The secret to Apple’s success?


If there’s one company that is the envy of the high-tech community these days, it’s Apple.  Steve Jobs is hailed as a genius CEO and lauded for a string of hit products. Apple’s market capitalization is over $200 BILLION dollars currently, easily ranking it in the top 10 companies in the world by market cap, and just shy of Microsoft for biggest technology company.

Everyone wants to understand the secrets of Apple’s success and hopefully emulate them. The reasons given by people for Apple’s success are many. The following are a few of the arguments made:

1. Vertical integration – Apple owns most of, if not the entire, technology stack for its key products,  and thus gives it advantages over other less vertically integrated products.

NOTE: “Vertical integration” used to be called “being proprietary” and was given as the reason for Apple’s relative lack of success against Microsoft in the OS/PC battles of the 80s and 9os. But phenomenal success has a way of changing people’s minds.

2. Making markets vs.  addressing markets – Some claim that Apple doesn’t ask people what they need but gives them products they decide they want.

Does anyone NEED an iPhone or iPad? Not really, but a lot of people seem to want them.

3. The Cool Factor – Let’s face it, Apple does make “cool” products. Attention to design and detail – fit and finish as they say – really distinguishes Apple’s products from competitors.

4. Entering markets after they’ve developed — Contrary to #2 above, some people claim that Apple doesn’t make markets but enters existing markets once they’re growing and takes  advantage of latent demand.

The iPod was not the first digital music player and the iPhone was not the first smart phone, and the iPad is not the first portable computing device. In the case of the iPad, products like the Kindle and Netbooks actually paved the way for the market to accept  small computing devices, and Apple’s iPad is riding that wave.

5. Differentiated business models – whether it was iPod+iTunes or the iPhone+App Store, Apple innovates not just on technology, but on the business model. This makes it difficult for competitors to play catch up, let alone overtake Apple once it establishes itself in a dominant position.

6. People care about the experience not technology — Apple has always been about the user experience, but for a long time, the majority of the market didn’t care about that.

The majority of desktop computer users cared about “techs and specs”.  Now the tables have turned, and the majority don’t care about the specs, they care about the experience. The iPod, with it’s “1000 songs in your pocket” motto and iTunes which radically simplified purchasing music latched onto the experience wave, and Apple has been riding it ever since.

7. Simple product offerings – Apple has a very clear and simple set of products. It’s easy to understand the differences between their products, product families and the various configurations. This makes it easy to buy an Apple product if you want to.

A lot of companies complicate things unnecessarily. How many iPhone models are there? How many Blackberry models are there? How many Nokia smart phone models are there? See the difference between Apple, RIM and Nokia?

The same is true for the iMAc, the iPod and the iPad. Granted, there are actually a number of iPod models (Nano, Shuffle, Touch etc.) but they are very distinct amongst themselves. This can’t be said for digital music players from other companies.

I’m sure there are other reasons for Apple’s success, but it’s interesting to see how much debate is happening today on this topic. What it says to me is that there is no single reason for their success. And keep in mind that Apple has had failures as well.  Notice Apple doesn’t talk much about Apple TV. And remember the G4 Cube? The 20th Anniversary Mac?  Even the ultracool MacBook Air has had far from stellar success.

So, what do you think are the reasons for Apple’s incredible success over the last 10 years?

Saeed

Advertisements

4 responses to “The secret to Apple’s success?

  1. Anyone who has a CEO or Executive come to them and say “I want us to be just like Apple! Why can’t we develop products like that!” needs to read this article:

    http://www.pragmaticmarketing.com/publications/magazine/6/4/you_cant_innovate_like_apple

    That is the definite answer about why no one else can do it like Apple does. Aside from all the reasons you called out above, like vertical integration, focus on the experience, etc, Apple’s hardcore focus is on software, specifically the user interface.

    They are absolute masters of UI design, and in making traditionally hard to use technology and making is accessible to novices (while not alienating the experts). They just don’t have a peer in that area and everything else flows from that. My 20 month old daughter was able to sit on my lap and play a game on my iPad. 20 months!

    The link above describes their UI process, and it is brutal. They design pixel perfect mocks of EVERY screen, with actual content…and not just one version…TEN DIFFERENT versions of every screen. Think of the cost in time and people to do 10 pixel perfect content-included mocks of every screen in your UI. That is why no one else is like Apple.

    When your Executives say that they want to be like Apple, ask them if they are willing to release late-to-Market (Apple is rarely first and let’s others fail first), lengthen their development cycles by at least double (probably more), and hire a ton of very expensive Ph.D. level UI/HCI experts.

    They want Apple results without Apple’s investment.

  2. Paul

    Thanks for the comment. I didn’t give my opinion on what makes Apple the company that it is, and that comes down to culture.

    From the “Think Different” tag line after Jobs’ return as CEO, Apple has developed a culture of product excellence. And I’m not just talking about the technical aspects of the products.

    There’s a line in the article you reference in the section under “Production Meeting”. It reads:

    “It’s part of their corporate DNA of grueling perfection.”

    That’s a great line. Their DNA is focused on perfection…and not just any kind of perfection, but “grueling perfection”. How many companies are willing to sign up for that?

    I agree that few if any companies can do what Apple does, but that doesn’t mean that people can’t try to create their own DNA of excellence?

    And in fact, that should be the focus of any new company that wants to truly succeed.

    Saeed

  3. Pingback: iPad Links: Friday, May 21, 2010 « Mike Cane's iPad Test

  4. Hi Saeed,

    Interesting article. I think you’ve a lot of worthy points, but I feel that Apple manages to do all of these and tie them together. There are few companies that can do that.

    I personally think that a big secret of their success is their ability to step back, fully and correctly define a problem, and then look for tailored solutions. They really do understand their users well.

    Look at the App store. For many people it’s a nasty dictatorship, but for others it’s heaven. Most people I’ve spoken to praise it for its ease of use and updates. So Apple, understanding this about their target user base, have been able to ignore the criticisms, because they’re comfortable with their choices.