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In this week’s issue, The Economist states that Apple has become an iconic company enjoying a great reputation for its inventiveness. Technology Review, the MIT’s publication, also praises Apple’s industrial designers in an article under the title “How Apple Does It”.

As seen in some of my previous blogs this is a company which is always shown at the top of this year’s innovation rankings jointly with Google (BW, Wired, Fortune), and it will be soon added to the S&P100 index.

So, what’s the recipe of Apple’s success?

1.- Thought leadership.

While many executives rely on exhaustive market research and focus groups, Apple invests about 20% of its industrial design on concept research. Note that the company has one of the lowest ratios of R&D spending to revenues.

Steve Job’s is very interested in launching products which define new categories. Henry Ford was once asked about customers’ feedback. His take was that most were looking for stronger, faster horses. Instead, he mass produced cars and created a business empire. Being customer focused does not necessarily imply limiting creative thinking to what might be commonly acceptable. Companies such as Apple happen to be trend setters, launching products and creating markets beyond today’s expectations.

Back in the 80s Jobs was quoted saying that he wanted Apple to be what Olivetti was in the 70s: “an undisputed leader in industrial design.” At that time Apple partnered with Frog Design, which, interestingly enough, had acquired a lot of experience from design work they had done for Sony in Europe.

2.- Network innovation.

The leader’s section of the The Economist calls it: “not invented here, and very welcome“. Apple has been able to adopt technologies developed by other companies, blending them with designs inspiring user friendliness and consumer appeal.

As an example, it was a consultant who first conceptualized the iPod, and the foundation of iTunes happens to be software brought in from outside. Apple also works closely with manufacturers, being very engaged in material selection and manufacturing processes, innovating with them where they see fit. Just yesterday, at Apple’s Worldwide Developers Conference, Steve Jobs announced that:

“To maintain the security of the iPhone, Apple decided not to let developers write actual applications for the iPhone, but rather create Web 2.0 applications that run within the version of Safari included on the iPhone”.

“Developers will be able to create applications for the iPhone by using programming tools like Ajax (Asynchronous JavaScript and XML) and taking advantage of Safari. A separate, special software developer kit is not needed.”

3.- Human factors engineering

Apple focuses on mastering QoE, the Quality of Experience. Understanding user-centered design and consumer behavior is paramount. Apple’s designers surrender the technology to the user’s needs and expectations. This translates into simplicity, ease of use and elegance, effectively competing in a market populated with a great variety of gadgets.

Apple manages to captivate audiences by means of well thought out designs. Cross functional teams include experts in marketing, engineering and user experience requirements. To prevent cluttered products and obscure user interfaces, Apple manages feature creep by keeping things out. This means omitting items which would lead to unwelcome complexity.

“The lessons from the 1,273% rise in Apple shares over the past 10 years transcend any particular tech market. Apple has put the design of great customer experiences on the map, not just as a means to win creative kudos but as a way to earn billions of dollars and revolutionize industries”.

“Apple’s big contribution is showing that you can become a billionaire by selling emotions, that design can be a valid business model”. Gadi Amit, founder of NewDealDesign as quoted by BusinessWeek.

4.- Continuous Improvement

While Bruce Nussbaum’s blog talks about “Why Apple Is No 1 In Innovation“, Dave Caolo took time to list the “Top 10 Apple Flops“, which gives examples of Apple products which did not become a market success. Apple has consistently shown that they can learn from their mistakes. The iPone is seen as Apple’s fix for the Rockr’s lack of success, a music phone developed in partnership with Motorola.

Jose de Francisco Lopez. Chicago, 11/06/07

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This blog’s Long Tail:

• America’s most innovative company: Apple
• Innovation at Apple
• Vulcan mindmeld
• Bill Gates & Steve Jobs

References:

• Lessons from Apple. The Economist.
• The secret of Apple design. Technology Review.
• Who is Johnathan Ive?. BusinessWeek.
• Apple lets developers access iPhone via browser.
• Johnathan Ive
• Apple

The source of these charts is Jessi Hempel’s article published by BusinessWeek’s latest issue of “in”, Inside Innovation. The data was provided by Forrester Research and the graphic artist behind the data visualization is Arno Ghelfi.

Forrester’s source report on Social Technographics was prepared by Charlene Li in April of this year:

“Many companies approach Social Computing as a list of technologies to be deployed as needed — a blog here, a podcast there — to achieve a marketing goal. But a more coherent approach is to start with your target audience and determine what kind of relationship you want to build with them, based on what they are ready for”.

The term Social Technographics® is Forrester’s market segmentation technique to aid companies working on their web strategies. In today’s market, online activities involve a trial and error process which can be risky and resource consuming, as Jessi Hempei puts it:

“It’s not enough to build a hub in Second Life or create a profile in MySpace.com. It’s time to shift your focus away from trying out every high-tech platform that comes across in your in-box.”

So the recipe for success is about applying what we might like to call “marketing fundamentals“. These are well known best “101 practices” such as market segmentation and value chain analysis to name a couple. Having said that, my first reaction when I saw these charts was to figure out where I might be represented:

• X Axis: “Generation X“. 19% of us appear to be “creators”
• Y Axis: “Creator”… I’m guessing that a large percentage of “Creators” would also be Collectors, Joiners, and Spectators by definition, which some define as “Generation C“

Jose de Francisco Lopez. Chicago, 11/06/07.

Click here to display my most recent blogs

or click here if you needed info on how to receive my newsfeed

This blog’s Long Tail:

Mashup tools;

Mobile blogging; Mashup tools, now mobile;

Mobile blogging (2); Mobile blogging (3); Mobile blogging (4);

Consultaglobal: innovation blog;