the origins of apple as a luxury goods company 

From Jony Ive, by Leander Kahney, pg 104:

Jobs aimed at making innovative products again, but he didn’t want to compete in the broader market for personal computers, which was dominated by companies making generic machines for Microsoft’s Windows operating system. These companies competed on price, not features or ease of use. Jobs figured theirs was a race to the bottom. Instead, he argued, there was no reason that well- designed, well- made computers couldn’t command the same market share and margins as a luxury automobile. A BMW might get you to where you are going in the same way as a Chevy that costs half the price, but there will always be those who will pay for the better ride in the sexier car. Rather than competing with commodity PC makers like Dell, Compaq and Gateway, why not make only first- class products with high margins so that Apple could continue to develop even better first- class products? The company could make much bigger profits from selling a $3,000 machine rather than a $500 machine, even if they sold fewer of them. Why not, then, just concentrate on making the best $3,000 machines around? The potential merits of Jobs’s strategy for the company finances were clear. Fewer products meant less inventory, which could have an immediate effect on the bottom line. In fact, Jobs was able to save Apple $300 million in inventory in just one year, and avoid having warehouses full of unsold machines that might have needed to be written off if they failed to sell.

This new Apple would be built around industrial design, replacing the older engineer led culture which had solidified at Apple since Jobs had been forced out of the company. From page 105:

Jobs’s plan for Apple was more than a matter of B- school economics: he planned to make industrial design the centrepiece of Apple’s comeback. Since his first incarnation at Apple (1976–1985), it had been apparent that design was a guiding force in the trajectory of Steve Jobs’s life. Unlike Jony, Jobs had no formal design training, but he possessed an intuitive design sense that dated to his childhood. Jobs, early on, learned that good design wasn’t just on the exterior of an object. As Mike Ive had been for Jony, Jobs’s father was a formative influence on his son’s appreciation of design. ‘[My father] loved doing things right. He even cared about the look of the parts you couldn’t see,’ Jobs recalled. His father refused to build a fence that wasn’t constructed as well on the back side as it was the front. ‘For you to sleep well at night, the aesthetic, the quality, has to be carried all the way through.’

For Jobs, design amounted to more than appearances. ‘Most people make the mistake of thinking design is what it looks like,’ Jobs famously said. ‘People think it’s this veneer – that the designers are handed this box and told, “Make it look good!” That’s not what we think design is. It’s not just what it looks like and feels like. Design is how it works.’ 6 With the development of the Macintosh, Jobs got really serious about how- it- works industrial design, which he believed could be a key differentiator between Apple’s consumer- friendly, works- right- out- of- the- box philosophy and the bare bones, utilitarian packaging of early rivals like International Business Machines.

This entails a very specific orientation towards design. As Ive describes on pg 115:

‘As industrial designers we no longer design objects,’ Jony said. ‘We design the user’s perceptions of what those objects are, as well as the meaning that accrues from their physical existence, their function and the sense of possibility they offer.’

One which contrasted markedly with their competitors in the PC industry. From page 115-116:

The computer industry ‘is an industry that has become incredibly conservative from a design perspective,’ he said. ‘It is an industry where there is an obsession about product attributes that you can measure empirically. How fast is it? How big is the hard drive? How fast is the CD? That is a very comfortable space to compete in because you can say eight is better than six.’ 22 But Jony offered a key insight: ‘It’s also very inhuman and very cold. Because of the industry’s obsession with absolutes, there has been a tendency to ignore product attributes that are difficult to measure or talk about. In that sense, the industry has missed out on the more emotive, less tangible product attributes. But to me, that is why I bought an Apple computer in the first place. That is why I came to work for Apple. It’s because I’ve always sensed that Apple had a desire to do more than the bare minimum. It wasn’t just going to do what was functionally and empirically necessary. In the early stuff, I got a sense that care was taken even on details, hard and soft, that people may never discover.’