. That seems to me to be a pretty direct investment.
I don't understand this response at all. Does innovation not count if you're not doing it for charity? For several years I was reading articles about how Moore's Law was totally over and we couldn't expect any more improvements in chips, and then along comes Apple to blow x86 out of the water.
> but it's still an investment not directly tied to product (their core competency)
I don't even agree with this- Apple's core competency is the top-to-bottom customer experience, which they (almost certainly correctly) think they can improve by making their own silicon. But even if it was true, so what? Again, "investment not directly tied to product" doesn't make innovation "not count".
> How is literally designing your chips to a point where they could be desktop class to replace x86 not innovation? What other company is doing this?
Facebook, Google and Amazon are known to do their own server design; it wouldn't surprise me if any or all of them were doing custom processors (e.g. better virtualization features for their clouds, or processors that are more oriented towards their workloads). It doesn't sound like innovation, more like cost cutting; these processors aren't delivering a step change to end users, at best they're squeezing out a little more battery life. (By contrast e.g. that sapphire screen that was rumoured would have been innovative, because sapphire can do stuff that glass simply can't).
Those companies don't need third parties to develop anything so why would we know? Facebook was building custom server hardware for years before it became public knowledge that they were doing it.
You're right — we don't know. That gives us two options. Either we acknowledge the innovations we do know about and have proof of, or we use wild guesses and assumptions to dismiss those innovations.
I'll be happy to praise Google or Facebook for advancements in CPU tech if and when they show us such a thing. Until then, publicly available facts are that Apple is innovating in that field and they're not.
The very fact that we can't tell shows that this isn't any significant innovation. Even the part about handing out dev kits doesn't actually show anything - using an off-the-shelf ARM would create the same impact.
They're designing CPUs - something that many companies have done and many companies will do. Big whoop.
Both of IBM's current chip architectures, Z and POWER9, are indeed interesting.
Apple hasn't shipped their "desktop class" architecture yet.
Perhaps you are frustrated by the design constraints of low power mobile chips. Ok.
But if you're paying attention, architecture wise, it may be of interest to note that Apple's ARM chips, so far, have delivered good performance in their handheld applications by careful attention to sustained memory bandwidth. Competitors went with more CPU cores.
So there's some fun chip architecture to be had, even in 2020.
A desktop Apple architecture might use something like HBM for main memory, rather than DIMMs.
There's lots of room to innovate, out there in consumer computing.
Memory bandwidth is generally kind of needed to take advantage of more cores.
Last time I checked, Z had 500gb/sec; more than 10x Apple's. Kind of wish IBM had won processor wars. Generally speaking whenever I look at their mainframe doodads, then look at the hot garbage being slung over at Amazon or whatever FAANG shit hole, it makes me sad. The company with the best engineers is an also-ran that mostly sells consultant hours. Maybe they'll sell off the mainframe business independent of the rest of the horse shit and it will undergo a renaissance. Doubt it though.
IBM has been building chips since day one. I'd expect IBM to divest their mainframe business eventually. The distinction you are missing is that usually "finance-driven" companies don't usually decide to pour billions of dollars into bringing in an already outsourced component in house that they hardly have experience in.
Furthermore, I don't see IBM using the Z to "innovate" - They aren't pushing the mainframes to anyone other than people who are already buying mainframes.
>Z is a more interesting architecture by far than the turd Apple is shipping.
The Z, an architecture for people who are pretty much already buying mainframes, is more interesting than a desktop class chip with what will probably be a completely unmatched in performance/watt? I don't see how the Z is more interesting than a chip that is finally attempting to challenge the 30 year x86 dominance in desktop computing.
There's 2 trillion USD betting that you're wrong, and virtually zero betting that you're right (AAPL Short Percent of Float = 0.00% as per Nasdaq). Buy some puts and you'll make a killing.
Not sure why this is being downvoted, Apple’s hardware reliability has become horrible.
Every Apple device I’ve purchased in the past few years has suffered from a defect: AirPods Pro, iPhone X, 2019 MacBook Pro, iPad. And this doesn’t include Batterygate.
That's why. Even if they're lost some of their lustre (and, if we're being literal, could be "on it's way" in the sense that it was the most valuable company in the world and might've dropped a few percentage points).
Not only the past few years, heck, they launched a phone you couldn't hold properly and people lapped it up. That's not stopped their offerings not only being the best in their class, but often the only products of note (AirPods, iPads, Watch...).
Apple doesn't have to beat Apple. They just have to beat the best of the rest - and apart from perhaps Samsung and Huawei in phones, they're looking pretty peachy still.
Can you elaborate on that? I worked for IBM for a little more than a year and it was deeply disturbing, but I don't really understand what's happening under the hood.
Large companies allocate some percentage of their budget to "modernization" or "IT improvements" IBM tries to grab as much of that budget as possible and then to spend a little money as possible internally delivering results. So they end up selling "Watson AI" or implement a "24/7 Cyber Security Operation Center". They don't give a shit how useful or long term successful those products or services are. They only care about how big the contract is and how high their margins are on the contracts.
IBM stock is performing terribly compared to other technology companies from 15 years ago GOOG,AMZN,APPL.
They deliver a good story to other inefficient companies. Those companies can tell their board that the "new Watson AI will optimize their operations in Q4"
IBM's stock is down 30% since 2013 and is only up 10% from its post-dotcom crash 2000 number. They pay decent dividends so it's been an okay place to park some money, but it's the opposite of soaring.
There is a ton of inefficiencies in big businesses and governments and IBM and other service companies are preying on that. It's a viable business model, if a little scummy.
They bought the company I was working for. They turned everything upside down. Tried to force us to sign contrats that would make them the owner of our public contributions which lead to an outrage so they backed down. Later they did "patent minig" sessions where they tried to extract good ideas from people for free. They also shut down all projects and pushed their Watson shit on us. They didn't give a shit about company culture, and people in general so 90% of the employees who had even a tiny bit of ambition left for a startup that was created by people who left IBM after the acquisition.
That pretty much sums up my experience with IBM when they bought our company as well. I had a colleague who quit immediately finding out they bought us out because he had worked for them before. I gave them the benefit of the doubt but he was right and I left once they started to integrate us into the borg. Just about everyone ended up leaving not to long after either.
It is a financial engineering project. When you see it through that lens all of this makes much more sense.