Xerox The New Apple?
Since the incredible rise in Apple's fortunes speculators look to find the next big thing
. "Xerox, one of the biggest manufacture names in the world, have got it right in their market and the rest are playing catch up" say Online Connect. In many ways the companies share a similar history. Apple (founded by Steve Jobs, Stephen Wozniak, Ronald Wayne) produced the first successful personal computer with a graphical operating system. Xerox (founded by Chester Carlson, Joseph C Wilson) were the inventors of Xerography (later called the copier).
Both Companies however seemed to lose their way in the eighties. In 1983 Apple recruited John Sculley, the marketing genius behind Pepsi Cola, to work as CEO alongside Steve Jobs. It should have been the dream team, but as Apple announced the arrival of the Mackintosh, with a Ridley Scott commercial entitled 1984, an internal power struggle was happening behind the scenes which eventually saw Jobs forced out of the company he was one of the founders of.
In the 70's Xerox's core product was facing stiff competition so they started branching out, investing heavily in the computer industry. Building a team of innovative programmers and inventors they developed graphical operating systems, the computer mouse and what could have been the first personal computer (except Xerox failed to realise the commercial value and didn't market it). Xerox foresaw the transition of the document and its development from paper to electronic format. However, while they were investing in the future of documents, they had failed to protect their core business and by the mid eighties Xerox were in rapid decline, with other manufacturers catching up with their technology in the photocopier market.
In 1979 Xerox threw open their doors to the press and the public, showcasing their unique products, among those attending were Steve Jobs and Bill Gates."They just had no idea what they had" Jobs was later quoted as saying. Xerox had internally connected individual sites together using what they referred to as 'Inter Network Routing' later abbreviated to 'Internet'.
John Scully carried huge weight with Apple's board, having been behind the Cola wars marketing battle that had seen Pepsi catch up with the world's biggest brand name, Coca Cola. Some of Apple's marketing alienated customers, such as the infamous Mackintosh Lemmings advert. The Apple Mac, created by Jeff Raskin and Steve Jobs (before he left), became a success, after a rocky start, and the market leader in desktop publishing and the media industry. Meanwhile the Apple Lisa , which Steve Jobs was removed from the development of, sank without trace.
By the mid eighties Xerox and Apple had opposite strengths and weaknesses. While John Scully at Apple was a proven marketing guru, Apple by the end of 1985 had lost both co-founders Stephen Wozniak and Steve Jobs. Xerox meanwhile had one of the best development teams in the world at that time in the computer industry. They foresaw the rise of digital documents and communication through the internet and were speculating about a digital market where people advertised on search. However, while Xerox had the ideas they lacked the marketing expertise and suffered in trying to make the transition from Xerox Machines to IT in the eyes of the business user.
Ultimately both Apple and Xerox hit a brick wall in the eighties when they tried to tackle the business market leader IBM. While many thought the battle for the business user would be about hardware, one small software company were concentrating on the operating system. Bill Gates Microsoft had none of the overheads of the manufacturers and was licensing its own version of UNIX and later DOS to computer vendors. In 1981 Microsoft won a contract to provide IBM with an operating system for the IBM Personal Computer. As IBM PC clones came to the market Bill Gates and Steve Ballmer successfully marketed MS-DOS to other manufacturers. In 1985 Microsoft released a graphical version of its MS-DOS operating system called Microsoft Windows for retail. The product was a massive success and became the most widely used operating system in the world. Microsoft went on to become the dominant operating system in business, networking and PC with successive versions of Windows and Microsoft Office. Free from the expensive costs of manufacturing, Bill Gatess Microsoft saw the potential of licensing the operating system itself.
Apple and Xerox continued down different paths in the 80's and early 90's. Seeing their core product sales falling, Xerox began to reinvest in photocopiers, printers and digital multifunction copiers that combined scanners and printers. In response to Canon's CLC technology Xerox invested heavily in developing Colour Copiers. Apple development was lead by marketing and too many products. High manufacturing costs and the lack of technical leadership saw Apple release a series of unsuccessful products. Steve Jobs proceeded to found Pixar and NeXT. It was the purchase of NeXT, primarily for its operating system, that brought Steve Jobs back to Apple in late 1996. By July 1997 Jobs was running Apple again, ousting Gil Amelio. Gil Amelio went on to form several companies with Apple co-founder Steve Wozniak. In 1997 Apple started retailing direct on the internet and introduced a new build to order system, following Dell's success. When Michael Dell was asked what he would do with Apple he said "I would shut it down and give the money back to the shareholders". Nine Years later, when Apple value rose above 72 billion, outstripping Dells share price, Steve Jobs had the last laugh circulating an email that read, "it turned out that Michael Dell wasn't perfect at predicting the future".
Steve Jobs announced a partnership with Microsoft in 1997 to develop Microsoft Office for Apple Mac. As part of this collaboration Microsoft purchased $150 million in non voting stock of Apple. Microsoft's dominance of the operating system market was so strong, that perhaps it was in their interest to keep a competitor afloat, especially with antitrust charges surrounding Microsoft at the time. 1998 saw Apple focus on a return to profitability and the launch of the hugely successful iMac. Apple's resurgence continued under Jobs with retail stores opening and has seen the brand branch out into iPhones and iPods. In an incredible comeback Apple brought in some of the best people from Silicon Valley to their board of directors including Eric Schmidt of Google.
In 2001 Xerox found their "Jobs" in the form of Anne Mulcahy, who had been with the company for many years. Dubbed the accidental CEO, it was Mulcahy who stuck by Xerox R & D while at the same time returning the company to profitability. Recognising the huge value in their brand, Mulcahy stemmed the flow of customer leakage by improvements in customer service and later improvements in technology. Reinventing the Xerox logo in the process to appeal to a modern internet audience, Anne Mulcahy focused the company on innovation and customer interaction. Xerox, with its strength in R & D now fully supported, started to combine their computer expertise with their hardware digital technology. The vision they showed so many years ago in the computer industry is finally combining with their core products following "the document" in all formats, Electronic, Internet, Email and Print. Today, Xerox, now headed by Ursula Burns, are one of the leading Document Management providers in the world. With excellent hardware and leading technology such as solid ink printing Xerox seem uniquely positioned to become market leader again.
by: Jennifer Robinson
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