Does Apple Need to Invent or Innovate?

on June 1, 2016

Everyone is familiar with the saying, “Necessity is the mother of invention”. In fact, most inventions come from someone seeing a need and creating a product or service that meets that need. More importantly, inventors pretty much drive much of the world’s commerce as individuals and companies apply various levels of R&D to an idea and use that to invent products and bring them to market.

In various conversations recently, I have heard both Apple backers and detractors bemoaning the fact that Apple seems to be at a crossroads and, for the first time, I have heard both sides saying Apple needs to invent something new to get their luster back.

This is probably a harsh assessment in that Apple is still making record profits and, while their stock has taken a hit, Apple still has over $200 billion in the bank and is spending $10 billion in R&D with, I am sure, plans to continue to create and develop new products and services in the future. They have been doing this really well since 1997 and, given that track record, I am willing to give them the benefit of the doubt at this time.

However, asking Apple to invent something new suggests that those asking do not really understand Apple’s formula for success. It’s one they repeat with every product they have brought to market since their beginning, starting with the original Apple I. Apple did not invent the PC ( that came from Micral in 1973), and it was Eddie Robert’s Altair 8800 introduced in 1974 that brought the first commercial PC to the market.

The Apple I came from Steve Wozniak’s lust for wanting his own Altair but not having enough money to buy one. So he created his own and, along with Steve Jobs, made a business out of his version of a PC. But it was what Apple did with the PC over time that really put Apple on the map. With every generation of the Apple I, II, and III, and eventually the Mac, they brought innovation to the design, OS platform, and related applications.

This is their approach to innovation on an existing product such as the introduction of the iPod. They did not invent MP3 players but put their innovative design, easy to get music via downloads, and an ecosystem of software and services on it — Apple basically owned the portable music player market for over a decade.

That same approach was also applied to the iPhone. While not first to market with a smartphone, Apple innovated around the concept, created the iPhone, and introduced pocket computing to the world. More importantly, it helped create a multi-billion dollar market for them and many others. Smartphones now are the number one way people gain access to the internet around the world.

Apple took the same approach with tablets. They did not invent them but they did make them better and also created a billion dollar market for tablets. They are the leader in enterprise-based tablets and are still a highly preferred supplier of tablets for consumers around the world. Apple did not invent smartwatches but here too they have created what seems to be best of breed and clearly the best-selling smartwatch at the moment and a product that adds billions of dollars to their bottom line.

Now that VR seems to be the next big thing, even some Apple aficionado’s are asking, “Where’s Apple VR play?” Some even worry Apple will be too late given all of the activity from Oculus, HTC Vive, Sony Playstation VR, Samsung and most recently Google’s introduction of Daydream and their broader Android VR program.

But if history is our guide, Apple will watch how this market develops and, at the right time, bring out a VR solution that will most likely be superior to anything on the market outside of what is at the ultra high end. They will create the gold standard for a smartphone-based VR headset with supporting apps and services and, even if late, they could end up with the lion’s share of the market as they have done with the other products in their line. This same MO will probably be applied to an autonomous vehicle should they bring one to market.

This does not mean Apple will not invent something new in the future. But Apple has become a master of innovating around new products enter the market and show promise but, in their early stages, are not enough to create or drive a large market for them. They enter and do what they do best — create a great new device, develop an SDK so developers can create great apps and services for it and then spend millions of dollars marketing while making it part of the broader ecosystem of products they offer their customers.

My bet is Apple keeps up their successful formula for innovating around new products and categories and that is what will continue to drive their growth in the future.