Apple, Innovation And The Rest Of Us

There is certainly a lot of discussion about Apple on this blog and others – which only points to how much they are currently in the driver’s seat in so many facets of business and technology.

Diane Mermigas wrote about how Apple’s innovations reinvented the company and raised the bar for others in her On Media blog today.  That thesis could be expanded further to include its reinvention of a humongous part of the technology sector.  Figuring how the iPhone provided the impetus for the astronomical growth of the world of apps and how their focus on customer satisfaction has set the standard for all others to follow, their influence and the change that it has brought to our world is astounding.

Their innovation – granted, it was not in a vaccum and was done along with others – has helped usher in completely different consumption patterns amongst a percentage of the population that is overly disproportionate with their market penetration.  If that’s not a sign of influence, I don’t know what is.

Not entirely focusing on Apple, but on the ecosystem drafting off of its gains, Mermigas captures the following sentiment about the shift to the digital environment and its growth opportunities:

The timing is becoming more critical as investors and analysts (as most recently signaled by Barclay’s Capital) continue to shift more of their core holdings from traditional media to digital, where movies, TV production and print media are creating lucrative new business iterations. Barclay’s analyst Anthony DiClemente is betting that sometime this decade, the imbalance of 36% of overall media time is spent online, even though only 15% of domestic advertising budgets go there comes unglued. The collective economic force of mobile, global, social, local, e-commerce and video elements will eventually overshadow conventional advertising.

It shows how much more the influence of innovation will be felt when the percentages spent on advertising formats actually reflects their percentage of media consumption. Certainly, there is a huge upside in the digital space.

What’s slightly odd is that Mermigas seems to discount the fact that innovation is effectively sewn into the DNA of Apple.  She muses that they will lose market share as others build up around them and their “walled garden” can not be protected by Jobs.  To me, it seems like she supposes that they will stop innovating and glide along.  That contradicts another part of the blog referencing when Microsoft said that “Apple is already dead” in 1997 – and they are now seemingly stronger and more alive than ever.

Innovation is not good just for the sake of innovation.  The reason Apple and others have been so successful is that their innovation is tied to timing that are in sync.  If that timing is off, Apple could very well find themselves repeat the rut that they were in just over a decade ago when they only had around 3% penetration.

Hopefully, they do continue to be effectively innovative well into the future. My only concern would be if they are not set up to do that – and that it is not really part of their DNA, but a reflection of Steve Jobs.  If that’s the case, we are all in trouble.



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