Inspiration from the making of Apple products.
We can learn a lot from Apple. We would all do well to take a close look at how this company has been changing the game of making and delivering successful products to the marketplace over and over again. From idea to supply chain, no one’s doing it any better than Apple. I’d be asking myself, when was the last time WE acted on a creative idea? And, “Game” aside, when was the last time WE changed or improved our product dramatically? Think back to the 80s. Did anyone expect the company that introduced the little 9-inch screen Macintosh would later find fame and fortune in both music and mobile technology? Open your mind to a different way of thinking for a few minutes as I highlight some of Apples’ doings. I think inspiration abounds, and of course relevance is rarely lost on me. How about you?
First, the News
Earlier this month, Apple Inc. (AAPL) surpassed Exxon Mobil Corp. (XOM) to seize the title of world’s most valuable company ($337.2 b). A little more than a year ago Apple merrily skipped passed Microsoft as the world’s most valuable tech company. Valuation at the time: $222 billion. Keep in mind as well, since 1997, after Steve Jobs regained control of the company he founded (with Steve Wosniak) Apple shares have increased 110-fold. Last week, the world heard the sudden but perhaps unsurprising news of his resignation as Apple’s CEO—presumably due to his ongoing health issues. Jobs’ resignation created a flurry of talk about the iconic leader and the extraordinary successes of the unparalleled company he founded in 1976. The reports will no doubt continue, and the world will eat them up for sure. I hope you do as well—I believe there’s much to learn from the making of Apple products.
To win the game, change the rules
Ostensibly, Apple seems to do well—at whatever they choose to do—every time. No matter what category they enter. And, as its former tagline “Think Different” suggests, they actually do. For example, Apple didn’t invent downloadable music or the online music store. But it did change the game of the entire music industry with a product that simply improved the way people accessed music. They don’t make music, they made it fun and fashionable to stream other people’s music.
Apple also changed the way we think about mobile phones. The convergence of voice, video, and data into a sleek pocket device caused sweeping change to the telecom industry. And, once again, Apple did it with a product that merely (but very creatively) leveraged existing channels. The iPhone is a controller with a graphical user interface (GUI) not unlike their first computers. The brilliance of the product is how it leverages other people’s established services without controlling the service, or investing in the carriers that provide the service. The user “wow” factor is included free of charge. Josh Bernoff of Forrester Research offers this insightful big picture view, “Apple doesn’t make flash memory, microprocessors, touchscreens, or, for the most part, Web sites. It just puts them all together. Profit margin comes from assembling commodities in a fantastic, must-have package.” I wonder what they could do with a toaster?
And let’s not for forget
Apple has wowed the world with so many innovations it’s easy to forget. The mouse device you’re probably using right now and the windows you’re likely peering through on your PC—things that we take for granted—are just some of the many things brought to us first, by Apple.
Scroll forward to 1998, a year after Jobs returned to Apple Computer after being ousted from the company. Apple was struggling, trying to recover from its former, perilous leadership and—thank goodness for the company’s consistently famous advertising—the world was getting to know the new (anti-beige, multi-colored) iMac. Grand Pooh-Bah, Bill Gates sniped sarcastically, “The one thing Apple’s providing now is leadership in colors … it won’t take long for [Microsoft] to catch up with that, I don’t think.” Later that same year the iMac was inducted into the permanent collection at MOMA (Museum of Modern Art).
When you’ve outpaced your company name, change it too
When does the very name of your company begin to limit what you can do? Even Apple could not envision a future beyond the computer, as revolutionary as the Macintosh was in 1987. So in 2007, after 30 years as Apple Computer, Inc., the company removed the word “Computer” from its name to reflect the company’s ongoing expansion into the consumer electronics market. Not coincidentally, Apple’s iTunes, an upstart digital music store born in 2003 was already halfway to becoming the world’s largest music retailer.
Apple is a niche company by intent
Niche does not mean small, just particular.
Part of what makes a great product is demand. To make it sustainable you have to make a profit or it’s not worth doing. Apple hasn’t always had successful products (Newton, 1998) but it learned from its mistakes and it always sold its products at a premium with no direct discounting—ever. They decided early on they didn’t want the higher volume, price-driven corporate market segment. The company was always content making relatively few products, given their size, including desktop and laptop computers, a small range of music devices, a mobile phone, and now a tablet. The brand captures a surprisingly small 15 or so percent of market share (measured by computer sales) in the U.S.
Differentiation by fanatical design (and expert manufacturing)
How difficult has it been for you to differentiate your company successfully? Consider how crowded and cutthroat the consumer electronics industry is on any given day. Apple products, if for nothing else, are known for their flawless detail (design) and ease of use (function). You could say Apple is obsessed with design and detail. But it’s in that pursuit of perfection, and value for the aesthetic, which differentiates each Apple product from the crowd. From what I’ve experienced, I would call it, state-of-the-art.
If you have not seen the promotional video for the making of the MacBook it’s worth a gander.
Apple engineers their products by demanding fanatical tolerances—specs that regularly make their manufacturing partners squirm. Co-founder, Steve Wozniak says Jobs operates not with shrewd design sense but with stunning business acumen. He hired Tim Cook to head manufacturing and strengthen the company’ bottom line. Cook cleaned up Apple’s supply chain by pulling the company out of manufacturing, closing factories and warehouses and moving instead to contract suppliers and manufacturers. His streamlining efforts helped the company reduce inventory levels, increase margins and build the extraordinary wealth Apple possesses today.
Tim Cook was hired in 1998; named chief operating officer by 2005 and will now replace Jobs as CEO.
HIT Solutions believes the more your business keeps up with important trends, the more you will improve your product, and improve your bottom line.
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