Can Apple Reinvent Itself Again?

on March 30, 2016

On Friday, April 1, 2016, Apple celebrates its 40th anniversary. I have had the opportunity to professionally follow Apple since 1981. When I first began interacting with the company, it was a very small firm whose Apple II personal computer had gained traction with hobbyists and some schools and was just starting to leverage a software product called VisiCalc to push this computer to business users as well. At that time, most of my dealings were with Jobs and Wozniak and their small media department.

Of course over the years as Apple grew, especially after the Mac was introduced and it was marketed to the business world as part of a desktop publish solution, Apple’s place in the market became larger and the company really took off. Since then, I have had the opportunity to interact with all of their top management and have developed a pretty good understanding of their culture, how they work and what really makes them tick.

I am often asked what makes Apple successful and if they can continue that success in the future. To answer these questions, I believe one has to understand Apple’s past in order to predict its future.

The first characteristic that has made Apple successful was the visionary mind of Steve Jobs. His early vision drove Apple’s success up until he left the company in 1985. But, as history records, Steve’s management skills were sorely lacking in those days. However, as early as 1977, with the introduction of the Apple I, he set in motion one of the major tenets of Apple success. The concept of reinvention.

As you know, Apple did not invent the personal computer. That distinction lies with the late Eddie Roberts and his Altair Computer in 1974. This is the personal computer Bill Gates and Paul Allen wrote an OS for and set in motion the personal computing revolution.

Steve Wozniak was very intrigued by the Altair but did not have the money to buy one. So, in the 1975-1976 time frame, Woz created his own version of the Altair PC and tapped his friend Steve Jobs to help sell it. The result of this was Apple creating the first commercially successful PC to help kick start the PC market.

However, in 1981, IBM came to market with the original IBM PC and since IBM was a known quantity in the business world, it began to gain success and pushed the Apple II out of the limelight. This is when Steve Jobs’ “reinvention” gene kicked in again. He decided Apple needed to reinvent the PC by creating one that would be even better than what IBM had on the market. He and his team created the Mac and introduced the first graphical user interface and mouse for commercial use in a PC. Even here he was reinventing things. Both the GUI and mouse were invented inside Xerox Parc, but Jobs made it better and commercialized it with the Mac.

That idea of reinventing products was kept alive even when Jobs left the company in 1985. While Jobs made a key decision to create their own laser printer, It was John Sculley and his team that married Pagemaker to the Mac and birthed desktop publishing. Electronic publishing was not new by any means back then, but Apple reinvented it at a desktop level.

Sculley also made the major decision to put CD-Roms in all Macs and, because of this, Apple was able to use software to integrate text and media into a PC and birthed multimedia computing. Again, digital multimedia had been around for some time but Apple reinvented it in a desktop PC package.

From the latter period of Sculley’s role at Apple and until 1997, Apple fell into disarray. Much of that came from Apple losing its vision and reinvention philosophy. Their CEOs started to copy the PCs in the market in order to try and compete with them. They even allowed for a clone of the Mac and, to me, Apple lost not only its vision but its soul during that period.

But when Jobs came back in 1997, he put them back on a path of reinvention. He started with reinventing the Mac by introducing the candy-colored all-in-one iMacs. Although Apple did not invent the MP3 player, Apple did reinvent it in the form of the iPod. And Apple did not invent the smartphone, but they reinvented it in the iPhone. And tablets had been on the market for 20 years when Apple reinvented it with the iPad in 2010 and made it one of the most disruptive products we have seen in many years.

I see this principle of reinvention as a key part of Apple’s DNA. They tend to wait and see if a technology is valid and then come in with something better, tied to their ecosystem, and apply many forms of innovation to their version. Apple has not entered VR/AR yet but I suspect they will wait to see where the sweet part of this market is and then do a product better than what is on the market now.

There are rumors Apple is creating a car. I am not sure if a physical car is in the works but I have no doubt they are looking at how to reinvent the automobile experience and tie it to their ecosystem. We also know Steve Jobs gave Tim Cook a goal to find ways to reinvent the healthcare system. Apple is on track to make major contributions to the future of the health care processes and impact the interaction between health care providers and patients in new ways that will ultimately change healthcare for the better.

Apple seems content to not being the first one to market with a new technology but instead, let the market develop to a point and then enter with a product well designed, well thought out and connects to their apps and services.

Another key tenet of their strategy is based on innovation and design. I met with Steve Jobs on the second day he came back in 1997 and asked how he was going to save the company. Apple was $1 billion in the red and in serious trouble. He told me he would focus on taking care of his core customers, ones that used the Mac for graphics, engineering and design. But he also told me he would focus on industrial design. At the time, I thought he was crazy but, sure enough, industrial design has been key to Apple’s success. That, along with creating apps and services that pay great attention to detail and Apple has lived by these tenets to help make them one of the most valuable companies in the world.

The other part of the equation of Apple’s success has been its steadfast leadership who learned Jobs’ vision in person and have been chartered to drive Apple forward by preserving its culture, commitment to innovation and the quest to make Apple great at everything they do. Make no mistake about it, Apple is Steve Jobs’ company and this management team will do everything possible to drive his vision forward and keep his legacy alive.

So how does this help forecast Apple’s future? For one thing, Apple still has a lot to prove in their quest to honor and drive Steve’s Jobs’ vision and legacy into the future. And Apple is not done innovating and reinventing by any means. Also, any hardware they create, regardless of what that is, will be tied to an ecosystem of apps and services that can only grow and get better over time. But I wouldn’t call Apple’s strategy formulaic, since they often deviate and continue to bring new ideas and technology to their products and ecosystem. However, they live by the tenets I shared above and these seem to be the guiding principles for how they think about and create products and services.

When I hear Apple’s best days are behind them I just look at their history and, from what I know of this company, I factor that into looking at their future. That is why I have no doubt Apple will reinvent products, and itself, and continue to be a powerhouse in technology for decades to come.