Why the Next Apple is…Apple

“Apple doesn’t need to be viewed as different. Apple needs to be viewed as much better.” — Steve Jobs at Macworld in 1997

I get a specific question frequently these days – “Who will be the next Apple?” When I dig into the context behind the question it seems many executives I talk to have concluded Apple has run its course. There must be a new Apple around the corner and, since I study the depths of this industry, I must know who the next Apple is. The trouble with this question is it is flawed.

It is flawed to believe Apple is just like any other company in this industry. They are not. Apple is one of, if not the most, vertically intregated technology companies around. Apple has a vertical (some call it integrated) operational structure. They are a hardware company and a software company equally. They are also becoming a services company. (( You could also argue they are a retail company, an ecommerce company, and even a semiconductor company)) Each part is integrated together and more intertwined than many realize. While Apple may make more money from one part than another, it does not diminish the importance of the other parts which form the company’s competitive advantage.

There are not many companies who dare take the integrated route. Many try and often fail because it is extremely difficult. In fact, in 1996, after Steve Jobs came back to Apple through the NeXT acquisition, he made specific mention of this at a Macworld Q&A. He made it very clear vertically integrated business are hard to run. He stated that, if run well, they can be extremely successful but if not run well they can fall apart quickly.

This is why most pundits, analysts, press, etc., do not understand Apple. Most people are comfortable with horizontal/modular business models. They are the ones often studied at business school. Most companes are modular so there is a larger body of work found in case studies on these types of business. Most people have worked in these types of business models so it makes sense they are the easiest to understand. The powerful nuances of a vertical/integrated company are lost on the majority. I’m not sure we will see a company as integrated as Apple again in this industry. At least not for a long time. This is what makes them unique and why its hard to say the next Apple is out there somewhere.

It is this integrated process that allows them to have an extreme focus on the product, its experience, and the customer. By controlling the silicon, the entire hardware experience, the operating system and many of the core services, Apple creates and integrates the whole so that is differentiated from the pack. They focus on the customers who values this experience and are happy leave the customers “on the table” who do not.

Apple will be the next Apple in whatever hardware categories, software, or services they choose because of this deep company wide integration. This is also why ONLY Apple can be the next Apple. This is also why wise minds won’t write Apple off.

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Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

2 thoughts on “Why the Next Apple is…Apple”

  1. I know your focus is technology, but I am curious if you see anyone in other industries that seems similar to Apple?

    Joe

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