*** From the Archives ***

This article is from June 29, 2007, and is no longer current.

Apple Computer, the Little Engine that Could

Here’s a piece of news you already know: The iPhone debuts today. And although it will take weeks or months to determine the device’s true strengths and weaknesses, the phone/camera/browser/music player/fashion accessory is already an unmitigated success. The lines at AT&T stores began earlier this week, the newspapers and blogs have been reporting on iPhone mania, and the mavens and early adopters are satiated after having salivated for weeks. Even before its release, the iPhone was the product to beat and nothing short of complete product failure will make it anything less.

It’s no surprise. The iPhone follows Apple’s trusted strategy: Find out what people want and what’s lacking in the market, and fill the need elegantly with a product that looks like its fourth generation right out of the gate. It’s called innovation.

The iPhone isn’t even the best example of Apple’s banking on innovation. When Apple introduced the now-ubiquitous iPod, it didn’t just release a new music player, it also created iTunes, introduced the $99 downloadable song, gave new meaning to the word “shuffle,” introduced the digital play list, and signaled the beginning of the end of the $18 CD. In one sweeping product announcement, the company redefined the music experience, from purchasing to storing to listening to sharing.

You may recall that all these elements were in the marketplace already. Microsoft and others had media players that stored and sorted music, there were a slew of portable MP3 players hanging around the necks of joggers, and you could even buy music online. But nobody had stitched all these elements together seamlessly, caught the imagination of the world, and made the entire caboodle as easy to use as a song.

While other companies were talking about synergy, digital convergence, and paradigm shifts, Jobs and Co. envisioned the possibilities — the “what if” from a consumer’s point of view — and then marshaled the technical, business, and marketing prowess to create a solution that could span the boardrooms of media conglomerates to the living rooms of music enthusiasts. And Apple didn’t rest on its laurels. It followed up with improved iPods, the Nano and Shuffle, and now it’s leveraging its market position to venture into television and video downloads.

The iPhone, again, is a category maker because it’s the first device perceived as a handheld multimedia device. Multi-function phones were a dime a dozen the day before the iPhone’s release. But the iPhone creates that “aha!” moment in the minds of consumers that instantly sets it apart and creates market demand.

Even in the mundane world of operating systems, Apple somehow has a way of making things sexy. Come this autumn, Apple will release Leopard, the latest version of Mac OS X. It’s four months prior to the release and already Leopard is a top-ten seller on Amazon. Microsoft, by comparison, was reduced to force-feeding its new Windows Vista (Home Premium upgrade #112 on Amazon) down the throats of computer makers to ensure consumer adoption.

In contrast, Apple doesn’t believe in incremental milquetoast updates (though it does a very good job of improving its product line). It is a bold innovator, a product launcher, a segment creator.

That’s not to say the company’s products don’t have problems from time to time; consider the history of the MacBook screens, AC adapters, iPod batteries. And the company itself can be secretive, monopolistic, and paranoid. But, hey, it’s a corporation. In the big picture, Apple has spawned a mini-industry around the iPod and no doubt new industries will surround the iPhone as well.

Follow the Leader

What makes Apple’s success so remarkable is its rarity. Global corporations have difficulty looking beyond quarterly profits and market share protection. Even those companies willing to invest the human and financial capital needed to innovate often don’t have the gumption to take great leaps of faith. We are suffering a paucity of corporate innovation to the detriment of us all.

The $64,000 question is this: Why aren’t more corporations and industries as innovative as Apple? And there’s a $64 trillion question, too: What would the global economy look like if they were?
Imagine if GM, Ford, and Chrysler applied the same insatiable desire for innovation to automobiles. (With its advanced hybrid technology, Toyota is a clear exception to the rule.) You think we’d still be gas-guzzling tanks? No way, we’d all be zipping along in cars that get 75 miles to the gallon. Maybe we’d even be willing to buy these cars at a premium — just as we buy Macs and iPods for 20% to 100% more than competing products.

Imagine if oil and gas corporations realized they were in the energy business, not the drilling business, and they championed solar power and alternative energies? We could save billions of dollars and reduce our dependence on non-renewable energy. These companies, meanwhile, could expand their product lines beyond the tank of gas.

The world is globalizing, with manufacturing and service sectors concentrating in countries with low labor costs. Western countries can’t stop these tidal waves with protectionism and protests. Our best hope is to compete with brilliant ideas.

And so, the next time a CEO shrugs his shoulders or an average citizen berates a worker in Bangalore or Shanghai, challenge them to create something greater than themselves, to dedicate themselves to being the very first or the very best, to dream of something big and deliver it.

If that someone says it can’t be done, that it’s too late, that the competition is too fierce, pull out your iPhone or iPod and play for him or her your favorite song out of the thousands you have stored, and talk about Apple Computer, the little engine that could.

Eric is an award-winning producer, screenwriter, author and former journalist. He wrote the script and co-produced the feature film SUPREMACY, starring Danny Glover, Anson Mount, Joe Anderson and Academy-Award-winner Mahershali Ali. As founder and president of Sleeperwave Films, Eric relies on his unique background to develop film commercial films around contemporary social issues. As a seasoned storyteller, Eric also coaches corporate executives on creating and delivering compelling presentations. He has written thought leadership materials for entertainment and technology companies, such as Cisco, Apple, Lucasfilm and others.
  • anonymous says:

    Eric Adams suggests that if GM, Ford, etc. were like Apple, cars would get 75 miles to the gallon. He’s forgotten that Apple is a niche player in the tech market; Microsoft is more like a GM equivalent, and there are niche players in the auto market making cars that get 75 MPG, but most people don’t pay half the attention to them that the do to Apple. Why? I think it says something important about the different nature of the two markets, and why the Apple model is not universally applicable.

  • Terri Stone says:

    Interesting point, peterj! Do you think that niche players can ultimately change the marketplace by influencing the big guns?

    Terri Stone

  • chasf says:

    …and industrial economics is NOT what you know. We can tell that, not just from your (considerable) resume, but from your prescriptions in energy. It’s ok to be green and I sure hope all the economy can go that way, but your not going to get green solutions from ignorance of market forces. And, yes, to the poster who talked about niche players influencing the market: That is the ONLY way paragims shift as radically as we’d like in renewable energy. It will not happen from the top down and it will not happen if Exxon et al lose their shirts chasing after wind power etc., which are FAR more unreliable and expensive solutions than drilling in the ground.

  • anonymous says:

    Holy cow, what a load of crap. If you mean innovation in bloviation, hype and promotion then you got it right. Apple may be designed to be the cutest thing out there but the bottom line doesn’t deliver, especially the ipod and now the insanely over rated phone. Ipod is geat, so long as you love apple bought music and format. Iphone super, so long as you don’t actually need to make a call.

  • anonymous says:

    They may finally have their industrial design right, but Apple no longer caters to the professional sector. As someone who actually uses Apple computers for business, I resent their artificially inflated prices and self-important image. Here’s the line that gets me: “In contrast, Apple doesn’t believe in incremental milquetoast updates.” Right. Which is why I have to buy a new version of OSX every year. *Sigh* There are some things Apple can learn from other corporations.

  • >