Apple Growth Derives from Planned Product Obsolescence 222.0
As shown again by the IPhone 4, Apple’s growth strategy is just planned product obsolescence with a twist.
In the olden days of three-to-five year product development cycles, planned product obsolescence, and therefore consumer upgrades, was driven by annual style changes.
In the much shorter product cycles of recent years, Apple is the champion of modern planned product obsolescence done by the smart, well-timed doling out of product features coupled with a strong marketing push to drive revenue and profit growth.
iPhone 4. They have done this with all their products and is best exemplified with the iPhone 4 with dual and better cameras, high-resolution screens, gyroscope, and multi-window (Spaces?) access. (Note: Photo above taken from Apple Store. Image has link.)
Note here that I purposely used the non-sexy product features to describe the new offers of iPhone 4.
To be sure, Steve Jobs and Apple have the genius of finding out what the customers want next and in coming out with the right brand for the feature. The component technologies themselves are not necessarily leading edge as most have been applied elsewhere.
Genius. Apple is very skilled at adapting these component technologies and integrating them to the product at hand often as the pioneer in application to the mobile phone.
Thus, in sequence for example, the dual camera from older Phones becomes FaceTime with some software tweaks, the high resolution screen becomes Retinal Display, the better camera becomes the HD Video, gyroscope from gaming and navigation for portrait and landscape viewing, and Multitasking from Windows to Spaces.
Functional features likewise have been used in other products and industries like hard and tough glass from airplanes and forged/EDM frame from Swatch back frames.
Of course, these antecedents do not distract from the overall innovative entrepreneurship of Steve Jobs and Apple in the true Schumpeterian sense of recombinations.
All it implies is that, Steve Jobs and Apple are in the business of innovative applications like Microsoft and less of science and technology – in W Brian Arthur’s sense and not the layman’s of IT as the technology – like Ventner or even Google in the same general product space.
In their mastery of recombinations and applications, Steve Jobs and Apple, with established, are able to create real value added and, consequently total factor productivity. In this sense, they are the ideal role model for innovations from emerging markets rather than that based on basic research.
Elsewhere in SYNTHESiST, we have posted about the product innovation mastery of Steve Jobs and Apple.
iPad 3G + WiFi
I think the matrix of product features and price for the iPad was initially designed to protect the MacBook.
Given the sales performance of iPad, I believe it has been disruptive of the MacBook line.
What’s next? I would not be surprised if Apple comes up with a premium version of iPad that contains the full iWorks and/or accepts Windows for Mac upgrade with the suitable price increase.
As Utterback has predicted in his book Mastering the Dynamics of Innovation, once the dominant design is established, in this case for the portable computer category, the basis of competition shifts to issues like cost and convenience.
The premium iPad, in James Utterback’s playbook, is inexorably on us as with some tweak in software – the addition of an office suite – it morphs to be the Champion of cost and convenience.
Then, Apple will begin to fulfill Bill Gates’ vision of a computer in every office and home.
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I looked up thi site after today’s experience with Apple. I have an iBook G4 that is five years old. It runs great, never had a problem with it, I love it, no need to get rid of it. I got an ipod nano as a gift. I sat down and hooked it up to my itunes. My current itunes is out of date. So I downloaded the current itunes and I can’t run it on my machine. My OS is not up to date. So I go back to the store they sell me Snow Leopard. I put the install disk in and I can’t install the new OS because my mac is not an intel mac. So no OS and no ipod. I got my money back but they said I would need a new computer if I wanted a new ipod. Talk about total B.S.