Apple’s Tradeoff between Focus and Stagnation related to Business Innovation

On my Tech blog in June 2013 I wrote about new Apple product announcements and the need for updates for previously released Apple products. Colin Donnell just wrote a blog post on this same topic with the title “The products Apple doesn’t have time to improve.” Colin’s point was to highlight the dilemma that much of the appeal of Apple’s well designed products is their focus but that it is also disappointing when it results in lack of follow-through as their focus changes. His first example is Safari extensions and the web sites promoting them. A better example of a product justifying more focus and priority, which he mentions in passing at the end, is iPhoto especially on the Mac. The recent development of offering iLife and iWork for free could be cause for continued concern if this becomes a rationale for even less focus on these more important personal and business products. It seems to me like Apple is neglecting ongoing evolution of software products as a critical success factor.

A point I made in my June post is that this dilemma is also associated with Apple’s culture with regards to secrecy and partnerships. One possible solution is to subcontract work to third party developers on products that have recently been determined to be noncore (i.e. not of a high enough priority to receive consistent attention and updates). Rather than let the products stagnate they could continue to evolve and be supported under Apple’s guidance or independently. This could involve business model innovation with regards to information sharing and providing a rewarding incentive for partners to support the platform.

Top Products

Walter Mosberg of the Wall Street Journal wrote his last article for that publication today. He last article provided his view of the top 12 influential tech products. Five out of twelve of the products are from Apple (in chronological order):

  • Newton MessagePad (1993)
  • iPod (2001)
  • iPhone (2007)
  • MacBook Air (2008)
  • iPad (2010)
  • These products were mixed in with products like Windows 95, Google search, FaceBook and Twitter so it is a nice little historical summary of major tech milestones in the last few years.

    Walter’s criteria for influential tech products were:

  • Products had to improve ease of use and add value for average consumers
  • Products that changed the course of digital history by influencing the products and services that followed, or by changing the way people lived and worked.
  • Steve Jobs achieved his objective of putting a dent in the universe (or at least our solar system). He doesn’t get credit for the Newton because he wasn’t in favour of it and eventually killed it. It was the one influential product that wasn’t a commercial success.

    Apple Design is not Infallible

    David Pogue has nicely summarized (Pogue’s Post:One of Apple’s Best Ideas Ever — Made Worse) an inexplicable design faux pas (mistake) by Apple. It is understandable that they had to change the MagSafe power cord connection to make it thinner to match the thinner laptops. Some other computers have some ghastly connectors that distort the computer case by creating ungainly bulges.

    Lenova IdeaPad U310 with full size Ethernet connector

    Apple would never do that but why did they go back to the T design and misjudge the strength of magnet required?

    Apple T design MagSafe power connector beside USB connector

    In their product videos they brag about the level of research into magnets they have done. Power cord connection seems to be a problem area for Apple because they went through a period a few years ago where they had to replace power cords which were malfunctioning where they connect to the computer.

    Malfunctioning Apple MagSafe power cords

    They previously replaced the T design with a more streamlined, less cord strain, and less prone to bumping L design.

    Apple L design MagSafe power connector

    Did anyone complain about the L design power cords? So why did they go back to the T design? It is bad enough that many people will have to buy adapters to use their old power cords but it might necessary to buy more power cords again if and when Apple goes back to a thinner version of the version 2 L design as they should.

    Here is hoping that Apple does it right when they introduce a new dock connector for iPhone 5.

    Possible iPhone 5 smaller connector (bottom) Possible adapter for iPhone 5 connector

    Network Effect Favours Information Monopolies

    The Wall Street Journal has an article on the reliance we have on large information technology monopolies that have grown from the network effect of the Internet. The ubiquity of the Internet allows people to easily gravitate to the biggest and best online services which create monopolies that will fight to exist long past their usefulness and competitiveness. The key issue is not necessarily that monopolies tend to get created but whether there is enough competition to keep them honest and whether they will be replaced quickly when they are no longer competitive. The outlook could be more hopeful than suggested in the article as there are examples of once large services that have been replaced relatively quickly. Two that come to mind are Myspace and Yahoo. The examples used in the article like Google, Facebook, and Twitter while having monopoly characteristics in their domains haven’t been around for that long, don’t yet have competitors that can offer a compelling alternative, and haven’t yet established long term business models in key aspects of their business. Stating that there might be a danger of them becoming too powerful or outliving their usefulness could be a bit premature at this stage of their lifecycle.

    Periodic assessments of market competition are important to keep in mind, however, because there is a danger of large players abusing power. Consumers need to be aware of the potential monsters they could be creating if they join the bandwagon and thereby limit their alternatives. The best way to avoid service complacency and abuse is healthy competition. Think of every transaction whether it be attention, information, purchase or subscription as voting with your dollars.

    Honda has designed a new unicycle robot

    Honda has designed and demonstrated a new unicycle that is similar to the Segway for people who want to sit down instead of stand up. The design is impressive in how it works, simplicity of use, and compactness. What remains to be seen is how much it costs, when it will be available, and whether they can increase the battery life beyond the one hour currently specified. As a benchmark the Segway X2 has a range of 19 km and a top speed (20km/h) that is twice that of the Honda unicycle. Prices for different models of Segway vary but are approximately in the range of $5,000 to $7,000.

    Erring on the side of Happiness

    One of the great things about being in business for yourself is creating the opportunity to do business your way. Common Craft is a creative explanation business that has decided that their business philosophy is Erring on the side of Happiness.

    This is a counterpoint to the view that you don’t really have a business at all if you aren’t building and growing it to operate (or sell) independent of your involvement. Both views have their merits but the important thing is to make the choices that are right for you.

    A documented company purpose, beyond making money, can help provide guidance when making these decisions.

    Apple Innovation

    skitched-20100224-140129.jpg

    At the end of the day, I know it’s a cliche, but people are our most important asset in the world by far. It’s people who deliver innovation. We are the most focused company that I know of or have read of or have any knowledge of. We say no to good ideas every day. We say no to great ideas in order to keep the amount of things we focus on very small in number so that we can put enormous energy behind the ones we do choose.

    Apple COO Tim Cook

    Excerpt from Dan Frommer’s full interview with Tim Cook at the Goldman Tech conference February 2010.

    Why you should care about business models

    Most consumers don’t know and don’t care about the business models underlying the products they buy because, let’s face it, life is complicated enough and bottom line what really matters to most people is just the availability, quality, and price of the product they buy. People should care about business models, however, because they affect the profitability of different enterprises in the supply chain and their ability to provide value or even exist. This eventually does impact availability, quality, and price if the enterprises affected were providing value.

    Charlie Stross provides a book publishing business model supply chain explanation on his blog. It explains what is behind the fight between Amazon and MacMillan that casts a light on who are the good guys and bad guys in this dispute. Without being informed, consumers might tend to side with Amazon who positions the fight as Amazon standing up for consumers to bring a consistent low price for products. Once there is an understanding the business model and supply chain a different perspective can emerge that the battle is really about roles, control, and who gets what portion of the profit. It also exposes what is at stake in the ability for market forces to operate vs. an enterprise exercising monopoly like control. Consumers might actually have an opinion over which enterprises can provide best value in a role and would like choice with free competition. Even if an enterprise professes to be a benevolent dictator (e.g. do no evil) my vote is for the distributed power of letting the market decide availability, quality, and price by consumers voting democratically with their dollars. There may be a temptation for just going for the lowest offered price but without understanding the business model implications there is a real danger of creating unforeseen consequences by putting portions of the value chain out of business.

    In Canada, another example of a business model battle that has gone public, is the TV distributors vs. the local TV content providers. The content providers business model has changed and they can no longer remain profitable with advertising so they want payments for their content from TV distributors. The TV distributors (e.g. Bell ExpressVu and Rogers cable) pay for other content from the US but don’t want to pay for local content. They are positioning these proposed local content payments as a tax that has to be passed through to consumers. A public relations battle is taking place to see if and how the business model will be changed.

    Business models are also important for workers who are increasingly concerned about the viability of their jobs. It may be tempting to think that viability of a company’s business model can be left to the CEO or marketing department but ultimately workers need to make informed decisions about where they work and the industry where they earn their livelihood. This needs to be based on an “eyes wide open” view of where their employer and industry fits into the supply chain, what value they provide, and is the business model structured to reward that value. The world is getting more complicated by the emergence of innovative and complex business models but this is the reality of the brave new world of opportunities and risks.

    Microsoft Innovation

    Dick Bass on Microsoft’s lack of Innovation

    A critique from a former Microsoft VP about Microsoft issues with innovation shows that even with huge resources, talented people, and world class research, cultural roadblocks and internal competition can severely impede successful delivery of innovation.

    Official Microsoft Response

    Surprisingly, as John Gruber noted, Microsoft officially responded without refuting any of the points made. Their main arguments are that their objective is success on a large scale, that it is difficult, and it takes time sound like excuses that don’t give you the feeling that the problems are going to be addressed.

    Scott Berkun former Microsoft manager and Innovation Author

    Good to see Scott Berkun offering his opinion on Microsoft creative destruction since after all he has the background to speak authoritatively on the subject of Microsoft and innovation. His list of reasons for the problems:

  • Design by Committee
  • Design by management rank
  • Management bureaucracy
  • Lack of accountability of unprofitable divisions
  • Not learning from failures (innovation can not be done without risking failure but it is important to learn from it)
  • The key thing here is not to bash Microsoft – they have had some successes too – but to highlight issues that could be holding your organization back from innovative market success.