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