As a company, Apple’s success is not due to superior technology, nor to customer service, and certainly not to low prices. Apple’s unique niche is discerning untapped or unmet consumer needs and designing products that unlock or reshape markets. While Apple is rarely first to a market, the products are typically far better suited to the majority of customers. Largely, this is a combination of excellent aesthetics, industrial design, and adopting the right technologies for the product.
The iPod is a classic example; many portable music players existed prior to the 2001 launch, but the market truly took off in 2004 and was subsequently dominated by the iPod. The crucial technologies were adopting NAND flash for the Nano, iTunes, and the iTunes store. The former was essential, because it allowed truly compact MP3 players. The latter two because they simplified distribution of music and provided a simplified and sane pricing model; both of which proved necessary for widespread adoption by paying consumers.
In a similar fashion, smart phones existed in the late 1990’s, but Apple redefined the experience with the iPhone in 2007. The multi-touch capacitive touchscreen (and accompanying software) and high quality display were crucial ingredients of the iPhone. Although quite costly at the time, high volume manufacturing has reduced prices for these components and increased availability, both for Apple and the rest of the industry.
Ironically, Apple made a conscious choice to use older 2G wireless technology (GSM), and did not adopt the more advanced 3G networks (UMTS/HSDPA) until the 3G model launched in 2008. While the connectivity was inferior to contemporary phones, that did little to slow consumer demand. In fact, the 3G model was notorious for poor battery life, perhaps related to the extra power consumption for 3G wireless.
Selecting the right new technologies and deciding when to incorporate them into a product is rather challenging. The options available throughout the industry are incredibly broad and span nearly every aspect of a system, from wireless networking, CPUs, and sensors to case materials (e.g., plastic, aluminum, carbon fiber). Even picking the right technology is no guarantee of success; Apple’s Newton was an interesting idea, many years before PDAs or smart phones, but is still a footnote in history. Most new technologies increase the system cost and often power consumption as well. For battery powered devices this is unwelcome, since consumers crave longer use times and prefer lower prices.
The timing is crucial and demands careful consideration of cost, performance, previous products and expected consumer reception. Premium technologies like large flat panel displays are common today, but were exotic in the 1990’s. This change in cost has driven new applications. For example, displays in urban gas stations are used to inflict advertisements upon consumers; which was simply economically impossible a decade ago.
The iPad 3 was another excellent product that influenced the entire industry. It was the first Apple tablet to offer LTE as an option and more importantly, the first very high resolution display. The so-called “Retina” display essentially doubled the pixels per inch (to 264 PPI), delivering a higher level of visual clarity. Apple’s marketing cleverly captured the imagination of consumers and was clearly a critical driver of the product’s success. Having demonstrated the value of a higher quality display to the industry, many other vendors are following in Apple’s footsteps and adopting similar technologies.
However, the iPad 3 was an unbalanced product. The high quality display has an impressive resolution of 2048×1536, but was not accompanied by a sufficiently robust GPU and the resulting performance was underwhelming; a problem that was not corrected until the subsequent generation. While ultimately this did no long term damage to Apple, it highlights the importance of timing and a holistic approach to innovation.
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