Apple innovation; a case study
Apple innovation; a case study
Apple innovation; a case study
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<strong>Apple</strong> <strong>innovation</strong>; a <strong>case</strong> <strong>study</strong><br />
Ahmad Al-Rubaie
Agenda<br />
• <strong>Apple</strong> as a leading innovator<br />
• <strong>Apple</strong> financial performance<br />
• <strong>Apple</strong> history & <strong>innovation</strong> background<br />
• <strong>Apple</strong>’s <strong>innovation</strong> strategy<br />
• <strong>Apple</strong>’s <strong>innovation</strong> takeaways<br />
• Steve Job’s <strong>innovation</strong> secrets
One cannot talk about <strong>innovation</strong> without<br />
mentioning <strong>Apple</strong> Inc.<br />
For the fourth straight year, respondent ranked <strong>Apple</strong> and Google the two most<br />
innovative companies, with <strong>Apple</strong> once again the hands-down winner. <strong>Apple</strong> has held<br />
the op spot in our survey since 2005.<br />
To gauge opinions, we asked respondents to name the company they consider most<br />
likely to topple <strong>Apple</strong> within the next five years. The two names mentioned most often,<br />
perhaps not surprisingly, were Google and Microsoft. But it is worth noting that the third<br />
most frequent response was "no one" suggesting that many believe <strong>Apple</strong> will not fade<br />
anytime soon.<br />
Source: Innovation 2010, BCG<br />
© <strong>Apple</strong> Inc
Since the year 2000 <strong>Apple</strong> has shown<br />
strong results<br />
In 2000<br />
<strong>Apple</strong> revenues were about<br />
$8 billion.<br />
<strong>Apple</strong> posted net profit close<br />
to $800 million<br />
In 2008<br />
<strong>Apple</strong> revenues were about<br />
$37.5 billion<br />
<strong>Apple</strong> posted profit of over<br />
$6 billion<br />
Increase revenue more than 450% in 8 years…<br />
Increase net profit more than 1700% in 10 years…<br />
“We’re armed with the strongest product line in our history, the<br />
most talented employees and the best customers in our industry. And<br />
$25 billion of cash safely in the bank with zero debt,” Steve Jobs,<br />
CEO of<br />
<strong>Apple</strong>, October, 2008 Earnings
The trend continues<br />
In 2010<br />
<strong>Apple</strong> revenues were over $65 billion<br />
<strong>Apple</strong> posted profit of over $14 billion<br />
Increase in revenues more than 800% in 10 years<br />
Increase in revenues more than 170% in 2 years<br />
Increase net profit more than 1700% in 10 years<br />
Increase in net profit more than 230 % in 2 years
It has not always been great successes<br />
1984<br />
1976<br />
2001<br />
1998
<strong>Apple</strong>’s culture is embedded in its roots
The apple product line evolution tells a<br />
story
<strong>Apple</strong> leverages a combination of Top-<br />
Down and Bottom-Up <strong>innovation</strong><br />
strategy to create new <strong>innovation</strong>s<br />
• Management & organisation driven,<br />
highly structured and process oriented.<br />
• Customer driven, spontaneous and<br />
with deep understanding of customer<br />
need
<strong>Apple</strong> Innovation Takeaways<br />
‣ Build Products that are cool, intuitive, simple to use and provide the<br />
most amazing experience<br />
‣ Take calculated risks and boldly enter new markets. E.g. iPod, iPhone<br />
Change the playing field by creating new business models. E.g. iTunes<br />
Capture the changing landscape and ecosystem of the markets and<br />
buyers<br />
‣ Grow the market share with buyers as they grow and their needs grow<br />
‣ kids, teenagers, young adults, adults, parents....<br />
‣ Provide multiple products / touch points to buyers so they can buy and<br />
subscribe to more products all glued through iTunes<br />
‣ Creativity begins with asking questions…<br />
‣ Innovation happens when you find answers…<br />
‣ No questions, no answer<br />
‣ More questions, better answer<br />
Source: <strong>Apple</strong> <strong>innovation</strong> Strategy<br />
www.InnovationMain.com
<strong>Apple</strong>’s <strong>innovation</strong> culture is closely<br />
coupled with that of its leadership<br />
‣ Do what you love<br />
‣ Put a dent in the universe<br />
‣ Kick-start your brain<br />
‣ Sell dreams, not products.<br />
‣ Say no to 1,000 things.<br />
‣ Create insanely different experiences.<br />
‣ Master the message
A leadership that understands <strong>innovation</strong><br />
“We’re gambling on our vision, and we’d rather do that<br />
than make ‘me-too’ products.”<br />
“Creativity is just connecting things.”<br />
“Innovation comes from saying no to 1,000 things to<br />
make sure we don’t get on the wrong track or try to do too<br />
much.”<br />
“Part of what made the Macintosh great was that the<br />
people working on it were musicians, and poets, and<br />
artists, and zoologists, and historians who also happened<br />
to be the best computer scientists in the world.”<br />
“A lot of companies have chosen to downsize, and maybe<br />
that was the right thing for them. We chose a different<br />
path. Our belief was that if we kept putting great products<br />
in front of customers, they would continue to open their<br />
wallets.”<br />
Steve Jobs
A leadership that understands <strong>innovation</strong><br />
“We are absolutely<br />
consumed by trying to<br />
develop a solution that is<br />
very simple, because as<br />
physical beings we<br />
understand clarity.”<br />
Jonathan Ive
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