A History of Silicon Valley

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These are excerpts from Piero Scaruffi's book
"A History of Silicon Valley"

(Copyright © 2016 Piero Scaruffi)

The Selfies (2011-16)

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The Saga of Apple

In July 2011 Apple had more cash and securities ($76 billion) than the cash reserves of the government of the US (which was facing a temporary liquidity crunch due to debt ceiling debates). Google was on a buying spree (basically an admission of inferior technology) while Apple rarely bought anything from others (an impressive demonstration of technological superiority). Apple had always been a strange company, a distant second to Microsoft in operating systems for personal computers, but possibly better respected than Microsoft (certainly so in Silicon Valley), as if Microsoft's rise was mere luck while Apple's survival was pure genius.

Meanwhile, Apple continued to refine its MacOS to the point that Microsoft's Windows looked positively troglodytic to the Apple base. The iPod and the iPhone increased Apple's reputation in designing wildly appealing products, even though neither fully dominated its market (there were lots of digital music players, and Google's Android was growing a lot faster than Apple's iOS). The MacOS and iOS had, however, an incredible following worldwide, unmatched by any other desktop and mobile software platform. And, last but not least, Apple ruled the handheld tablet market with the iPad (almost 70% of the marked in mid-2011). Apple had never embraced social computing (just like it had been slow to embrace the Internet to start with) and it was late in cloud computing (the iCloud was announced in June 2011).

Yet there was a general feeling that Apple did things only when it was capable of stunning the world. No other company could afford to be so late to the market and still be expected to make a splash.

The philosophical difference between Google and Apple was even wider than between Google and Microsoft: Apple still conceived the Web as a side-effect of computing, not as the world inside which computing happens, whereas Google (whose slogan was "nothing but the Web") was pushing the vision of the Web as "the" computing platform.

The difference in business models was even more profound: Google was making (mostly buying and distributing) relatively trivial technology and letting people use it for free (with the advertisers footing the bill), de facto turning the Web into a giant advertising billboard. Meanwhile, Apple was expecting people to pay a premium for its devices and services, just like any other traditional, quality-branded good.

In fact, one of Apple's great and unlikely success stories was its retail stores: the "Apple store" was popular worldwide, making Apple of the most valuable brands in the world. In July 2011, revenues from its retail stores were $3.5 billion, up from $2.6 billion the previous year (2011 was a terrible year for the whole Western economies). Apple was planning to open 40 new stores in the following six months, mostly abroad.

Google was trying to make computing more or less free, while Apple was trying to make computing as fashionable as cosmetics and apparel. Apple had tried this before, when its closed platform Macintosh had competed with Microsoft's open platform Windows. Now it was the relatively closed iPod, iPhone and iPad versus Google's Android platform. In many ways the iPod, the iPhone and the iPad marked a regress in computing. They were computers, but limited to a few functions (that they did very well). For the sake of making those functions as mobile as the transistor radio (the first great mass-market portable electronic device) Apple reduced the power of the computer. In theory application developers could add their own applications to the iPhone, but in practice Apple had veto rights over which applications were allowed (so much for freedom of choice and the free market).

In 2007 Apple had chosen Google as the partner for both Maps and search of its iPhone. Sensing that Google was an untrusted ally, in 2009 Apple acquired Los Angeles-based Placebase (a more flexible and customizable mapping service founded by Jaron Waldman) and in 2012 it replaced Google Maps with its own mapping service. This move definitely severed the technological ties between the two platforms.

When Steve Jobs, the ultimate icon and mythological figure of Silicon Valley, died in October 2011 (one day after the official Apple release of the intelligent assistant Siri), his legacy was the legacy of the whole of Silicon Valley: a new discipline that, borrowing other people's inventions, was not solely about the functionalities of a product and was not solely about the "look and feel" of a product, but was very much about the way that the human mind and the human body should interact with technology. It was a discipline born at the confluence of the utopian counterculture of the Sixties, the tech hobbyist culture of the 1970s and the corporate culture of Wall Street; and it was about creating a new species, a machine-augmented Homo Sapiens (Home Sapiens Plus?). Just like Silicon Valley as a whole, Jobs had mostly copied other people's ideas, but turned them into existential issues. Jobs elevated to a sophisticated art the idea that producer and consumer should engage in one and the same game: exhibitionism; and then congratulate each other, and even worship each other like fraternal deities.

It was telling that very few people noticed the death, also in Palo Alto, and just six months later, of Jack Tramiel, the founder of Commodore, the first company to sell a million units of a personal computer and whose Commodore 64 sold four times the sales of the Apple II.

While many predicted the demise of Apple after the death of Jobs, Apple kept growing and becoming an ever more formidable corporation. In 2011 it introduced its cloud storage (iCloud), so that iPhone and iPad users didn't have to worry about losing their data if they lost their gadget. In May 2013 the 50 billionth application was downloaded from the App store. In 2014 Apple sold its 500 millionth iPhone, besides releasing its mobile payment service (ApplePay) and its first wearable (the Apple Watch). In 2015 Apple purchased Beats from rapper Dr. Dre, and then launched Apple Music to compete with Spotify.

Apple also acquired: Israeli 3D-scanner startup PrimeSense (2013), the base of biometric identification Face ID; Canadian radio-streaming startup Swell (2014); and Shazam in 2018, the world's most popular app for identifying music; and a lot of augmented-reality startups and a lot of machine-learning startups.

click here for the other sections of the chapter "The Selfies (2011-16)"
(Copyright © 2016 Piero Scaruffi)

Table of Contents | Timeline of Silicon Valley | A photographic tour | History pages | Editor | Correspondence