In August 2018 Apple became the first U.S. public company to surpass the $1,000,000,000,000,000 mark in market capitalization (this is equivalent to $1 trillion U.S. dollars or $1,000 billion U.S. dollars in “Market Cap”) (1).
Why did the market value Apple in this way?
One factor is the prospect that sales will continue to increase in the coming years, but another is undoubtedly the capacity for innovation that the company has demonstrated for several years.
Harvard Business Review in its December 2009 publication (2) published 5 skills (factors) that make up the DNA of innovators:
Ability to associate ideas (Association): Connecting or relating topics, problems or ideas of very different nature. For example, it is said that the Renaissance was detonated in Florence because the Medici family brought to work with them people from very different disciplines, such as painters, architects, sculptors, poets, philosophers, etc.
Inquisitive or questioning ability (Inquiry): As Peter Drucker described, “The important and difficult work is never finding the right answers, it is finding the right questions.” Ask questions and look for the answers, Why, Why not, What if…?
Ability to observe (Observation): That is, to look and perceive with attention to detail. Intuit founder Scott Cook said, “Often, the surprises that lead to new business ideas come from watching other people work and lead normal lives.”
Ability to test (Experimentation): A scientific spirit for conducting experiments and extracting knowledge from them to achieve the goal of solving a problem. As Edison once said, “I have not failed. I have simply found 10,000 ways that don’t work”.
Ability to create networks, “networking”: An ability illustrated well by scientist Kent Bowen, founder of CPS Technologies, “The knowledge needed to solve many of our most challenging problems comes from outside our industry or field. We must aggressively incorporate advances that were not invented here into our work.”
By reviewing the history of Apple products, one can discover the hallmark characteristics of the innovative character that make up the DNA of one of the most successful organizations of our time.
Below are a few case studies that serve as examples of the innovation factor.
Partnership. iMac The determination to make iMac even thinner led Apple to develop and refine new and existing engineering processes for the 2012 models. A laminated panel coated by a process called plasma deposition made the display thinner and 75% less reflective. The computer’s aluminum case had edges that were too thin to weld easily with traditional methods, so Apple turned to a process called friction stir welding, which is more commonly used in the construction of aircraft parts.(3)
Experimentation. AirDrop When Apple debuted its AirDrop system in 2011, it was a bit of an anti-climax: most importantly, the initial version didn’t work between iOS devices and Macs, arguably the place where it was needed most. It was also complicated on the Mac side, requiring you to specifically enable it before someone could send you a file. When it did work, it could be very slow, and sometimes failed altogether.(4)
Observation. iPods iPod was developed especially for iMac lovers.
So iMac users experienced an easy way to manage all their music, videos and applications from a single platform. So the specialized iPod device was ideally suited to a lifestyle and became a success in the market.
iMac With the advent of touch screens, Apple has been questioned for not incorporating “multitouch” (multi-point touch response) in its iMac computers. This has led the team of designers and engineers to experiment with the possibilities of using these screens but have found them to be neither practical nor ergonomic. It has also led them to ask their most loyal fans, graphic design professionals, for recommendations, but instead they have demanded more computing power. (5)
When Steve Jobs and his team visited Xerox PARC in 1979, not once but twice (6), they realized what a great opportunity there was to bring to the market something totally innovative that would completely change the personal computer landscape and that would give the dominant giant, IBM, a hard blow because they would gain years of advantage with this new advance in their graphical and extremely user friendly Operating System.
It is important to notice that the contact between Apple and Xerox was from several engineers related to Xerox, not only through their research but even they had worked for this company (7).
One of Apple’s little-known missteps was the MobileMe cloud services platform.
Technical problems, delays and “outages” plagued the platform since its inception and finally in 2012 it was taken out of service. (8)
iTunes. The ecosystem created incrementally from the iMac, iTunes, iPod and then the whole range of subsequent products revolutionized the business model of the music and entertainment media industry.(9)
What does the future hold for Apple?
To quote the phrase attributed to the Greek philosopher Heraclitus, “The only thing constant is change,” Apple’s future is uncertain, but it is certain that new generations are changing. For example, today the touch screen is very natural for a child and new interactive technology trends, such as “Virtual Reality” and “Augmented Reality”, which are frequently shown in fictional movies like “Iron Man” (10) or “Minority Report” (11), will undoubtedly transform the way we interact, not only with machines but also between people.
The future looks exciting for technology lovers, but at the same time it seems challenging for all companies that wish to remain in the market. It seems that at the moment, the future has not caught up with Apple, but Apple has designed it.
We will be watching for those who write history.
- Dyer Jeffrey H.; Gregersen, Hal; Christensen, Clayton M.; The Innovator’s DNA; Harvard Business Review; Publicación de December 2009. https://hbr.org/2009/12/the-innovators-dna