The Death of Apple

I'm a long haul Apple user. Not just iPhone. I'm talking about desktops and laptops. I've been a Mac guy for decades and for the most part, I've been very pleased. Overall, however, I grieve for a once great company.

One of the reasons I've always liked the Mac is that I seldom have had to rely on what Apple loosely terms "Customer Support." Originally, Apple Customer Service Representatives were highly motivated, knowledgeable, helpful and accessible. They could solve almost any problem by phone, cheerfully and authoritatively. For all I know, they may still be. But I don't know, because Apple does its best to shield customers from reaching them.

And that's where Apple's Great Decline begins, because customer service is where the first tiny corporate cracks appear.

In its revolutionary retail stores, Apple staffed it Genius Bars with kids who were anything but. Due to slave labor in China, most "repairs" became cheap enough to be "solved" by simple replacement. Nobody knew -- or had to know -- what went wrong with your machine, because Apple would have had to train people to know stuff like that. It was much more expedient and fiscally sensible to just grab a new widget off the shelf and be done with it. Any dummy can do that. And they did. Until Apple phased them out. Poof.

For a while, Apple system upgrades were generally worthwhile, too, with each new version offering simpler, improved systems that performed more tasks. For years, Apple and Mac really were brands that made creativity more achievable through technology.

Then Steve Jobs died and it all started sinking fast.

The first noticeable sign was Apple's name change from "Apple Computer" to "Apple, Inc.", signaling its expansion into ancillary endeavors like phones, movie studios and automobiles. As such, the Mac OS sacrificed making things for buying things. It didn't take too long for desktops and laptops to decay into larger, heavier versions of iPhones, whose systems predictably merged into platforms with the same looks and feel, dumbed down for people to whom "thinking different" is difficult, because simply thinking is out of their realm. They just want to buy things with a point and click.

These days, if you want to solve a problem, it's actually more difficult because Apple has buried everything under the hood, preventing users access to solving their issues on their own machines. Apple does its best to prevent you from calling them on the phone, suggesting instead that you "interact with others in "our Apple Support Communities" online. It's a great place, populated with more people with even more problems and almost no solutions. To make matters worse, if you utter anything that the lords of Apple find unfavorable, your comment is removed for "inappropriate content." Phrases as mild as "but nobody at Apple will respond" just burn up in the ethosphere, never to be seen again.

Currently, Apple is anything but its founder's vision of making life simpler, elegant and more powerful. It wasn't tough to see it coming. That's why I keep a machine with ancient system software on it: If I'd upgraded when dictated to do so, I would have lost access to thousands of dollars worth of software with which it was incompatible. Apple's whim would have forced me to buy new hardware and software. Completely unacceptable corporate hubris.

All of which is to say, unpopular as it may seem, that Apple's days are numbered. It's actually following the "three generations of wealth" axiom: The first generation creates it; the second generation spends it; the third generation loses it." If you disagree, just look at the history of General Motors, IBM, RCA and dozens of twentieth century brands that are either defunct or have disappeared. They were once the biggest companies in the world. Huge, hardy and undefeatable. Nobody ever expected their demise, either. That's because while fortunes are always won and lost, human nature remains constant.

In the end, incompetence and greed always destroy great societies and powerful brands from within. Apple has built its mammoth, circular offices in Silicon Valley as a monument to itself, never realizing that Egyptian pharaohs built their own mausoleums, too.

Apple + Beats = Not So Good

A lot of people enjoy a lot of different hobbies.  Some like to play tennis.  Others go fishing.  Some jump out of airplanes.  I am, to coin a phrase, a bit more down to earth.  One of my main sources of leisure time joy is exposing poseurs.  I can't help it.  It's a personality flaw that, by some stroke of luck, I've been able to turn into a career.

Being a branding guy, I meet a lot of people who give themselves away by immediately citing Apple as a premium example of "great branding."  I listen patiently and then, very carefully, explain to them why Apple is anything but a great brand.

Actually, it's a failing brand.

Make no mistake, Apple is a very successful brand.  They make a ton of money.  They can boast legions of rabid evangelists lining up at their retail stores to blindly purchase the latest versions of pointless technology.  I have no argument with that.  Hey, more power to them.  But that's not why I feel Apple's best days are behind them.  

If you've been reading this blog over the last few years, you know that I've been watching Apple arc from underdog to King of the Hill to Second Generation Brand Headed Into the Meat Grinder (you can read them all by searching this blog for article titles containing the word "Apple").  I've called out Apple for being more of a fashion brand than a legitimate brand, much more akin to Abercrombie & Fitch than Federal Express.  And now, with their acquisition of Beats, it seems they've sealed that fate.

Here's why:

1. Fashion brands get hot and die cold.  What was once hip, slick and rebellious is now mainstream.  When your grandmother has an iPhone, it just isn't as cool any more. You start looking for the Next Big Thing.

2.  There was a time where Apple users sniffed at PC users as Neanderthals handcuffed to Microsoft.  That was when Microsoft was the only other game in town.  Today, thanks to the proliferation of mobile devices, there are plenty of other platforms with lots more to offer than Apple.  Android, in particular, comes to mind, but there are lots more systems, with lots more apps from lots more brands.  The time has come where Apple users want to switch out but feel trapped by having invested so much into Apple's fortressed, domineering domain.

3.  If you add points #1 and #2, you get to point #3, where users find themselves waking from the dream and asking why they're paying premium prices for Apple devices and systems that may be as good, but not better than, its competitors.  That bell you hear is the death knell of fashion brands as the public realizes its overpaying for under-delivery.  

4.  Apple has migrated from a productivity platform to an entertainment platform.  This is serious.  Back when Apple took its productivity seriously, we'd hear all kinds of technical achievements over competitive platforms.  Macs would smack down IBM mainframes and leave PC-based systems in the dust with an elegant ease.  You don't hear those stories any more, because Apple's focus has, like so much of America, been dumbed down to cater to the self-interest of the average Joe, whose primary needs revolve around music, videos, social media and mostly other non-productive tasks.  When it comes to pandering to the public's narcissism, Apple is tough to beat.

5.  Apple has become a stagnant brand.  As I've written here previously, there are Three Generations of Wealth:  The first one earns it; the second one spends it; the third one loses it.  Now that Steve Jobs is essentially a long-forgotten ghost, Apple is a second generation brand that has abandoned its fundamental vision.   Its management mistakes driving revenue at any cost with the much more complex task of driving revenue while maintaining the brand integrity and leadership that brought it to prominence.   Tim Cook et al are simply grasping at the lowest hanging fruit in order to generate the easiest money they can find.  That's what Second Generation brands do.  It's also what drives them into the ground.  It's why once-great brands like Maytag (which no longer builds its own washing machines, but essentially licenses its brand name on inferior, outsourced products) has swan dived from its previous premium perch into the cesspool of also-rans.

Now we find that Apple, for the first time, is also violating one of its long-held tenets:  Retaining the Beats brand identity.  Whereas there was a time when every product (built or bought) become an Apple brand, this is no longer the case -- and it's very telling:  By retaining the Beats name, Apple admits its own brand is not as strong as, or quite possibly weaker than, Beats.  Which means that the cracks in the Apple armor are beginning to show.

But hey, don't take my word for it.  All you fanboys can keep believing, if you like.  There are still millions of Beatles fans who don't want to accept John Lennon's announcement of the band's demise.  Decades later, they still can't believe it.  But believe it you must:

"The dream is over." 

Apple: A Second Generation Brand

Now that the other shoe has dropped and Steve Jobs is gone, we can expect the predictable onslaught of media rehash and overhype regarding Apple, Steve Jobs, Tim Cook and the future of the world as we know it. I can't tell you how many times I've been asked about "Apple without Steve Jobs."

So for those who still wonder, here's what I expect is going to happen to Apple, now that Steve Jobs is gone:

First, before anyone gets too hard on Apple's management heirs, let me begin by reaffirming my position that Apple's brand jumped the shark way before Steve Jobs' demise. In fact, in 2010's Apple Jumps The Shark, I pointed out exactly why the bloom was off Apple's rose. The seeds for Apple's descent were sown into Apple's long range plans.

From a strictly branding point of view, for example, Apple's lack of stated brand strategy allowed it to become a fashion brand, in which its primary brand value relies on its coolness as defined by its user public. And the using public, as we all know, is very fickle when it comes to defining what's cool.

Simply put, the more people embracing the brand, the less cool it becomes. And if all you've got is cool, that means you're on the clock -- it's only a matter of time until you're no longer cool.

This is not to take away from Apple's wonderful technology and design and all that other stuff over which media pundits gush like pre-pubescent schoolgirls. Sure, I like that stuff, too. I'm a Mac guy. But from a brand perspective, there's trouble in paradise.

Second, with the passing of Steve Jobs, Apple now becomes a Second Generation brand, with a Caretaker Manager at its helm. As I've written here previously, brands often follow the same trajectory of the Three Generations of Wealth: The first generation (its founder) creates it; the second generation (his heirs) spends it; the third generation (his disconnected drone grandchildren) loses it. As pointed out in Apple Jumps The Shark, the brand had already lost its vision somewhere around the time when Jobs had begun transferring authority to Tim Cook, his heir to the throne.

Far from its original rebellious roots, the brand has become fortressed, secretive and severe to the point of bullying its competitors - along with its users - in the marketplace.

Apple's increased rate of required upgrades, dependency on proprietary services and, perhaps worst of all, nudging its hardware and software toward "cloud usage" all speak to a ruthless corporate soul revealed as the baton was being passed to new leadership.

And then there's Tim Cook. Poor Tim Cook.

His is not an easy task. Forever being compared to Jobs, he immediately took his first misstep by introducing the iPhone 4S in a presentation far too similar to Jobs' format. Had he been more brand-aware, he would have taken steps to ensure "there's a new sheriff in town" and created his own personal style rather than remain tentative for fear of rocking Apple's stock price. By taking the Caretaker Manager's road, Cook has ensured himself a place under the microscope, doomed to the same fate suffered by Microsoft's Steve Ballmer when he took the reins from Bill Gates. And the longer Tim Cook allows the media to define him as Steve Jobs' Caretaker Manager, the worse it will be for everyone involved.

Yes, Apple will survive. No, it will not be the same brand.

Steve is gone. Get over it.

Apple Jumps the Shark

If you're as antique as I am, you can measure a great deal of your life by phases in which the "demise of Apple Computers was assured." There was the Two-guys-in-a-garage phase. There was the Their-market-share-is-shrinking phase, followed by the John-Scully-In-Steve-Jobs-Out phase, which handed off new definitions of failure to the How-much-faster-can-Gil-Amelio-destroy-it phase. It got so bad that at one point, sitting in a meeting with Regis McKenna, a celebrated Silicon Valley public relations man, I listened to him tell of how he advised Steve Jobs to simply license the Apple logo instead of running a company.

Of course, that was in the early 1990's. A lot has changed since, and most to Apple's benefit. Apple stock is way up. Its success is astounding. New products and services have revolutionized entire industries. Even non-tech people know and use iPods, iPhones, iTunes and maybe even iPads, not to mention a whole line of Apple desktop and laptop computers.

It's been a great ride for Apple. The happy band of rebels that take pride in "Thinking Different" have achieved success in just about every arena they've entered. Not to be overlooked, every one of those victories came the added-but-rarely-verbalized pleasure of sticking it to Microsoft.

But now we come to the point where Apple may have jumped the shark.

Every upstart brand, from rock bands to retailers, goes through it: Beginning as an underdog, the little David takes on the well-entrenched Goliaths. The early adopters -- half out of pure contrarianism and half because they just want to be cool -- bless the new brand with eager acceptance. They evangelize the new brand while castigating the huge, old, evil ones. Within a short time, their followings swell, usually embraced by throngs of young kids whose own agenda of pubescent rebellion fits snugly into the brand's.

Riding the Culture of Cool, the brand gains critical mass and begins to attract the attention of market makers and venture funds, who stoke the financial coals into a real, fire-breathing revenue machine. As the brand gets bigger, it generates more influence. Sales skyrocket. The brand goes mainstream. Everyone is happy.

And then, something happens. Imperceptibly, at first. But it's there nonetheless.

One day, at corporate headquarters, memos begin appearing dictating the rules of corporate culture. Lawsuits begin emanating from the legal department, defensive at first, but very soon pre-emptive, as the brand stakes its claim on its entrepreneurial turf. The brand then begins to lose its sense of self, feeding on a generation of cultural inbreeding which gradually mutates from camaraderie into full-blown paranoia, if not downright xenophobia. In its final stages, megalomania sets in, with the brand completely intoxicated with its own sense of power, success -- and hubris.

It can happen to anyone -- especially those without a clear and concise brand strategy. It happened to Microsoft. It happened to Yahoo. It's happened to Google. And if you watch carefully, you can see it happening to Apple.

You think Apple has a successful brand? You're right. You think Apple has a good brand? You're wrong. To this day, Apple has no articulation of their brand strategy. Yes, they're stock is at an all-time high. But gone are the days of the happy band of rebels. These days, Apple -- the brand associated with creativity and freedom -- arbitrarily decides which of its iPhone apps are morally offensive or inappropriate. Its mind set has become one of a fortressed company.

Think I'm wrong? Does the name Michael Jackson ring a bell?

To be sure, Apple's brand is not going away any time soon. To be just as sure, Apple's brand has jumped the shark, It's only a matter of time until the next David loads his slingshot.

Apple Dumps the Smarmy Guy

You have to hand it to Apple. Most of the time, they do things right. But when they do things wrong, they admit it and mop up their mess. This time, they finally realized their misstep with their "Apple Guy versus PC Guy" campaign, the result of an ad agency gone out of control.

If you haven't seen the campaign, it pits an ad agency's idea of a "cool guy" against a bloated, Bill Gates-inspired buffoon in a variety of head-to-head performance situations. Predictably, the PC guy falls all over himself, while the Mac guy smugly savors his little victories.

I'm sure all kinds of empty-headed, iPod-toting Mac-addicts got a cheap thrill out of the public drubbing of PC's. Unfortunately, this bit of self-involved idolatry landed Apple where they least expected to be:

In the Bad Guy seat.

Yup, the numbers are in and it seems the campaign actually did more to alienate people from Mac and actually - get this - make them feel sorry for the poor PC schlub. It's no wonder, because this is typical of out-of-touch agencies and their continued disservice to their clients.

Apple's brand strategy, while never really being articulated, has always revolved around its users' refusal to be lumped in with the Lowest Common Denominator. In the beginning, Apples were the "computers for the rest of us." A few years ago, that strategy was extended by celebrating the virtues of "thinking different."

Nice. Dead on. Good messaging, because that's how Mac users perceive themselves. They not only see themselves as being the underdogs with a secret, they actually take pride in it. This, in a nutshell, is one reason why Apple is the brand that refuses to die.

Now they bring along a campaign that's 180 degrees opposite from that brand strategy. In that cheap-shot kind of easy pickin's style that only the smarmiest, Bill Mahr fans think is amusing, Apple's ad agency decided that maybe Apple could appeal to the Lowest Common Denominator. They decided that faux cool was enough to gain public acceptance.

What they got was a failed ad campaign, right in their face. Now the Apple Guy is getting dumped. Hopefully, so will Apple's ad agency.

Apple and Nike's Happy Shoes

For some reason, the world's attention never seems to focus on the really important stuff. A little while back, for example, the Los Angeles Times carried an article in which a particular breed of lab mouse was shown to possess a gene that literally destroyed cancer cells. Apparently, these mice treated cancer just like any other kind of infection, surrounding the foreign intruder, killing it and disposing of it. All without any side effects whatsoever.

To make things more impressive, the gene could be transplanted into other mice with the very same (and permanent result). The implications of this discovery are immense. What research scientists have stumbled upon may, quite soon, prove to be the magic bullet sought by humans to kill off cancer with no toxic side effects.

That's incredible news, I grant you. Which is why the Los Angeles Times managed to bury it, ranking its importance somewhat below that of Brad Pitt and Angelina Jolie's new baby and whether Jennifer Aniston's gig with Vince Vaughn is for real.

Celebrity marriages, it turns out, are what makes big news these days, which is why the folks at Apple and Nike have announced their betrothal with a little gizmo that I like to call the Happy Shoe. You link your running shoes to an iPod, and you get music, time data, running data and from what I hear, even a synthesized vocal running coach egging you along as you jog.

Truly another example of digital technology at its most useless, but that's another story. My main reason for bringing all this up is that a lot of media pundits are going to call this a "marriage of two strong brands," which is what this story really is:

Just another Hollywood marriage. And not of two strong brands. It's one really strong brand and one really not strong brand.

For years, I've been informing audiences that while it is a high-awareness brand, Nike is not a truly strong brand. Despite a fashion/celebrity-endorsement agenda, fueled by multi-million dollars' worth of media, you still can't find anyone out there who can tell you why Nike is the only shoe for them. Since branding is all about being "the only solution," this means Nike is typical of so many brands: high awareness, with no message.

This doesn't mean the folks at Nike are dopes. Far from it. Because the first thing that brand-vacant companies do to gain traction in the marketplace is rub up against people, places and things that DO have real brand resonance, or at the very least, some sort of loyalty in the market. Nike tends to buy as many celebrities as it can. In this case, it's hoping that Apple's success will rub off on its shoes.

Think of it this way: who was Tom Arnold before he married Roseanne? Just another guy. Now Tom Arnold has a career! Who was Hillary Clinton before she married Bill? Now she's a senator from New York! Whether you believe in these brands or not isn't the point. The point is just like your mother told you: if you're going to get married, marry up. Nike is smart enough to realize that. You'll notice that they didn't do this deal with Dell or Microsoft. They chose Apple.

Remember Apple? The company whose machines are "too expensive?" The company whose machines "don't have enough software?" The company that "only has 5% market share?" Why would Nike choose to marry Apple? Here's why:

Because neither Dell, nor Microsoft, nor Nike are true, real brands. And because Apple is. And that's the reason why Nike's Happy Shoes have hooked up with Apple. It's the brand that refuses to die. The brand whose users KNOW why it's the only solution for them. Just try to persuade a Mac user to convert to PC and see for yourself.

As the world becomes more cluttered with pseudo-brands like Nike, Microsoft and the like, true brands like Apple only grow stronger. As in Nike's case, all Apple had to do is lead the way.

And watch as Nike came running.

A Sour Apple Note

Yesterday I got a call from the San Jose Mercury News, which if you
don't know, is the daily newspaper that serves the Silicon Valley.
While the paper does what almost every paper does regarding news,
weather and sports, the Mercury News devotes a considerable amount of
ink to high tech related stuff.

This is the week that reporters wanted to know about Apple's latest
"coup", signing on Bono and U2 to help them hawk Apple iPods. And of
course, everyone asked about it was quick to toady up to Steve Jobs
and kiss his golden keister. Well, almost everyone.

Although I'm sure that others will speak to it differently, I'm
willing to go on record and tell you that the current campaign is a
mistake in the long run. And I'm not just saying that because I find
Bono to be among the most obnoxious musical personalities since
Barbara Streisand. I can forgive the stupid eyewear and the inflated
sense of self-importance. I can even overlook the fact that, like
Streisand, he can't seem to get through a song without yelling. What
I can't forgive is how his presence demeans the Apple brand by
treating it as a fashion statement.

There's no question that the iPod has had a great halo effect on
Apple a a whole. A substantial portion of Apple's revenues are
derived from iPods. You know it's a runaway hit when the likes of
Hewlett-Packard license it for their own. But hand-cuffing an entire
brand to the leather belt loops of a musical celebrity is playing
with fire, for a bunch of reasons.

First, whenever your brand panders to fashion/trendies out there,
your brand itself is in danger of becoming a fashion statement. And
if you know anything about fashion, you know that what's in this year
is out the next. Or, in the immortal words of Jerry Reed, "when
you're hot, you're hot; when you're not, you're not." How long until
the iPod is junked for something trendier?

Second, while iPod's halo effect has brought in a significant number
of Mac converts, this move places way too much emphasis on music and
will probably hurt the overall brand as a productivity tool.

Look, I'm a Mac guy myself, but I've got to call 'em like I see 'em.
I've suffered the slings and arrows of all those other Gates-driven
PC cranks who continually sneer at the fact that I require no virus
protection programs. I suffer through their mockeries as they claim
"there's no software for the Mac" (there is - tons of it). Or that
Macs are too expensive (not true, especially if you add in how often
PC users have to add on to stuff built in to Macs). So the last
thing I need is for Steve Jobs to wheel out an aging, over-rated,
pony-tailed knucklehead wailing some anthem about how cool iPods are.

What Jobs has overlooked is that the Mac is already the cool of
computers. It always has been. Up until now, it's been cool
precisely because it's been able to outperform its competition where
it matters most: in computing. In fact, one could argue that by
over-emphasizing music, Apple is actually risking the perception that
its capabilities are becoming limited, when just the opposite is true.

Time will tell whether Bono will add any more value to the Apple
brand. Personally, I don't think it's quite the boon that all the
media lemmings think it is. As far as I'm concerned, there's only
one thing Apple could add to increase their sales now.

A pair of really sturdy ear plugs.

Apple's Siri Sucks Your Soul

Nothing feels quite as good as vindication, especially when hordes of sycophants hurl invectives at a guy who's simply telling the truth.  I have to admit, I get more than my share of verbal stones thrown my way.  For example, I've never won any popularity contests for my perennial dismissal of Facebook as nothing more than a highly-charged novelty, played by venture capitalists as a "pump and dump" scheme on all same suckers who bought into Groupon.  For me, it was hard to contain my glee as the world witnessed Facebook's initial public offering (IPO) sink slowly into the muck.  And while I continue to believe Facebook will follow AOL's graceful arc into the meatgrinder, that's not why I'm writing today.

In case you haven't noticed, we live in a world obsessed with media.  "Tell a lie often enough," the professional Nazi machine professed, "and people believe it to be true."  These days, the media is possessed by a wild drive to be hip, cool and at the front of the line for every new fad and fashion, no matter the actual value of the fad or the toxicity of the fashion.

Take Apple, for example.  Yes, that Apple.  The one all your fanboys gush over like blushing schoolgirls.  The one with billions in the bank but only recently with which decided to trickle dividends to shareholders.

I should tell you right here and now that I've been a Mac guy forever. I can also tell you that I won't be a Mac guy forever.  Well, I'll keep using the stuff I have, but I certainly won't get sucked into anything past operating system 10.6.8.  Because after that, it's not about Apple taking your business.

It's about Apple taking your soul.

That's right, while you -- and the rest of the world -- are asleep at the switch, you're ignoring how Apple is deconstructing your humanity, bit by bit, under the guise of media techno-hype.  And if you doubt that at all, take thirty seconds to view this latest charmer from our friends in Cupertino and see if you can spot the fatal flaw:

There you have John Malkovich talking to his iPhone, which isn't all that strange.  But what you may not have noticed is that Malkovich is all by himself.  The machine -- in this case, Apple's Siri -- is the only interaction in his sparse, cold, lonely world.  The man is holding a conversation with a chip set, and convincing himself it's a rewarding experience.  And lest you dismiss this as some kind of anomaly, let me assure you it isn't.  In fact, this is just the tip of the iceberg in the path of humanity's social Titanic:

Increasingly, people are confounded by true social interaction.  They don't know what to say, when to say it or even to whom to say it.  You can yack about illegal immigration all you want, artificial intelligence is literally the job killer.  The media may be selling it as fabulous technology, but the truth is that Apple and its ilk are sucking the humanity out of your soul.  Painlessly, conveniently crippling our society while increasing its dependence on their technologies.

Sure, I sound like your grandpa in his rocker on the porch, but believe me, there was a time when "boy meets girl" happened "the old fashioned way," where someone asked someone else for directions.  Or ran into a shopper at the store.  Or even rode to the eleventh floor with you on her way to the fifteenth.

Now all that romance, all those random chances are vanishing with a simple point and click.

The other day, someone asked me why I wear an analog wristwatch.  After all, you can just pull out your cell phone to see what time it is.  I told them I refused to be tied to an electronic leash.  It's not about knowing the time any more.  It's about asserting your humanity.  Actually, it's about preserving your humanity before the next generation wonders what it was.

Next time you're tempted to ask Siri a question, ask yourself this:  What color are her eyes? 

J.C. Penney Circles the Drain

Every once in a while, a reporter calls me up and -- more often than not -- succeeds in at baiting me into a rant about a popular brand in play.  God only knows how many Great American Brands have suffered on Death Row at the hands of incompetent management -- Kodak, Maytag, Woolworth, Sears are just a few of the more notable casualities. 

And then there's J.C. Penney.

Years from now, JCP will likely be the textbook case illustrating how clueless corporate boards can be about the businesses they've acquired.  In the case of JCP, the naiveté and outright ignorance is nothing short of astounding.  If you don't know the story, the abridged version goes something like this:

J.C. Penney's board was essentially taken over by outside financial investors, who weren't at all pleased with its financial performance.  In their eyes, despite J.C. Penney being a long-standing staple of generations of Americans, the entity as a whole was an under-performing asset.  Ostensibly, this was the main reason for the financiers to wrest control of the board:  After seizing control, they'd install new management and show everyone exactly how it's done.

So the old managements got the boot.  The board hand-picked its new CEO, Ron Johnson, for one reason alone:  he was the guy responsible for designing Apple's retail stores.  Keep in mind that at the time of his appointment, Apple stock was soaring on a weekly basis, the digital darling that weaker minds perceived as proof that "you can succeed in a recession if you know what you're doing."

Clearly, that wasn't the case with this decision.

While Johnson certainly has talent and success with Apple (and retail clients prior to that stint), the board became so blinded by Apple pixie dust that it neglected to notice Johnson had absolutely no experience or talent in branding or operations.  They simply expected him to wave his Jobs-like wand over their operations and wake the next morning to find Americans embracing J.C. Penney as the "Apple of household retail."

Johnson was given a carte blanche to do whatever he wished, beginning with his forté -- redesigning floor space.  In an unbelievable escapade of sheer hubris, Johnson went to the full court press and re-designed every store in the chain without ever testing the concept on a limited basis.  That was Mistake #1, because in short order, consumers proved worse than indifferent -- they hated the new environment because it wasn't the J.C. Penney they knew and loved.  They could sense this was Mr. Hollywood consdescending to Middle America -- and they didn't like it one bit.  A failure that could have been less public and less traumatic actually failed large scale -- and very publicly.

Mistake #2 was Johnson underestimating the slow, grinding pace of brick-and-mortar retail.  JCP wasn't iTunes and it wasn't Apple.  J.C. Penney is as old as retail gets in America.  Things happen over time, often at a glacial pace.  Once again, the Apple pixie dust proved illusory.

Mistake #3 -- the most important one -- is the Johnson never understood brand strategy.  He never took the time to understand JCP's brand, nor did he have the skills to create and implement any changes to it.  Let's face it: if you don't understand how a car works, you're really in no position to dictate how to repair it.  Johnson rode his successes based on his design skills.  Getting its staff and its public to understand why J.C. Penney should be perceived as the only solution was far afield of his abilities.

Ron Johnson lasted a total of 17 months at J.C. Penney.  The board replaced him with the very same managers they'd booted to bring in Johnson.  But the story doesn't end there, either.

Recently, JCP launched a mea culpa ad campaign, essentially apologizing to the American public for being as stupid as they'd been.   Proving they're still as stupid as they'd been, they published a report in the Wall Street Journal of "research" claiming that JCP's efforts to improve its brand was working .

Surveys?  Really?  I don't think so.  The only surveys that count are those that ring the cash register, and that won't be happening at JCP any time soon.  Surveys are what inept corporate spin doctors wheel out to cover their own inability to get things done.

In the corporate world especially, this is what happens when decisions are overly reliant on data rather than smart, strategic judgment.  Generate enough statistical garbage and the decision-makers can avoid accountability because they can always blame the data.

J.C.Penney is hosed until they articulate a clear brand strategy and execute it smartly.  That doesn't happen with thirty second band aids proclaiming how stupid you've been.  It does, however, do a good job of proving just the opposite.

Apple, Privacy & Fools

I've written a lot of blog posts, and believe me, not all of them were tremendously popular.  As soon as I've expressed my usual, iconoclastic views, those whose tolerance runs at lower levels either unsubscribe or write hate letters.  I'm okay with both.  It's the ones who have no opinion I lament the most.

This is one of those posts. I'll probably tick some people off, but if you can stand the rationality, I'd advise your sticking with it, at least to the end of this piece. Then, if you really think I'm out of line, well, I'll see you around.

In the meantime, what I have to tell you may come as a shock, especially if you're the type who gets his news and information from social media like Faceboook and Twitter.  It only gets worse if you only watch lopsided "news" shows on FOX or MSNBC without balancing them off each other.  If you're an American, this may bother you; if you're a young American, this will blow your mind.

As you probably know by now, in 2015, a couple of radical muslim terrorists decided to kill off 14 or 15 of their co-workers in the offices they shared together for five years in San Bernardino, California.  There's no question that the married couple were guilty.  Plenty of eyewitnesses and victims can attest to that.  The couple can't weigh in, because they were killed by a volley of police bullets when they refused to be taken peaceably. 

Along with an infant child, the couple left all kinds of compelling evidence, including their now famous iPhone, whose contents at the time of this writing remain encrypted by Apple's wundertechnology.  The FBI wants Apple's help in decrypting the contents of the phone.  Apple is steadfastly refusing, citing the dangerous precedent of "unlocking one person's phone means unlocking everyone's phone."   Within moments of Tim Cook's announcements, thousands of Apple fanboys rallied to Apple's defense, citing their own right to privacy.  For a minute, that seemed to make a lot of sense, until one realizes a very compelling, sobering fact:

In America, there is no such thing as a right to privacy.

Forget about whether you think Apple is aiding and abetting known terrorists.  Put aside the fact that an iPhone is no different than a file cabinet or a safe deposit box.  For the moment, think about the Constitution of the United States and how nowhere in that document is there anything even remotely close to a citizen's right to privacy.  Nothing. 

What you will find in the Constitution is the prohibition of unreasonable search and seizure.  But if you read that carefully, that doesn't mean the government can't search you or seize your possessions.  It means that it can't be unreasonable about the searches and the seizures.  That's it.  So you have to ask yourself this question:  How unreasonable is it to search the contents of a proven, guilty, dead terrorist/criminal? 

There's a reason the Founding Fathers wrote it the way they did:  The Constitution was adopted when the nation was still young and very vulnerable.  The government needed a balance between personal liberty and attacks on those liberties from within -- very much the same situation we now face with "moles" planted by radical muslim terorists.  However, even the pursuit of those terrorists is accorded the concept of reasonableness.  That's why prior to the cops raiding your residence, they have to find a judge who will sign a search warrant.  The Feds and police can't just barge in and take what they please.  The judge has to sign a warrant attesting to the fact that the search is reasonable and not arbitrary or illegal.

There's nothing in that warrant, by the way, that mentions anything about privacy, because privacy is not a right.

There's a lot of editorial out there bemoaning the entitlement of the younger generation.  One needs only acknowledge the candidacy of Bernie Sanders to see proof of that.  Another aspect of the Sanders campaign is its reliance on a lack of education, especially the way it fuses its advocates' wants and needs into a standard of rights.  But they're not rights.  They're wishes of people who have no education or knowledge about the Constitution. 

And while they may wish privacy were a right, it isn't.  It never has been.

I'm sadly bemused by the temerity of an armchair billionaire like Tim Cook, who prances about, merrily posing as the protector of free speech and privacy, when in fact he's doing nothing more than spinning a danger to the Republic for his own marketing purposes.  There was a time when this country valued its collective responsibility to safeguard its citizens.  We looked after each other because we wanted to, not because we were told to.  Those days, apparently, are over.

Today, it seems perfectly fine to send a soldier to his death to protect your freedom.  What you can't do is crack open a terrorist's iPhone, because, you know, that would infringe on a right that nobody in America ever had to begin with.

Microsoft launches Seinfeld Bomb

There are times when life is unfair. And then there are times when life is juicy and rewarding. The unfair times are when seemingly stupid hot chicks make tons of money for nothing other than looking hot and being stupid.

But then there are the rewarding times. Like when a huge, rich corporation thinks it can buy its way into the hearts and minds of the public, simply because it happens to be huge and rich. Such is the case of Microsoft having announced its paying once-hip-now-just-wealthy-through-television-syndication comedian Jerry Seinfeld something like $10 million to pitch its bloatware.

Talk about the other guy blinking. Clearly Microsoft is more than a little irked at Apple's ability to claw its way back into the market. Where the Gates gang once boasted of Apple's continually dwindling market share, it now seems that Jobs and company have managed to steadily increase their share of market. In fact, some reports have Apple's MacBook laptops as the first choice of students throughout the United States.

Whether Apple's success is due to their iPod, MacBooks, AirPorts, iTunes or any one of their other revolutionary and elegant technological solutions is up for debate. One thing for sure: Apple's smarmy "Mac versus PC" television spots have connected with its audience -- and seemingly, with Microsoft's lower jaw. Years of ribbing have finally baited Microsoft into an "I'm hipper than you" war, with someone, somewhere, so totally clueless as to think that Jerry Seinfeld is the right man for the job.

Jerry Seinfeld? Excuse me, but aren't we just a few decades late on that call?



This is the exact reason I counsel clients to avoid celebrities like the plague. Forget the fact that a perennial prop on the Seinfeld show was a Macintosh (it was always on the desk against the wall of his apartment) or that hardcore fans can list the episodes which featured Apple's 20th Anniversay Mac. We're talking about a formerly single guy whose wit and charm has been largely replaced by jowls and cigars. The man has been a veritable ghost since the last, desperate season of his sitcom. But Microsoft thinks he can turn things around and make its brand hip, cool and relevant.

Let me go out on a limb here and make a prediction: This campaign is not going to make Microsoft relevant. This campaign is going to be the biggest bomb since Hiroshima.

Think I'm kidding? Okay, which does your kid prefer, an iPod or a Microsoft Zune? Uh huh. That's what I thought.

The fact is that no cheap campaign is going to change Mircosoft's brand image, because Microsoft has no brand strategy -- and never has. But Microsoft does have money. And influence. And the one thing that goes with both of those: A keen sense of denial.

How J.C. Penney Predicted Trump's Win

By now you must have heard that yet another all-American brand is circling the drain.  Yes, it's true: Sears has declared bankruptcy.  This comes as absolutely no surprise to those of us who watched how, since the late 1980s, Sears' CEO, Ed Lampert -- a financial guy, not a retail guy -- abandoned Sears' retail efforts in favor of "unlocking shareholder value."  Like so many corporate raiders of his time, that meant plundering assets and selling them off for cash.  In Sears' case, that meant selling/developing/inflating real estate parcels that were valued on the books at 1920s prices, and spinning off solid gold brands like Craftsman and DieHard.

A sad story, but a predictable one.  With Lampert at the helm, there was never any doubt that Sears was headed for the meat grinder.  But if you'd been watching retail over the years, a far more subtle-yet-telling story was developing across the street at Sears' still-breathing-but-just-barely competitor, J.C. Penney.

Unlike Sears, the board at J.C. Penney has always been about retail.  As a staunch all-American brand, its presence has been ubiquitous around the United States for as long as any other, outliving most of them due to its unwavering allegiance to its core retail brand values.

At least until 2011.  That's the year things got very interesting for J.C. Penney -- and those who watch it.

If you'd been paying attention in 2011, you'd have seen that the name on everyone's lips at the time was Apple.  Despite Steve Jobs' death, the company was roaring ahead, turning everything it touched into gold.  The country was in the midst of the Great Recession, but Apple was thriving.  "If only we could get an Apple guy aboard," dreamed most corporate directors, "....maybe we could be the Apple of low tech retail."

And so it happened that (according to Wikipedia)  "in June, 2011, J.C. Penney announced that Ron Johnson, who had led Apple retail stores in a period of high growth, became the company's new CEO."  J.C. Penney's board of directors fastened their seat belts as Johnson, fresh in from the coast, dive-bombed the midwest with his magic wand in hand, and instantly began to change everything about J.C. Penney:  its merchandising, its layouts, its operations, its stores, its people, its culture -- you name it.

Everything happened with lightning speed, which unfortunately, included a perfectly executed stock price swan dive.

That's right.  JCP stock dropped like a rock, from the high 20s to about $4 a share and stayed there, mainly on the disastrous losses suffered by Johnson and his Apple-flavored nightmare.  After huge layoffs and losses, Johnson was forcefully invited to leave J.C. Penney -- forever.  As of October, 2018, JCP stock shares are keeping their noses just above delisting at $1.52.

Not pretty.

But look deeper into that chart and you'll see something that only true branding guys seem to be able to discern.  In this case, it was J.C. Penney customers voicing their dislike for all the Johnsonian New Age/Millennial changes being forced on them.  They didn't like their old brand being taken from them, and they let J.C. Penney know it, the best way they could:  With their wallets.

It wasn't the rejection of the brand that hit me as much as how sustained it was.  This was no blip on the radar.  This was not an anomaly.  Something was up with Middle America.  They were angry.  They were fed up.  And their entire story added chapter after chapter on one simple stock chart.  To them, J.C. Penney's abandonment of its American heritage and tradition was one last betrayal they were no longer willing to tolerate.

They didn't yell.  They didn't protest.  They simply -- and very quietly -- took their business elsewhere.

They did the same with their politics.  Which is why in 2015, it was not terribly difficult to imagine that the next President of the United States would not -- and could not -- be the Ron Johnson of politics.  It was going to be someone who was true to the traditional American brand.

And that's exactly how it turned out.

Customers are voters.  Voters are customers.  Every once in a while, you have to stop selling them what you've got and start listening to what they want.  You've always got to watch them -- especially as they're headed out the door.

Dell & Jobs Prove Caretakers Can't Manage

Well, now you've seen it two times. Two technology companies, each inspired by the vision of their founders, growing at spectacular rates and changing the nature of their markets. The first time, it was Steve Jobs (and Steve Wozniak) with Apple Computer. The second time, it was Michael Dell with Dell Computer.

In both cases, these visionaries imagined a different, better way of doing things. With its ease of use and simple interface, Apple was the "computer for the rest of us." With its direct marketing and customer service, Dell revolutionized the PC space. Jobs saw things differently. So did Dell.

The markets rewarded each handsomely. Both became zillionaires and the darlings of their respective operating systems. Magazines featured them in cover stories and investors cheered them for growing their portfolios.

And then, the inevitable happened: Both Dell and Jobs left their companies for others to manage. In Jobs' case, the parting wasn't all that friendly. A long line of Caretaker Managers - people who have no clue as to what brand value or strategy truly is - attempted to drive the company forward. They almost drove it into its grave.

Caretaker Managers, for those of you unfamiliar with the term, are CEO's with three year contracts who stay on the job just long enough to collect their bonuses at the expense of the companies that hire them. They typically have no brand sense or vision. They usually "restore the company to profitability" by cutting costs, rather than increasing revenue. After the first year of cost cuts, profitability does reappear, but revenues drop, as well. By the second year, the cuts dramatically affect the company's ability to perform, which is no longer of any consequence to the Caretaker Manager, because his contract is about to end and his executive recruiter already has another corporate victim lined up.

John Sculley, Michael Spindler, Gil Amelio and the rest of their crew who knew nothing about Apple's true core brand ethic, strove to drive their traditional, square-peg strategies into Apple's round holes. With each offensive, each Caretaker Manager's tactics only made things worse. Pundits predicted the imminent demise of Apple on a weekly basis. It only got better when Apple finally woke up, kicked out the Caretakers and brought Jobs back in.

Now the same thing is happening to Dell. Once the pride of the direct marketing model, Dell's famous, fabulous customer service - the very quality that distinguished it from the rest of the pack - had fallen victim to the same kind of cost-cutting insanity that plagues most Caretaker Managers. Dell became a shadow of its former self, prompting the board to dump its current Caretaker CEO, Kevin Rollins, whose accomplishments, according to the AFP, included the following:

"In the nearly three years that Rollins headed the Texas-based firm, it lost its dominant position in computer sales to California-based rival Hewlett-Packard and came under scrutiny for questionable accounting practices."

Three years. That's how long it took Rollins to undo 20 years of Michael Dell's success. Which is the reason why the Board decided to call Michael Dell back into resume his post as CEO.

Seeing a pattern here? Look around the place, and you'll see a disturbingly similar trend of high-paid mediocrity running rampant throughout American industry, the only country in the world where a failure the likes of Robert Nardelli can take home $250 million bucks for actually failing to do his job.

Throughout Washington D.C., we hear about how illegal immigration and terrorism will destroy our economy and our way of life. We hear about how sex and drugs and rock and roll are eating away at our national morals. Hardly. If you really want to see how the country is rotting from the inside out, you have to start at the top. The Caretaker Managers are running amok.

And their Threat Level to the country is a bright neon red.

Why Technology Never Trumps Humans

It seemed like a good idea: Build a fun, flirty iPhone app that generates millions of custom pick-up lines on the fly, simply by tapping in specifics of a situation:
A user enters the place, time of day and characteristics of his intended date, hits a button and chooses a line ranging from clever to clumsy. And just to keep things under control, we allowed the user to choose between lines that are either Safe or Sexy. The app is called LittleWingman and it tested through the roof.
It's an equal-opportunity application, generating pick-up lines regardless of gender or orientation, which means it spews out lines for men to women, women to men, men to men and women to women -- all on the fly. And because it contains no graphics, no profanity and no abusive language of any kind, we knew it was a cinch to gain approval from Apple's iTunes Store.
And it did. Eventually.
Nine gruelling months after it was originally submitted.
Why was LittleWingman constantly rejected? As it turns out, not for any specific objectionable words or graphics -- it doesn't have any.  In fact, may be the first and only app ever rejected purely for the sexual ideas it stimulates in users' minds.
Are phrases like "tight-fitting jeans" and "legs" objectionable? Not to most people. But when LittleWingman composed them into the following line, iTunes had a big problem with it:
"I'm tonight's official legs inspector. I'm going to have to ask you to remove those tight-fitting jeans."
At first, we thought iTunes objected to words like "breasts" and "ass" -- two commonly used words in many other apps. So we replaced those with "casabas" and "tush," only to be rejected again. Within a week or two, the same canned message came back with the same canned rejection:

At 5:51 PM -0800 3/5/09, devprograms@apple.com wrote: Thank you for submitting LittleWingman to the App Store. We've reviewed LittleWingman again and determined that we still cannot post this version of your iPhone application to the App Store because it contains inappropriate sexual content and is in violation of Section 3.3.12 from the iPhone SDK Agreement which states: "Applications must not contain any obscene, pornographic, offensive or defamatory content or materials of any kind (text, graphics, images, photographs, etc.), or other content or materials that in Apple's reasonable judgement may be found objectionable by iPhone or iPod touch users." If you believe that you can make the necessary changes so that LittleWingman does not violate the iPhone SDK Agreement we encourage you to do so and resubmit it for review.

We combed through the content again, looking for any profanity or objectionable content. But we couldn't find any, because there wasn't any.  It was the application that was writing the content by itself, based on what the user had chosen. For example, LittleWingman generated this line for user who finds herself at a wedding: 
"Think any of the rabbis at this ceremony can lend us some personal lubricants?"
Random? Funny? Hardly objectionable as a flushing toilet, upskirt shots or jiggling breasts you'll find in other iPhone applications, yet iTunes rejected that generated line flat out.
The correspondence flew back and forth, with LittleWingman getting rejected for combining innocent phrases like "kiss" with innocent body parts like "lips" into pick-up lines that resulted wonderfully appealing ideas as to what things people might actually kiss with their lips.
Each time, the App Store returned the same canned response, with no guidance as to fixing the problem, mainly because there was no problem there to fix. Unlike the now-banned "baby shaker" app, LittleWingman was pure, positive pick-up lines -- and healthy ones, at that.
At six months, we thought we had a breakthrough: iPhone 3.0's 17+ adult rating was just the ticket to get us past our non-existent objectionable content. We re-submitted. And got rejected. Again.
The maddening, automated responses were finally disrupted when, after seven months, a real, breathing App Store human being actually left a voicemail at our offices. We began the dialogue which, two months later, resulted in LittleWingman -- with only the two word changes from its original submission. And that, as it turns out, is the main problem with technology: it lacks human judgment, which cost us time, energy -- and nine months' of sales.

The Digital Drop Piece

You don't have to be a Law & Order fan to know what a drop piece is.  It's a fixture in just about every police detective story ever told.  But in case you've been a literary Rip Van Winkle, I'll remind you that a drop piece is a small, unregistered hand gun that police detectives usually carry attached to their ankles.   Its serial numbers have been filed off to make it untraceable, and it remains hidden under the pants leg until it needs to be used.

The gun is not there for self-defense or predatory purpose. In fact, while it is loaded with live ammunition, the gun is rarely, if ever, fired.  That's because the sole purpose of a drop piece is to plant evidence on a perpetrator at the scene of a crime.  In case a bust becomes questionable or lacks evidence, a detective can claim that "this small, illegal handgun was found at the scene," which would ostensibly escalate the event into one of life-threatening circumstance, justifying the cop's next-level behaviors.

The fraudulent use of drop pieces are, in every way, completely illegal, providing false evidence which at trial, is tantamount to perjured testimony.

And yet, drop pieces have been used plenty of times, unquestioned against the word of law enforcement and context of circumstances.  After all, it's far easier for juries and judges to believe the bad guy had a gun than it is for them to accuse the police of framing an innocent citizen. If you happen to be arrested by mistake, this forms the perfect storm for a mistaken conviction.

Enter Tim Cook, the CEO of Apple.

In case you haven't heard, Apple now intends to scan every single image on every single iPhone for "images of child pornography" or those which they suspect could be such.  If that doesn't scare you, it should, for a few reasons:

First, it completes big tech's intrusion into, and the total destruction of, any illusions of privacy you may have had about your digital data. While we all know that big tech has been sharing our sales and contact information for decades, this completes the loop to include visual data.

Second, it assigns Apple and others the dubious task of determining what is objectionable and who should be reported to authorities. Since there is no discernible standard against which these images are judged, the exact same image could be viewed as innocent for one person but criminally suspect for another. The entire program is arbitrary at least, capricious at best.

Third, these scans can and will be used as digital drop pieces, where "undesirables" (as arbitrarily defined by big tech) can and will suddenly be found in possession of said images, prompting reports to authorities and subsequent prosecution, opening a whole new world of political harassment and persecution to those that big tech simply doesn't like.

Think it can't happen to you?  Think again: Do you know anyone whose credit card hasn't been compromised?  How many have been the victim of a persistent wrong number or something as harmless as a misdirected e-mail or spam?  The FBI already has huge arsenals of digital weaponry, listening, watching everyone from muslim terrorists to anti-vaccine activists to take one wrong step.

Now think about big tech generating its own political enemies list matched up to its image scanning weapon and the picture for you -- even unscanned -- gets pretty ugly.

Be careful out there.

The Tech Meltdown

Not everyone agrees with what I write here. In fact, whenever I opine about things, most of the reactions are of the pooh-pooh variety, pummeling me with posts about how far off the mark I am. I know I see things playing out politically, socially or economically, but that's because I view them through a different lens. Every once in a while, though, some of my most fervent critics will return to admit my analysis was correct, albeit a tad premature.

This may be one of those times. So tighten your chinstrap. You may not agree with what's coming.

At the time of this writing, the current national pastime seems to be the undermining of anything having to do with Donald Trump, both personally and professionally. The facts notwithstanding, an ever-shrinking contingent is still protesting pointlessly, although nobody seems to know about what. The entire "progressive" left seems to be riding on momentum now, fueled by their bitterness left over from their losses in the 2016 election. It hasn't much longer to live, however, as Trump's rising economic tide is indeed lifting all boats: Even the most vocal protesters are spending more time watching their 401Ks grow and less time whining about it.

If you're a student of history -- real history, not the revisionist stuff that tears down statues and builds bathrooms dedicated to gender confusion -- you can see that Trump's recovery and reconstruction efforts are working even faster than Ronald Reagan's did during his first term. When Reagan was saddled with repairing the widespread damage done by Jimmy Carter, it took him two full years before the country could begin to feel the ship being righted. In less than nine months after his inauguration, Trump is already way ahead of Reagan's schedule, with just about all sectors of the economy up and improving -- and feeling it.  That's all good news. One sector, however, is likely to head south, and even though nobody wants to hear about it, I'm here to tell you:

The Tech Meltdown is coming -- and way sooner than you think.

Tech giants like Apple, Google, Amazon and even newcomers like Snapchat and other tech-based ventures are completely out of step with what's happening in America. Sure, they're huge and well capitalized. But that's the result of decades of a lackluster economy, when nothing was happening and nobody had any reason to invest in anything else. Decades of malaise instilled the notion that innovation and technology were the future, and millions of boomers and millennials bought into it.

That's all changing.

Of course it's not fashionable to  say it, but America has always been, and likely will always be, an industrial economy. That's not to say that services and technology don't have their places. But industry and manufacturing have always been the engines powering our progress.  You can see it happen now, if you know where to look. Energy, defense, manufacturing and all of their ancillary industries have soared in value -- and real business orders -- since Trump was sworn in.  Don't take my word for it. Check your own stock ticker to see who's up and who's not. Look at GDP rates and real unemployment figures.

All the needles are pointing in the right direction -- and tech has nothing to do with it.

Now that the market has more real options to invest in real companies with real products that pay real dividends and offer real growth, the two decade illusory-yet-unfulfilled promises of tech are becoming increasingly vulnerable. Dark concerns about Apple's built-in obsolescence, Google's omnipotent disregard for privacy and Amazon's anti-trust behavior only add to the mix.  The Silicon Valley venture model of pumping and dumping short-lived, valueless propositions is just as unsustainable. As the internet bubble once taught us, corporate hubris takes you only so far.

That's why the glory days of tech are over. It's only a matter of time until the big selloff hits.

That's the bad news. The good news is that it may just be the ticket to make Bay Area real estate affordable again.

Microsoft Math: Zune + Vista = Zero

I think it was Richard Nixon who once bemoaned the phrase about it being "lonely at the top." Randy Newman later immortalized the phrase in a wickedly sardonic tune, but nobody has given the theme truer meaning than the boys from Redmond, Washington. In its twentieth year as a public company, Microsoft is causing anything but excitement with two announcements that should be causing all kinds of flurry.

And it's no wonder. Microsoft, one of the world's largest brands with no brand strategy, has no legions of fans eagerly anticipating its next move. In this case, its next move is actually two moves: The release of its Vista operating system and the retail launch of its so-called iPod killer, the Zune. Both of which are being welcomed into the market with a flurry of yawns.

When you read about the launch - or should I say overly-delayed, overly-announced launch - of Vista, there's not a whole lot of good news orbiting the news. Normally, you hear all kinds of spin, mainly about increased functionality or greater resources or lowering the costs of operation. Not this time. This time, the planets circling the press release have more to do with the increased hardware and testing costs of deploying Vista and speculation on the difficulty of its deployment.

That's just what you find in paragraph number one, before anyone even approaches the gossip on how few people actually plan on deploying it.

Meanwhile, in Microsoft's version of retail reality, it has launched the Zune music player, just in time for nobody to buy it for Christmas. You know that you're fighting a losing battle when the best reviewers can say about your new product is that "it could be good, if only...." Of course, there's no brand behind the Zune, so what could people expect? I'll tell you what they can expect: The usual Microsoft spin, where derivative products follow the market instead of leading it.

Forget whether you like Steve Jobs or Bill Gates. The important difference between the two is that Jobs inspires a culture of leadership and creative innovation. Gates, as he has always done, takes the shrewder route, eyeing the success of others and then duplicating it just short of trademark infringement (he did it with Apple's graphical operating system years ago, and for the life of me, I can't figure out why Apple eventually lost that lawsuit).

In any event, you have the typical Microsoft media event happening once again. The party to which everyone shows up early because the drinks are strong and the food is free, but who leave early because there's a better party down the street. You'd think that with all the resources at their disposal, Microsoft would be able to establish itself as a leading brand. But it doesn't, and the reason is agonizingly clear:

Microsoft is not a brand. It's a warehouse with an identity. There's no Microsoft fan base, only hostages held in check by their accounting departments' insistence on purchasing the lowest cost items for their short-term gains. If Microsoft were really a brand, it would have its fans and defenders. As it is, nobody lines up for preview copies of Vista. Nobody rushes down to Best Buy before all the Zunes sell out.

In my business, clients don't contact me when they feel pain. They contact me when the pain is so intense that their balance sheets begin to bleed. When no matter how good their product or how high their budgets, the public just doesn't buy into them.

For my money, Microsoft should be buying bandages in bulk right about now.

Digital Retardation

So I'm reading my morning newspaper (yes, I'm one of those whose idea of luxury is an unhurried cup of coffee with a real, tree-killing newspaper) and the lead item is a story about how the city of Los Angeles is having all kinds of problems with its distribution of iPads to its school students.  Not only are iPads disappearing from the schools, but it seems that a fair number are being reprogrammed by students in a way that allows them to elude security monitoring while gaining access to "forbidden content" such as porn and Facebook -- which one could argue are one and the same.

When this program was first launched, it was heralded with all kinds of fanfare.  "An iPad for every student" had the same euphemistic ring as "No Child Left Behind," which to me, clearly signalled its potential for massive failure from the start.  For some reason, school systems -- not unlike the lemmings who line up at the Apple Store to enslave themselves to the latest version of its useless technology -- seem to think that equipment and technology provide the "education of the future."  They kid themselves into wrongly correlating other nations' high academic achievements with faster WiFi connections and widespread technology.

Well, you heard it here first:  All of that is complete crap.  It's actually doing far more long term damage than you might think. And here's why:

The biggest mistake Americans make in their everyday lives is thinking they can buy their way out of their problems.  It doesn't matter if you want to lose weight, remodel your home or find a job. Simply call the toll-free 800 number or click the link and someone, somewhere will charge you a tidy sum to make your problem go away.  And if you call now, the shipping is free.

The same syndrome applies to our education system, where your tax dollars support programs that ship mountains of computers, smart boards and useless technology that someone, somewhere has sold as an educational panacea, based on two fallacious arguments:

1.  You can't win a war without the right weapons, which translates to, "give teachers the tools they need to teach."
2.  Anything with a price tag represents a tangible, accountable solution allowing administrators to concoct convoluted formulas that speciously demonstrate some kind of "return on investment."  Bureaucrats love numbers.

In effect, what your educators are telling you is the same thing as those late night infomercials: "We can fix it for you in three easy payments."  Unfortunately, it's having the exact opposite effect.

If anyone were really interested in educating kids, the first thing they'd do is confiscate every single piece of technology from every kid until high school.  That's right, no phones, no pads, no laptops.  Nothing.  In fact, the less you give kids, the more they'd develop the real skills they need for the rest of their lives:

Critical thinking  and personal interaction skills -- both of which are hugely lacking and contributing to an unprecedented atomization of our society.

See, if you teach kids critical thinking, they actually use their brains to solve problems instead of looking everything up on Google.  If they can't solve their own problems, they learn how to approach others who can help them.  And if they can solve them, they learn how to help those who can't.  Pretty slick, eh?  Well, none of that happens when you load their pockets with iPhones and iPads, expecting them to "work at their own individual pace" -- another huge, counter-productive myth.  What the geniuses who run your school system don't understand is that "working at your own individual pace" not only undermines a kid's tolerance for others' differences, it also hampers his ability to spot opportunity:  after all, the first rule of business is to find a need and fill it.  If your ears are plugged with ear buds and your eyes are locked on a screen, you never develop observational skills that clue you into the world surrounding you.

It gets worse.

Believe me, I'm a realist who knows all too well that those who pine for the good old days usually choose to forget about how bad they were.  But another disturbing aspect of Digital Retardation gets even more personal.  Up until this generation, the dance of courtship followed a fairly predictable path, where two people met, got acquainted, enjoyed each other's company and -- if they struck a major chord -- ended up in an orgasmic explosion of shared intimacy, passion and fun.  The anticipation and romance helped define the relationship to the point where one could feel the tension that led into the joy of mutual discovery.

Not anymore.

Digital Retardation has pretty much destroyed all that.  Because kids aren't trained to think and are steered into isolation, most of them under 30 (yes, they're still kids) have reversed the course of events, mindlessly hooking up first and then, if the sex was good, considering finding out more about the person with whom they slept.  It's easy.  You just text them. Order a drink.  Have sex. Then text your pals where you'll meet them for dinner.  Not that I meet armies of kids, but the ones I do meet all register their confusion about why their "relationships" (and I use that term incredibly loosely) just don't seem to work out.

I simply tell them:  It's because you can't Google "How to have a meaningful conversation."

Still think you can pay your way out of your problems?  That technology is the wonderful panacea Apple and Google and Microsoft keep telling you it is?  Really?

Maybe it's time you did some critical thinking of your own.

Self-Driving Cars Will Kill You

At the time of this writing, there's a national election brewing in the United States, waves of  refugees over-running Europe and economic peril hovering over China. It is easily not the best of times, which is how a momentous incident recently occurred without anyone much noticing:

A few weeks back, General Motors invested roughly a half billion dollars into Lyft, the Uber competitor that's disrupting the transportation industry via hand held technology. If you've been asleep at the wheel, Lyft connects private drivers with passengers who need a ride, using an application consumers keep on their cell phones. Riders are connected to a driver who uses his own car to charge them for the ride. It's not only cheaper and more convenient than taxi cabs, it's also helping to put those taxi cab companies out of business.  But that's another story. More consumers use these services because it's cheaper than owning, maintaining and insuring a car. In fact, some industry analysts predict that private car ownership will eventually disappear altogether in favor of "rides as needed services."

Nobody seemed to care much about GM's investment in Lyft, because nobody seems to care about much anything these days if it isn't placed in front of their noses. In this case, however, one need only look slightly to the left of Detroit to see the real, potentially huge implications of GM's move. One has to ask himself, "Why would an automotive company want to hook up with a tech outfit?"  Here's one scenario:

Throughout history, car companies have promoted their products to the consuming public, but in reality, the big money has never been in individual sales, but in fleet sales, where one sale can move hundreds or thousands of units to one corporate customer. Rental car agencies, police departments, the military, taxi companies, delivery services and just about any other enterprise that recruits armies of drivers are sought-after customers.  They buy lots of cars with one stroke of the pen. 

Bearing that observation in mind, it would make sense for GM to get a foot in the door of Lyft if Lyft were planning on converting its model from private drivers to its own fleet of hired drivers.  And if vehicle ownership really is slipping out favor, GM would want to supply the fleets for whoever is left buying cars, like Lyft. In the tech world, total control of data is the brass ring, and by hiring its own fleet of drivers for its own fleet of cars, Lyft would be reducing the risk inherent in both, while ostensibly increasing the efficiency/profitability of each.  

But the fun doesn't stop there.

Assuming that scenario is accurate, it's not too far a stretch to imagine the day when Lyft dismisses all of its drivers and replaces them with its own self-driving cars -- with General Motors right there to supply them.  After all, if self-driving vehicles really are coming soon, and operations like Lyft are completely technology-driven, who really needs a human driver? Pretty scary, eh? It gets scarier. You think self-driving cars are cool? Think again. They're going to kill you. And here's how: 

First, realize that self-driving cars aren't really self-driving at all.  They're steered by interactive technology that responds to an infinite number of stimuli, ranging from consumer cell phones to Global Positioning Services (GPS) from satellites orbiting the Earth.  The only way the system can work is by maintaining a steady flow of data throughout the process.  Digital information which is archived and analyzed and never destroyed, which means you will be tracked wherever you go, forever, by a system that anyone can hack into or abuse.

The system also relies on electric power, so the day someone -- or some terrorist --  kicks out the plug from the wall, all those GPS systems will be rendered useless or worse: hacked to cause crashes and put passengers in real danger. This is one of those issues that nobody wants to acknowledge, like the water supply and the power grid, both of which are insanely vulnerable. If you don't think it can happen, remember the last time you couldn't get phone service or internet?  It's not exactly a rare occurrence.

But there are far worse dangers of self-driving cars that are affecting you even as you read this.  They're just one more way big tech businesses -- the ones that like to portray themselves as your friends -- are destroying humans' ability to provide for themselves. Brands like Amazon, Apple, Google and more aren't doing as much to enable your potential as they are destroying your self-reliance.  They're increasing your dependence on their services by requiring you to pay fees for something you can easily do yourself at no cost.  Instead of owning your music, you stream it. Instead of thinking through your decisions, you click.  Instead of educating yourself with truth, you Google it. Convenience undermines any need for critical thinking, replacing it with blind obedience. That's why nobody remembers your phone number; they have it on their speed dialer. 

Self-driving cars will continue technology's mission of atomizing society, further reducing human contact and estranging us all from one another. Autonomous vehicles reinforce the notion of "it's all about me" because you're not aware that someone else is out there in the lane next to you. There's not even a driver. There's just you. Alone. 

That may be good for Lyft and General Motors and Amazon and Apple. But it's bad for you, bad for your kids and bad for humanity.  If you really want to know why the world has become increasingly disconnected, look to the people who promoted connectivity in the first place.  You know, the same folks whose lack of conscience disconnects people's hearts and minds -- and keeps al Qaeda members up to date.

Branding Rescues America

As the United States of America continues its journey through its dark, dreary depression (I know, it's technically a recession, but I'm actually referring to its citizens' states of mind), it seems no political, economic or social leaders can come up with any practical solutions to our problems. By practical, I mean something other than a scare tactic or a distraction. Let's face it, terrorism, illegal immigration, Obama's birth certificate and global warming are all grist for the tabloids' mills, but when you get right down to it, the fundamental solution to America's problems is jobs -- or the current lack thereof. And no matter how many sex scandals or scare tactics you throw at them, the American public isn't buying any of it. They need work.

One doesn't have to cite John Maynard Keynes or Adam Smith to know that if people don't have money, people don't spend money. And if people don't spend money, nobody makes money. But if you're going to increase jobs in America, there are two important lessons you're need to learn:

The first lesson is that capitalism and businesses run rationally on cold, hard numbers. Businesses do what they can to lower costs - especially human labor - in order to maximize profits and undercut their competitors' prices.

The second lesson is that the first lesson is usually false. And here's why:

While it seems intuitive that businesses obey the first law, the truth is that most businesses - and certainly the American consuming public - are anything but rational. As I often tell my clients, if every business decision were entirely rational, all purchases would be determined by price. What American businessmen, policy-makers and politicians overlook is that most decisions made by humans are non-rational in nature. This would explain, for example, why dopes stand in line for hours to pay double retail for Apple iPads and iPhones when dozens of other competitive products do far more at substantially lower prices.

Of course, my being a branding guy, you must know where this discussion is headed. But if you don't, keep reading, because it makes a lot more sense and can be deployed with the real results everyone wants but nobody seems able to deliver. Bear with me and see if this doesn't add up for you:

Consider that, as I've published, branding is getting your prospects to perceive you as the only solution to their problem. If you accept that the purpose of branding is to create the perception that there's no place else to shop, your brand becomes the only game in town. You can charge whatever you like for whatever you sell. If you're branded properly (and that's a big "if"), you should be able to place two identical products on a table and have consumers buy yours at a 20% premium -- simply because it's your brand they're buying.

Now consider this: What if an entire country had a brand strategy? What if "Made in USA" were developed into a true, actionable brand strategy (rather than hacked together by some feel-good political cronies)? I'll tell you what would happen: American businesses could sell American products and services at higher prices, simply because they were American. Those higher prices could afford American labor, which would keep jobs here in America, because after all, to be "made in the USA," you have to be, well, made in the USA. Think it can't work? It already has. And I can prove it. Just ask yourself this one simple question:

Which country commands the highest price for a wrist watch?