Apple is one of my favorite companies to use as a benchmark for connecting Innovation to Profitable Growth. The much-anticipated announcement of the iPad yesterday by Steve Jobs and company should be another innovation lesson for all of us. In particular, what has always struck me about Apple’s product launches is the degree of Disruption that they cause.
Disruptive Innovation is a term coined by Clayton Christensen that describes “a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market,’ eventually displacing established competitors.”
Christensen holds that “an innovation that is disruptive allows a whole new population of consumers access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill.” Characteristics of disruptive businesses, at least in their initial stages, can include: lower gross margins, smaller target markets, and simpler products and services that may not appear as attractive as existing solutions when compared against traditional performance metrics. (Read more about Dr. Christensen’s views at http://www.claytonchristensen.com/disruptive_innovation.html)
The main theme with all disruptive innovations has always been that they change the game for the markets that they serve, and particularly for the incumbents in these markets.
Apple & Disruptive Innovation
Apple has always strived to change the game with their products; some of them worked while others were duds — but they always kept trying. Here are a few examples and how these products disrupted markets and competitors, or in some cases how Apple was disrupted itself:
- 1976 – Apple founded by Steve Jobs and Steve Wozniak
- 1977 – Apple introduced the first PC, the Apple II:
- The first IBM PC was introduced in 1981, beginning the long-running competition between the two companies. Apple was disrupted by IBM
- 1983 – Apple introduces the Apple IIe, its most successful computer ever
- Apple disrupted the education market: long loved by schools for their ease of use but not embraced by business users, which preferred IBM PCs.
- 1984 – Apple introduced the first Macintosh, the Mac 128
- The first affordable computer with a graphical interface
- 1991 – Apple introduced the Powerbook
- The first really accepted laptop computer with Macintosh graphics
- 1993 – Apple introduced the Newton
- The first “writable” personal digital assistant (PDA), which ultimately bombed but led to a whole new market for PDAs dominated by Palm for many years
- 1999 – Apple introduced the iMac
- One of the first self-contained desktop computer in five dazzling colors. It was really a Macintosh but with a larger screen and more appealing design.
- 2001 – Apple introduced the first iPod
- Distinguished by its small size, large capacity, and remarkable industrial design features and simple user interface. The iPod ultimately disrupted the MP3 market and generated huge profits for Apple
- 2001 – Apple introduces iTunes
- Disrupted the downloadable music market by creating a legal channel to sell music directly to iPod users. iTunes became e genre of its own and also generated huge profits.
- 2006 – Apple introduces the Macbook series
- Completed the transition from iBooks to Intel chips with faster speed. Innovations included a magnetic latch, industrial design, and recessed keyboard with a better feel.
- 2007 – Apple introduces the iPhone and the iPhone 3G and 3Gs in subsequent years
- Disrupted the cell phone and PDA markets. Described by Steve Jobs as “a wide-screen iPod with hand controls… a revolutionary mobile phone… [and] a breakthrough Internet communications device,” the iPhone was the first Apple-branded consumer device to run on OS X. Based around a touch-based user interface with a single button, the iPhone was controlled using a variety of one- and two-finger gestured
- 2007 – Apple TV
- Apple’s official first foray into the set-top market. Running a closed, custom build of Mac OS X (based on v10.4.7), the Apple TV allowed streaming of audio and video from any iTunes-equipped computer on the local network, acting as a single FrontRow-style interface for all computers in a household.
- 2010 – January 27th, Apple introduces the iPad
- Obviously it’s very early but targeted to disrupt low end net-books, tablet PCs, and eBook readers like the Kindle. Steve Jobs said Apple tried to dramatically improve email, web browsing, managing photos, reading eBooks and more using Apple’s distinctive design and engineering to disrupt. (Read David Pogue’s take on the iPad at http://pogue.blogs.nytimes.com/2010/01/27/the-apple-ipad-first-impressions/?src=tptw)