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8/25/2011
05:04 PM
Thomas Claburn
Thomas Claburn
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Jobs's Legacy: 8 Reasons Apple Will Dominate The Decade

Apple has new leadership, but the company can be expected to continue on the path defined by its departing CEO.

Brand

In May, WPP's Millward Brown division rated Apple the world's most valuable brand, worth an estimated $153.3 billion. Apple has been one of the most admired companies for years, and its phenomenally loyal customer base is growing fast. Microsoft's absence in the tablet market had turned many Windows users into Apple fans. And the iPhone has done the same. As former PC heavyweights like HP flee the market, Apple's reputation is likely to only increase its gravitational pull.

Design

To mark the occasion of Jobs's departure as CEO, Google SVP Vic Gundotra recounted a phone call Jobs had made to him in 2008 to show the attention to detail that has become Apple's standard. Gundotra wrote that Jobs had an issue with the design of the Google logo as it appeared on the iPhone.

"I've been looking at the Google logo on the iPhone and I'm not happy with the icon," Jobs said, according to Gundotra. "The second O in Google doesn't have the right yellow gradient. It's just wrong and I'm going to have Greg fix it tomorrow. Is that okay with you?"

Plenty of companies sweat the details. But you'd be hard pressed to find a CEO with that kind of attention to detail and with a record that shows he's right more often than not.

Patents

Apple has over 11,000 patents. That's not a lot by the standards of IBM, which holds over 40,000 active patents worldwide. But its patents are focused and Apple has been using them successfully as a barrier to competition. Google is spending $12.5 billion to acquire some 24,000 pending and granted patents from Motorola Mobility, along with the rest of its business. With allies of convenience in Oracle and Microsoft, Apple is likely to succeed in making Android more expensive and less competitive than it would be were it unencumbered by licensing costs.

Tablets

In the tablet world, there's the iPad and not much else. HP's TouchPad went down in flames. Samsung's Galaxy Tab 10.1 has been blocked in Europe. Motorola's XOOM hasn't been moving particularly well and faces Apple litigation in Germany. IHS iSuppli estimates that Apple's iPad will account for 74% of the tablet market in 2011. Almost half the Fortune 500 companies are testing or deploying the iPad, said Apple CFO Peter Oppenheimer in July.

Retail

Apple's retail stores have been so successful that Microsoft decided it needed to have its own retail chain, despite the past poor performance of retail operations operated by Dell, Gateway (prior to Acer's acquisition), and consumer electronics chains. Apple stores bring new customers into the company's fold, often selling iPads to those who might otherwise have bought a new Windows PC. Apple reported in July that revenue from its retail operations reached $3.5 billion in its fiscal Q3, up from $2.6 billion in the same quarter last year. The company expects to open 40 new stores in fiscal 2011, most of them outside the U.S. Other sellers of consumer electronics just don't compare.

Apple does have its weaknesses: It doesn't yet get social computing, which leaves an opening for the Microsoft-Facebook alliance and Google+. Its advertising platform has not been widely embraced, raising the possibility that Google could beat Apple by making computing more or less free. And its focus on keeping people within the Apple ecosystem makes it vulnerable to innovations that promote connection across platforms and devices.

But against these theoretical risks, Apple has proven products that sell and should continue to do so as Steve Jobs takes less active role in management.

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