Friday, January 11, 2013

The Idiocy of Apple

Eric Schulz
Eric Schulz
Everyone thinks that Apple is brilliant. Phooey. What kind of genius company takes their best-selling products and discontinues them, introducing an upgrade virtually every year?  Apple! Did the world really need an iPhone 2, iPhone 3, iPhone 4, iPhone 5; iPad, iPad 2, The New iPad, mini iPad? Did they ask for an iPod, iPod mini, iPod Touch, or an iPod Shuffle? Not only did the world need these upgrades; they demanded them!

Apple IS brilliant. They understand the importance of innovation, of having a healthy dissatisfaction for the status quo. Apple has an inbred DNA that says, “we can do better," and then goes out and does it.

Look at the personal music player business segment. For decades, SONY dominated the market with its Walkman, first introduced in 1979. They did very little innovation to the product. Every five years, from 1979 to 1999, they celebrated their anniversary with a new cassette model introduced on July 1. Every FIVE years! 

In 2001, Apple introduced the first iPod, using digital storage instead of cassettes or CD’s. They introduced the iTunes store from which customers could acquire their music. And instantly, the Walkman was dead.

By all rights, SONY should be the dominant player in personal music. They had worldwide domination of the category with their players. But they didn’t do what Apple did—innovate, and vertically integrate. Instead of saying, “lets sell a new digital music player," Apple said “lets sell music AND a digital music player, and an online storage vault for our customers to store their music and download onto other Apple devices.” Game over. Apple won. And what is sometimes lost in this history is that at the time of Apple’s move into music, it was a struggling computer company that was popular only in the graphic-designers market. 

It’s been said that courage is the willingness to innovate when you don’t have to. It’s easy to change when your business is on the rocks, but when things are going well, it takes real courage to say, “let’s make it better." Studies have shown that companies that have innovation as part of their primary business model average more than15% profit margins, the highest in most industries. Why? Because they are in tune with their customer needs, constantly working to improve and make their products even better and more relevant to their customer's changing needs. The SONY example clearly shows that when you are self-satisfied and stand-still, that’s when you are most vulnerable, as somebody will surely come from behind and run you over, and you likely won’t even see it coming. Every business should learn from Apple, and start working on an innovation pipeline and begin hiring innovation managers to lead their new initiatives.