Apple – is Steve’s innovation strategy dead?

My Ipad Air has recently ran out of the contract with one of the telecom providers and I had a choice to either retain it, upgrade to a new Ipad or get something else. My Ipad starting showing signs of wear, so retaining was not an option. I had a look at the new Ipad. I asked the store rep – What are the new features comparing to the old one? Basically none…was the answer, yes a better processor, better camera but that’s it.

I started thinking about all Apple products and wanted to understand if Apple still stands for innovation strategy and differentiation as it used to be when Steve Jobs was at the helm.

Steve Jobs was all about the innovation….

Here’s one of his best quotes:

picture 1

So right now –  Apple is offering IPhone, IPad, MacBook, IMac and more recently Apple Watch.

All of these products were introduced (except for Apple Watch) when Jobs was the CEO of Apple. The timeline of the products is below:

picture2

Apple watch has been introduced when the competitors have already released the product into the market already. In this instance, Apple wasn’t an innovator, as we’ve always used to see it. It was a follower, probably for the first time in their history

Now try to search the word “innovation” on Apple website.

You’ll come across articles about the diversity and jobs creation, but nothing, which will highlight the importance of the innovation and the new products.

Now going Samsung Website  and do the same thing.

You will come across the articles about the new products, new partnerships and etc.

Apple has been successful in beating their rivals both on revenue as well as the net profit.  As of now, they are world # 1 in profit and the world most valuable brand according to Forbes.

Samsung is only #16

So where’s Apple now?

Based on Ansoff Product-Market Matrix (IACOBUCCI) Apple continues offering basically the same products into the penetrated markets of USA, Europe and Australia. They have been extremely successful in expanding their presence in China though. Apple does not offer completely new products and the new markets, like India, have not been explored yet. There were rumors about Apple potential diversification into driverless cars (App connect is already in some of vehicles) but the latest relatively unsuccessful launch of Apple Watch may potentially rethink their diversification strategy.

Right now, Apple has already experinced a decline in market share around the world except for China  based on the stats below:

iphone share

Could this be a sign of the fact that Apple is running out of steam as they are slowly heading away from their core strength – innovation strategy?

Based on Porter theory of market domination the (IACOBUCCI, p. 214) the company pursuits a strategy to be a leader in either:

  • Cost
  • Differentiation
  • Focus

Apple has never pursued the low cost strategy; they always tended to be different. They were ahead of the game… they offered products others took years to come up with. And even when competitors came close, Apple lifted the bar again.

The fact that they are becoming just one of the players in the game where innovation is everything, may be a killer for them. With smartphone market so penetrated with products cheaper and having more functionality than Iphone (no SD slots to extend the memory?), Apple may need to reinvent themselves to be ahead of the game again.

Apple products were always viewed as lasting longer and more reliable than their competitors.. well based on what Apple released just recently, IPhones & IPads are expected to last three years and MacBook up to four years (Ryan O’Hare, 2016) So the reliability differentiation isn’t on the agenda either….

People who updated their software to IOS 8 in 2014 have faced the bugs not experienced before: like fast battery drain and in some cases even “blue screen of death”. Apple made a lot of fun of Windows for that a few years ago… (Jason, 2014)

A launch of IPhone 7 (expected later this year in line with previous IPhone releases) may be a turning point for the company. Customers, competitors, developers will be very keen to see what’s going come out….

True fans of Apple products will still spend nights in front of Apple Stores when Iphone 7 is around, the sales and profits will surge for some time. The issue is that we know what we want, another shiny Iphone with a bit more features. But the secret of true success is below:

last picture

References:

Apple. (2016, July 24). Apple Producs. Retrieved from Apple: http://www.apple.com/au/pr/products/

Forbes Apple. (2016, July 24). Apple market Cap. Retrieved from Forbes Apple: http://www.forbes.com/companies/apple/

Forbes Samsung. (2016, July 24). Retrieved from Forbes: http://www.forbes.com/companies/samsung-electronics/

IACOBUCCI. (n.d.). Marketing Management. Mason OH: South-Western Cengage Learning .

Jason. (2014, September 20). iOS 8 bugs we’ve found till now. Retrieved from Phone Hacks: http://www.iphonehacks.com/2014/09/ios-8-bugs.html

Rosoff, M. (2016, July 24). The iPhone lost market share in most of the world last year. Retrieved from Business Insider: http://www.businessinsider.com.au/iphone-market-share-by-country-2016-1?r=US&IR=T

Ryan O’Hare. (2016, April 2016). Retrieved from Daily Mail AU: http://www.dailymail.co.uk/sciencetech/article-3541795/Time-running-iPhone-Macbook-Apple-officially-reveals-products-three-years.html

 

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