When Fred Anderson speaks, people listen; he is Apple’s Chief Financial Officer, after all, and has helped Steve Jobs steer Apple out of rough times to its present profit-making presence. Mr. Anderson addressed a group of University of Michigan business students recently as the key speaker in a year-long series of speakers sponsored by the UM Business School’s High-Tech Club.
The speaking engagement was covered by the Michigan Daily, which reports that Mr. Anderson offered views on the strategies Apple used to get from record losses to profitability, about the "death spiral" perception that many had in 1996 when he joined the company, and how the company has attacked the music business. From The Michigan News article, Apple CFO lectures about company’s marketing methods:
"People thought we were in a death spiral — they didn’t think we’d make it," said Anderson, who joined the company in 1996. He served as the premiere speaker in a year-long series sponsored by the Business School’s High-Tech Club. In his speech, which was geared toward business students, he helped explain how a company can reinvent itself and turn profits around, despite many pessimistic predictions from experts.
Just three weeks after joining Apple, Anderson was confronted with the company’s $325 [million] loss, which he attributed to a general decline in the computer industry and the company’s poor connection with its customers.
In order to turn profits around, Apple reorganized its leadership team and focused on reinventing its image.
"Apple’s an innovator, and we refused to mortgage our future," Anderson said.
[…]
Apple has reversed its slump through new retail outlets and a larger advertising campaign.
The report also says that Mr. Anderson talked about Apple not being very successful at converting PC users. The article does not quote him on the subject, however, but does include a quote that may have been taken out of context. From the article:
On Nov. 30, they will open their first international retail store in Tokyo, and currently have 70 stores around the country. Nevertheless, Anderson admitted they have not been very successful in converting PC users.
"There has been no real marketing effort and poor distribution, and now we’re making changes to address that," he said.
Apple spent millions on the Switch campaign, which would be considered a "real marketing effort" in most circles. TMO has contacted the Michigan Daily for clarification. In addition, the original report references a loss of US$325 billion for Apple, which we corrected in the above quote to the proper US$325 million.
There’s more in the full article, which we recommend as a good read despite the two quibbles mentioned above.
The Mac Observer Spin:
We are very interested on whether or not Mr. Anderson said that Apple has not been successful at converting PC users. The company’s official line has been that a large percentage of consumers buying computers at Apple’s retail Apple Stores are "Switchers." Apple was counting first-time computer owners as "Switchers," but if Mr. Anderson is now saying that converts have been few and far between, then we have to rethink the last couple of years.
Our position at TMO has long been that the Switch campaign helped sustain Apple’s small market share during the MHz drought. That runs contrary to some in the Mac community who have declared the Switch campaign a failure, but it was based on sound reasoning and observations. Perhaps we were wrong about that, or perhaps the article simply quotes Mr. Anderson out of context. Hopefully we will be able to get clarification fairly quickly.
In the meanwhile, we enjoyed the rest of the article. It’s interesting how much clout Fred Anderson wields. Few CFOs are invited to sit on other corporate boards, or get asked to do speaking engagements such as this, but as we said in the beginning of this piece, when Fred Anderson speaks, people listen.