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-   -   Apple & Honda: Once great companies, losing the edge? (https://www.team-bhp.com/forum/shifting-gears/200216-apple-honda-once-great-companies-losing-edge.html)

Honda was once the master of tech & reliability. In the 90s, they came out with the hallowed Vtec technology that every high-revving enthusiast loved. Their cars were phenomenally durable too. Today, Honda has lost the plot in technology. Heck, they took so many years just to bring a simple diesel engine to India. And whatever else you see - dual clutch ATs, turbo-charged direct injection petrols, hybrids etc - it's all from the competitors. Quality? Well, who would have ever thought a thread like this or a cheap dashboard like this in a Honda? IMHO, the company is a shadow of its former self today.

I see a similar thing happening with Apple. We saw top quality innovation after innovation (iPod, iTunes music store, iPad, iPhone etc.), but the company is losing its edge IMHO. Yes, I am well aware of their tremendous revenues, market cap & iPhone sales. But I'm talking of stuff like the current Macbook Pro disaster, the Apple Maps debacle, Apple Music's lukewarm service compared to Spotify, batterygate last year & more. What real innovation has Apple done after the iPhone? They say Alexa & Google Assistant are making more progress than Siri, and that Google & Amazon are both stronger in the AI race than Apple.

What's up with these companies? They are still great today, but at one time, they were AWESOME.

Well, if I may.. I'd rather have Sony and Honda as the two companies on the same boat. Apple copied everything from Sony anyway.. their camera sensors were made by Sony, their iPhone was copied from a long shelved Walkman Touch music player, they poached engineers from Sony in Japan and Apple also copied IBM for the laptop, Xerox company for the GUI software and they also went after Microsoft for plagiarism when in fact they had outsourced the entire computer OS design to Microsoft. These two companies are so apt because both are traditionally Japanese though with a lot of American influence.

Sony is still a terrific company though.. thanks primarily due to the fact that their American and European HQ's handling all the R&D, product design and marketing. Even in phones Samsung and Apple have shamelessly copied Sony's innovations of 1) First waterproof flagship Android phone 2) First android with a 1080p screen 3) First and ONLY Android with a 4K screen 4) First Android with 12MP, 16MP and 21MP camera sensors and 4) First flagship with super slow-motion recording (and still the boss with 960 fps). Their lowering sales are perhaps an indication of the world considering it too old, or not considering it a name enough that it resonates with them.

Both have taken the worst hit thanks to their half-cousins in South Korea (yes, they are genetically related). Samsung came in, combined with Sony in lean-manufacturing television panels, but undercut Sony on price ever so slightly and captured market-share quickly, they churned out one Galaxy series after another (though made in the cheapest plastic possible atleast till S3), undercut their rivals on price and took over their JV display panel manufacturing from Sony (which had done all the R&D and innovations for them). Sony moved on to outsourcing panels from Foxconn and Sharp Japan but was never the same as Samsung took over.

The same with Hyundai, though Hyundai and Honda always had a rivalry and no JV. Hyundai a ship-builder and steel company decided to gamble its fortunes on car-making and I guess they never looked back because of their quick-footedness and opening R&D and design facilities in Germany, America and India.. which resulted in an explosion in sales their three key markets of North America, Europe and Asia. South Korean companies invest much too heavily.. and it pays off. Samsung has taken over Harman and now they own the luxury music system market for cars be it Infinity, Harman, JBL or the flagship Bang & Olufsen.

I guess its a cycle, one day the Chinese might take over production of everything from the entire world and make the current brands seem passe. In a way I had to type this because a) I'm a fan of Sony and b) I'm a fan of Hyundai. I think the relation between both countries should be looked at in a way that they both inspired, influenced and outperformed each other and the world benefited in terms of technology. Neither is lesser than the other and their respective successes are just a phase until the next kicks in.

Totally unfair! How can you forget the iPhone X notch? :uncontrol



On a more serious note, you can measure the innovation intent of a company by looking at its R&D spend as a percentage of revenues. However, more R&D spend does not necessarily result in new earth shattering innovations all the time though. But it shows that the company is not slacking off.





Compared to Samsung, Apple's R&D spend as a percentage of revenues is quite low.

Honda ranks 19th in the top 20 list behind Ford, GM, Toyota and VW. But as a percentage of revenues, Honda's R&D spend at 4.9% seems reasonable.

Source:
2017 Global Innovation Study by PwC
https://www.strategyand.pwc.com/innovation1000

I dont think its right to compare Samsung with Apple. Samsung works in lot of areas from display to chips to wireless network tech and lot more. They need to spend on R&D. Also, R&D spend is proportional to the number of people working. With varied interests, there would be lots of people working in R&D.
Apple is not really entrenched in that many areas. They dont need to have too many people and hence the lower spend.

Agree with Honda though. They take too much time and are risk averse. Again the number of people and number of cars/models will show lesser spend.

Oh, the simple answer is they are content right now. That's enough to make them ordinary.

Having spent most of my life in product companies, I know this simple fact. Best innovation comes out when the company is fighting to survive. And innovative companies know this too well.

For example, consider Minnesota Mining and Manufacturing Company. I am sure you all have heard of it. No? Of course, you have. You only know it as 3M. They also know the simple fact I mentioned above. So they have a rule to artificially induce this fight for survival. Every business unit within 3M must generate 30% of their revenue from the products developed in the last 4 years. In other words, they are not allowed to rest on their past performances.

Companies that don't follow some variation of the above formula never really become or stay innovative. That is because innovation comes at a great cost, generally known as R&D cost. And the management can often come up with reasons to reduce R&D, in order to improve short term profits, to boost the stock prices and their bonuses.

Great innovations are also associated with spectacular failures. No gain without pain. It could be as high as 90% failures, in the hope that the 10% will blow away the competition. I am talking about new products, and not incremental R&D on improving existing products. This is another reason why successful companies often stop taking big risks. On the other hand, companies that have continuously fight to keep their edge, keep on innovating by taking huge risks. Top tech companies like Amazon and Google are good examples of this. Top managements that don't have the stomach for failure, never really nurture any innovation.

Now let's consider Apple. They came up with iMac, iPod, iPhone and iPad between 1998-2010. Then Steve Jobs passed away in 2011. Since 2010, iPad and iPhone are now available in different colors. Not a single new product has been introduced. An extremely risk taking Steve Jobs was succeeded by a risk averse Tim Cook, who just wants to keep shareholders happy. There is no fight or hunger for defining the future like Steve Jobs did.

What about Honda? Back in 2015, I had the fortune of getting the answer right from the Honda CEO.
I remember wondering about this answer. He didn't say the motorsports R&D can feed into making better Honda cars. Which means they are not focused on channeling the know-how from the F1 engine development into their consumer products. It is merely a hobby for their engineers and a branding exercise. This is an example of spending on R&D and not using the output. It does happen a lot in companies with dysfunctional strategy. They are also risk averse (no innovation) and cutting corners (recent Indian cars).

I beg to disagree. Honda's were never the paragon of build quality in that they never had heavy doors or softest plastics like European cars but when it came to durability mechanically, there are hardly any equals in the Indian context and its true even today. The 1.5 petrol is a jewel of a motor still, plenty powerful and fuel efficient at the same time and long lasting, the 1.5 diesel even though noisy is reasonably powerful and very efficient at the same time. Also, there is no comparison between Honda's international product portfolio and what they sell in India. Look at the new Civic which is an incredibly well rounded product for the price and in Type R form is the fastest front wheel drive production car around the 'Ring, the new Accord and the NSX. I don't see where they are loosing the edge. It may be true to a certain extent in India but I am assuming you are not just talking Indian context.

Again I am not entirely sure. Apple music launched in June 2015 while Spotify started in October 2008 and Apple Music is already the second biggest in terms of subscribers and unlike Spotify they do not have free subscription. Not only that, Apple Music is set to surpass Spotify in the USA, their biggest market.
https://www.theverge.com/2018/2/4/16...us-subscribers

Innovation is not only what you can see, its also what you cannot see. Apple leapfrogged the whole industry which was and is still using the vanilla chips from Qualcomm with a first 64 bit cpu in a mobile phone and everyone in the industry knew how big a deal it was. Their chips are still atleast a couple of years ahead in performance compared to the best from Qualcomm.

The innovation also comes from the fact of how they make any technology so easy to work with. Touch ID vs Galaxy S5 fingerprint anyone? Face ID which is a kinect like system in a phone used for authentication for everything from payments to your passwords? Dual camera's (i know they are not the first one's to do it, but they are the first one to do it right so much so that everyone followed), NVMe (SSD) based storage in a phone starting from iPhone 6s, 3D Touch which is yet to be replicated in another phone (surprising since Android tries to do it in software and given how other OEM's always jump on to features that Apple has in their phones going so far as to include a notch in the display without the associated functionality), smaller things such as linear oscillator aka taptic engine without which it would have been impossible to implement 3D Touch interactions such as when an icon does not have 3d touch menu and the system lets you know via some very quick spaced vibrations (which are impossible to do in a vibration motors that most smartphones came with) and the taptic responses throughout the system in iPhone 7 onward. The new iPhone X uses the same engine in almost all areas of the operating system and you need to use one to appreciate how nuanced and subtle these taptic responses are. Apple is also the first company which in one announcement made Augmented reality mainstream with the introduction of the ARKit last year which supports phones as far back as iPhone 6s. Apple also started the high frame rate video feature in phones starting with iPhone 6 while Android flagships still have arbitrary limitations on how long you can record a video. Do you know that the latest and greatest Galaxy S9 cannot record a 4k video for more than 5 minutes at a time, something which the iPhone 6s has been doing without limit ever since its launch!

https://mashable.com/2018/03/02/ipho.../#QSgizxK4qiq8

Then is the security - iPhone was doing hardware encryption since the 3GS days while Android was still grappling with performance issues after encryption in 2015
https://www.theverge.com/2015/3/3/81...on-performance

The fact that all processing for tagging your photos for objects or faces etc happens on your iPhone and not on their servers like Google. They are behind in AI for sure but that is not because they do not have the technology but because they do not mine personal data or their users or profile their users to the extent google does. Some even go so far as to say that Android is a glorified data mining software.
http://www.chicagotribune.com/bluesk...605-story.html

https://www.gizmodo.com.au/2018/02/w...still-matters/

As for Apple Maps, the article below explains that and more. Again the central theme is privacy.
https://techcrunch.com/2018/06/29/ap...the-ground-up/

There is also industrial design which figures high in Apple's scheme of things so much so that iPhone X is more beautiful inside than it is outside. The Galaxy S9 still cannot get all its port and buttons aligned.

https://www.ifixit.com/Teardown/iPhone+X+Teardown/98975

Industrial design is also one of the reason Apple would never comes up with a so called bezel less design like Samsung with Galaxy S8 which has a chin at the bottom and at the top and curves on the sides of the display (which by the way are detrimental to use experience given the reflection of light) to given an illusion of no bezels. So what does Apple do in iPhone X to make it bezel less - they fold the oled display inside the phone so that the display controller can be placed there to have a uniform screen. There is no company yet on the planet which has this attention to details and one which is willing to go the distance to make sure that they do.

https://www.quora.com/Why-is-OLED-di...-at-the-bottom

I can come up with numerous others genius's in other Apple products but I think I have made my point.

I know the recent MacBook Pro throttling issues (Core i9 in a thin and light chassis is a really bad idea and there is no thin and light laptop with Core i9 that does not throttle) and its disappointing because Apple ought to know better because they are Apple. It will be interesting to see what their response to this would be.

Since most of the points of argument have been discussed greatly above I would keep it short.


I agree with GTO on the topic of Apple, the company has surely lost its charm, the sheer determination for innovation they had while under the leadership of Jobs is simply no more. As pointed out above, they have simply got content with their past achievements and are only looking forward to sustaining their market rather than expanding it.

Here are two amazing videos giving a brief but outstanding explaination on Apple's decline-
https://youtu.be/Xp4ypElIp2M


https://youtu.be/b-DWMxh-QJc


The same cannot be said for Honda. In my opinion it's the Indian branch of the automobile giant that has failed to keep up with increasing competition and providing value for money products without compromising on the quality. It's international portfolio is still pretty amazing.

ah yes, 3M and its 30% rule. What seems to be unique about 3M is that they push their country subsidiaries to innovate too. That is, 3M India is constantly looking for (local) problems to solve. This interview gives an insight into 3M culture:

For 3M, R&D is investment (not cost)
https://www.livemint.com/Companies/N...-Khandpur.html

As a Honda owner and a former fan, I have to agree. Honda internationally is just mediocre and the Indian arm is plain bad.
I chose the the City four years ago and now have to deal with it's pathetic build quality, bad and expensive ASS and arrogant company.
Horrible paint quality, bad fit and finish, paper thin sheet metal , rattling interior and crappy electronics are not the issues one would expect from a car that's still under 30K.
And did I mention how overpriced their cars are?

You may, but unfortunately - even Honda wont agree with your disagreement.

Takahiro Hachigo, CEO of Honda Motor Company went on record in 2017 admitting this very fact - "There is no doubt we lost out mojo - our way as an engineering company that made Honda Honda."

You can read more about it in a extensive article published by the Reuters here - https://www.reuters.com/article/us-h...-idUSKCN1BI18J

True about the new Civic - but the last generation was so lack lacklustre that it was heavily criticised by Consumer Reports and Honda had to go back to the drawing board. They even skipped that generation Civic for many international markets due to this issue.

The above reports has documented the frustrations of the engineers who worked on the previous Civic program and were forced to make big compromises in the name of cost-cutting. Thankfully, the current generation - born out of the backlash of this failure - is a much better car overall - deserving the Honda badge.

The only real highlight left in the Indian market. I would also include the 1.5 diesel + CVT combination that has debuted in the Amaze.

That said - this combination only forms a fraction of the products they offer in the Indian market. Not a patch on the Honda that used to rule the market with every segment they participated in - be it with the City, Civic, Accord and even CRV at one point.

So Honda gave VTEC and Apple gave ipod, iphone some years back and now they don't live up to it? please:

First of all, the VTEC isn't that big a deal. Alright, even if you worshipped the VTEC, try the new Civic Type R or NSX. Too bad if you are in India though.

Has Apple lost its sheen? That topic has been beaten to death on the internet.

Well!! That's also copied from the Essential phone.

A lot of valid arguments on the decline of innovation in Honda and Apple!

Many articles and reviewers call Hyundai as the New Honda! May be an exaggeration, but this just goes on to say that Honda does not have a strong USP anymore. They had their sweet engines and gearboxes as one of their main selling points, they still do. But competition has also caught up.

And the most concerning aspect is that Honda does not have seem to be the leader or innovator in electric or autonomous cars, which seem to the next big thing.

Like wise, Apple today seems to be Hardware company rather than a tech company. Make no mistake, the iPhones are one of the best smartphones currently being sold. I have 4 Apple devices at home and no android. And I love the interface to every bit.

But as a company, they are too reliant on their iPhones and are too dependent on the premium it commands. They do not seem to innovate like Google or Amazon. Google has Maps and Gmail, something that every smartphone user is signed up with. And they have so much more coming in, right from wearable tech and much more. Whereas Apple seems to be stuck to its formula of releasing 2 new iPhones every year plus the years iOS update.
When tablets are slowing down and phone markets are being increasingly split between niche brands like one plus etc, it is a very dangerous place the Apple is in.

They have to evolve to be a tech company and not just be a phone maker. I wish they do make that transition, at least for people like me who cannot do without their iPhones!

Agreed. Both Apple and Honda are not what they once used to be. Probably in a race to survive, they have tried to slot themselves somewhere between mass and niche, rather than the niche they once catered too. More specifically, Apple. Probably the revenues of mass market players like Maruti/ Hyundai (vs. Honda) and Samsung (vs. Apple) compel them to shift their focus from the class to mass.

Honda scoffed at petrol Direct injection & turbo's and Dsg's. Man maximum machine minimum is what they've achieved in the last 25 odd years past the pinnacle of their Vtec technology. They even said diesel and 2 strokes is dirty filthy etc, end result a self proclaimed engine tech company just watched the competition leap ahead with R&D centres in Germany.

Why fix something if ain't broke mantra doesn't always work. Kaizen is definitely being pursued by the other big 3 in Japan. Honda seems to be stuck with cabin improvement features & future concept cars, with 90% of the USP found in.... you guessed it, cabin space.