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“Almost everything that Apple makes transcends gender, geography, age and race (…) Apple scoffs at the notion of a target market. It doesn’t conduct focus groups (…) Apple has demonstrated how to create real, breathtaking growth by dreaming up products so new and ingenious that they have opened one industry after another: consumer electronics, the record industry, the movie industry, video and music production.”

Read Betsy Morri’s article, “What Makes Apple Golden“, on Fortune.

“No other company has proven as adept at giving customers what they want before they know they want it (…) When Jobs retook the helm in 1997, the company was struggling to survive. Today it has a market cap of $105 billion, placing ahead of Dell and behind Intel (…) Apple creates must-have products the old-fashioned way: by locking the doors and sweating and bleeding until something emerges perfectly formed.”

Read Leander Kahney’s article, “How Apple Wins By Breaking All the Rules“, on Wired.

“The company has had, indisputably, one hell of a run. In the past year alone, three major new products -iPhone, iPod Thouch and Leopard OS- fueled triple-digit revenue growth. So while analysts forecast a more earthbound Apple in 2008, it deserves the praise. And extra points for style.”

Read Kevin Ohannessian’s article, “The World’s Most Innovative Companies“,  on Fast Company.

“Investors may be more focused now on the stock’s 28% plunge since the start of 2008: The Cupertino (Calif.) company has become the poster child for market fears of a slowdown in consumer spending. Chief Executive Steve Jobs has signaled that despite any recession, Apple won’t be trimming its R&D budget. With $18 billion in cash on hand, many expect the product obsessed Jobs to go on the offensive. He has already announced a corporate version of the iPhone.”

Read “The BW 50” on BusinessWeek.

This is a company which keeps making the innovation rankings and remains on everyone’s radar screen. Here are  the links to my previous posts: Apple’s innovation recipe: the power of design research, Innovation at Apple and Lessons from Apple, which happens to be one of the most visited pages of this blog.

This time around, I have chosen to focus on the following subjects:

• Leadership:  Steve Jobs’s autocratic management style and secrecy are balanced by his charisma, expecting employees to relate to a sense of mission transcending most people’s understanding of traditional roles and responsibilities. He is often portrait as a perfectionist who likes to employ passionate people. Not just top down but also peer pressure appear characterize Apple’s demanding corporate culture.

• “What I told our company was that we were just going to invest our way through the [dot-com bubble] downturn, that we weren’t going to lay off people, that we’d taken a tremendous amount of effort to get them into Apple in the first place- the last thing we were going to do is lay them off (…) so that we would be ahead of our competitors when the downturn was over. And that’s exactly what we did.” Steve Jobs. Fortune 2008 issue.

• Emotional design: anthropologists refer to the term “culture” as the human capacity to communicate and share experiences symbolically. Apple integrates human factors engineering and emotional design to deliver user friendly objects of desire which become part of our culture. If interested in the subject I suggest reading my previous (and future) posts on innovation and the rationale behind emotional design.
• Tight vertical integration: Apple leads strategic parts of the value chain without losing focus. The company designs and develops much of the hardware and software delivering tightly integrated systems and higher performance. Apple’s iTune’s online store, the iPod’s hardware and software, and the retail stores being an example. Basically, as far as Apple is concerned, the whole is greater than the sum of the parts. Despite of having implemented a walled garden model as L. Kahney’s puts it “[customers] are willing to trade freedom for a kick-ass product”.

• “One of our biggest insights [years ago] was that we didn’t want to get into any business where we didn’t own or control the primary technology, because you’ll get your head handed to you”. Steve Jobs. Fortune, March 2008 issue.

• Focus: To Apple, being focused means to understand available options and to allocate resources on selected projects (e.g. Job’s statements about having to say “no” to the 100 other good ideas) as well as discontinuing rapidly superseded product releases to get to work on what’s next.

• “These waves of technology, you can see them way before they happen, and you just have to choose wisely which ones you’re going to surf. If you choose unwisely, then you can waste a lot of energy.” Steve Jobs. Fortune, March 2008 issue.

• Leapfrogging: When competitors appear to catch-up, Apple manages to shift gears again and again. As an example, Microsoft’s Zune 2 has received positive industry reviews, featuring a scroll wheel resembling that of former iPod designs while showcasing the company’s good work. However, Apple is now rolling out a different UI paradigm by deploying new touch sensitive screens and interfaces, such as the ones featured by the newer iPod Touch and, obviously, the iPhone.
• Intellectual property protection: Apple spent three years working on the iPhone, a product which was unrivaled at the time of being launched. They also follow a very disciplined marketing and public relations practice, preventing any information from leaking to the media.
• Marketing: Apple is a cult brand that markets innovation as a way of life. The company’s pricing strategy manages to command a premium for new product releases by focusing on early adopters with a higher willingness to pay, then moving to the next market segment and adjusting pricing downwards accordingly.

As usual, I will appreciate your comments and emails.

J. de Francisco
Chicago, 12 April 08

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