Apple's failing strategy with Final Cut Pro

Time travel just five years back to 2010 and Apple was the 400 pound Gorilla in the field of video-editing. Final Cut Studio had a big market share and was on its way to become the MS Word of video-editing. 

Since then a lot happened. Apple created an entirely new version of its software from scratch. This new version, 'Final Cut Pro X', is arguably the most innovative and least expensive video editing application for professionals in the market. 

Paradoxically however, Apple lost a lot of credibility and a substantial part of their userbase. The transition became a mayor strategic disaster, 

In this article I take a closer look what went wrong. What business principles were neglected? What traits of Apple - valuable at other occasions - worked out the wrong way this time?

It is a remarkable failure for a company that is continuously praised for its grand business strategies. A failure of a magnitude that compares to Nokia missing the smartphone revolution or Microsoft's launch of Windows Vista. 

The market share of the old version was often cited as around 70 percent. - although a lot depends on how you define a market segment and it is hard to find reliable data.  However, given the fact that it is Mac-only software this is an enormous achievement. As such Final Cut is an important driver for the sale of Apple computers and contributes heavily to the brand image as Apple's products for the creative class. A product you'd really ought to care about as a company.

A bit of history. The pivotal point is the software transition from Final Cut Pro version 7 to Final Cut Pro X in 2011. I will mention them as '7' and 'X' for convenience.  They skipped some version numbers to indicate this was a mayor step - and indeed,  it was huge. The new program was based on different concepts and had a totally new interface and workflow.  

Trait: Innovation by revolutionary change

This kind of revolutionary change is what Apple is famous for. It is in their genes, to choose a complete turnover, even with products that are at the time highly succesful. They did it with the iPad mini when they replaced it for the nano, they did it when they dropped IBM's PowerPC-processors in favor of Intel's and on a number of other occasions. If you need to mention just one core quality of Apple as a company, it must be their ability for change. 

But.. you have to take care of business continuity

Continuity is vital to almost any business. Apple violated this need for continuity for their clients.

At the very moment they launched 'X', they withdrew '7' from the shelves. You  couldn't order it anymore. This created an uproar.
Clients felt pushed to upgrade to a very different application they even hadn't evaluated yet. It appeared work your made in '7' could not be opened in 'X' - due to the rather different concepts.  For those with large budget movie productions this was plain horror.  
Apple reacted - but not clear enough, too slow and not in the open - by starting to sell  FCP-7 to existing customers again, but only on specific request. The product didn't reappear in the store again. There was no promise on the period of availability or future support. 

The same mistake repeated might have a bigger impact

It was not the first time Apple was careless about continuity. Some years before they ceased their server and storage line without offering a proper alternative. Sure, you could use a Mac Pro or even a Mac Mini as a server, but it takes more than just running OSX server to make a machine a proper server. In itself i was not a strange decision: Apple's server business was too small to compete with companies like Sun, Dell and IBM. But they didn't take care of a proper alternative.  

In the years following the launch of 'X' Apple became slow with the upgrading of the Mac Pro and finally withdrew it entirely in 2013. This left only relatively light computer hardware available, based on notebook processors. There was a gap of about a year before the new Mac Pro came on the market. 
Below two typical comments from the internet. Willing customers to spend € 2500 or more, but frustrated as it was not even clear when and if Apple would show up with a product. Of course, Apple doesn't answer to mere mortals. 

Hello Apple. We are the Creative Community and we are looking for a little clarity on one of our favorite products. The Mac Pro Tower. Is that too much to ask? Sincerely, Lou ***

Hello Apple. Remember me? I'm one of your loyal users. I'm one of the guys who has owned 2 MacPros, a G5, a G4, 4 laptops, one iMac, 4 iPods, one MacMini, 4 iPhones and a bevy of other peripherals and software packages over the last 10 years. 

I'm looking for a little clarity.

Can you please let me and the other members of this page know what is going on with the MacPro? Its been neglected for far too long. We realize all the success of the iPad and iPhone and we're really happy with our new toys. But unfortunately many of us need to make decisions on hardware for professional uses that allow us to make a living.

Preferably no product than something less than stellar?

Before the launch of 'X' version '7' was getting really old. During rendering only two CPU-cores were being used at maximum, which looked rather silly on a graph when your machine had eight cores available. 

You could wonder whether it is a trait of the Apple organisation that not offering a Mac Pro is more acceptable than offering something outdated or mediocre. Are these the moments that we get a glimpse of the internal struggles at Apple? 

There is something to say for such an approach: if you agree on a compromise the product will be there for some time, and it creates a huge risk of lowering the bar for next products also. 

But as a client, I can drive in an outdated or mediocre car, and I will prefer this most of the time above no car at all. The problem with Apple is that if they don't offer a solution you are left without an alternative. Above all: continuity.

Yet  another example of neglect shows up in the next paragraph.

Missing the use case: video editing on location? 

A strong point of FCP on an Apple notebook in recent years had become editing on location.

Then, in 2011 suddenly Apple dropped the 17 inch MacBook Pro. Why? My guts say they decided it from a design point of view. Too big, not fashionable, Soviet era connotations, exit. 

Editing a film you need screen size. A 17-inch screen is just big enough to sit together with a colleague. In a studio you will opt for more monitors, on the road a big screen on your notebook is very useful. 

Besides, a bigger notebook has room for more performance, more storage, more power and better cooling. Performance and storage heavily needed for HD. Cooling being a critical factor in thinner than thin notebooks that run awfully hot during rendering, leading to throttled performance and eventually failing hardware. 

The 17 inch MacBook Pro was not just a bigger notebook, it also had another use case.

If you don't know the work flow of all your clients: make flexible software

'X' is much more deterministic than its predecessor. That fits in an Apple-design philosophy: we will help you to do things the one and only right way. Suddenly you couldn't change the lay out of your workspace anymore. All media was now being stored in a library. 

However, the early library concept for storing all data failed to cover a lot of real life situations. Teamwork on the same project was a challenge, neither it worked with the obvious need to keep footage from different accounts separated. 

Software needs to be stable

This one is too obvious.  It was not.  'X' crashed several times a day. The only point of comfort being that 'X' stores your work continuousy in the background, so you rarely lost anything. Compressor, a supporting application of 'X' was close to unusable due to its awful performance. 

The missing pieces: clients need the entire puzzle

Storage distributed over different machines, back ups over a network, it was't all thought out and there was little freedom for clients to find their own way. Since Apple didn't offer anymore its server and storage solutions, clients had to go to third parties. 

Shortly after the launch of 'X', DVD Studio, the DVD authoring software from the previous version disappeared. Although in the vision of Apple DVD's were may be already obsolete, that was far from the reality for the general public in 2011. DVD's were the new VHS: the video-format anybody can play at home. 

Unfulfilled promises: you have to deliver

When you need expansion, with a notebook, you have to rely on external devices.  Here Apple failed again in providing continuity. Firewire was announced obsolete. USB 2 too slow for HD video. USB 3 not available. Everybody was hoping for this new interface: Thunderbolt.  Apple offered Thunderbolt on its 2011 products, but was late with USB 3, clearly a marketing decision to push Thunderbolt. 

That would have been a wise decision strategically, that would have helped to position Apple's Macbooks in a different league if..... Thunderbolt devices would become available. Actually, there were very few and they were outrageously expensive. This situation lasted for years. Some categories of announced products, such as external graphics cards never made it.

Creative users are not early adaptors - they are just users

One would be tempted to think that creative users pick up a new product easily. That is a mistake. They can be just as reluctant to change as the average office worker. 

Immediately after the launch of 'X' there was a huge amount of criticism, also from very respectable users and websites that was incorrect and often plainly  ridiculous. "I cannot 'normalize' a track" - indeed, you now have a much, much better compressor and limiter option to your disposal. 

Adobe threw lots of fuel on the fire, offering Final Cut users very attractive deals to 'crossgrade'.  

Things were adding up but Apple communicated very little. 

Trait: protect your freedom to act

Apple has a tradition of being closed about their planning. There is this famous quote: 'we don't comment on possible future products'. It gives them freedom, keeps competition at a distance and they avoid raising expectations too high.

Professionals have a longer horizon than consumers. They don't consume - they invest. They want to have at least some insight in what will happen with the platform they have chosen in the near future.
Or they need a lot of trust. 

Apple is also silent about its strategy. But from the way they operate it is clear that they are chasing great concepts, developing great products and positioning these products in the upper end of markets they choose or even sometimes define. Added to this, there is another core ingredient for Apple that is very important in order to be successfull: the trust they get from their userbase. You never used or even saw an iPad and still you believe that it is something that makes sense.  The products have to be great and the concept has to make sense in order to remain this trust. There is a lot of trust involved.

If there is an issue, trust will erode and  a change in position and style of communication is needed to deal with such a crisis. This seems the moment when the strong internal culture of Apple becomes a factor. They don't adapt easily. 

What the Apple movie making business needed - and still needs desperately - is a kind of director. Someone who identifies the needs from the sector and ensures continuity of the right products and services - both hardware and software.

Whether that will happen? You can think of valid strategies for Apple with and without professional creative applications. The landscape of suitable applications is changing fast with fierce competition and a high pace of innovation. Either they take this field very seriously or they will become obsolete. Given that the quality of 'X' is best in class, it would be a shame when they don't react.

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