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Four Principles of Apple’s Successes (and Failures)

Tags: Apple Inc., Marketing Research, Marketing, Apple, Steve Jobs, Management, Innovation, Design, iPod, iPhone, Strategy, RoundUp, Chris Morrison

As the story goes, when Steve Jobs looked around Apple in 2002, he saw a profusion of gadgets: cell phones, PDAs, and MP3 players (including Apple’s blockbuster, the iPod). In a flash of brilliance, he asked himself a world-changing question: What if all those functions could be combined in just one device? The answer to that insightful question led to Apple’s next hit: the Rokr cell phone.

Whoops, scratch that. The Rokr was a commercial flop, and Apple’s short-lived partnership to develop an MP3 cell phone with Motorola is now an embarrassing footnote. In no small part, the iPhone exists today because the Rokr threw the shortcomings of the mobile phone industry into sharp relief. Smelling the industry’s stagnation, Jobs began planning the iPhone, even as the Rokr drew withering criticism.

The above anecdote highlights one important thing to remember about Apple: Its aura of infallibility is pure bunkum. The other thing to remember is that Apple learns from its mistakes. In fact, mistakes are vital to its creative process. But what are the rules that govern this process? Here are four of the most important principles.

Principle One: Don’t Follow Your Customers; Lead Them

Apple’s design process differs from that of most other companies. Traditional design research relies heavily on focus groups and customer feedback about existing products. Apple tends to place less emphasis on evidence than on intuition, under the theory that consumers can’t tell you they want a product or function if they can’t yet envision it. Instead, they need to be shown a superior alternative. Apple sees itself as being in business to create those revolutionary alternatives.

Principle Two: Temper Engineering With Art

Most companies that try to operate like Apple fail. Often that’s because of who they tap to spearhead the creative process. High-tech devices are built by engineers — and often designed by them, too. Unfortunately, engineers tend to design products that they would want to use, which explains why a typical device is jam-packed with a hopelessly confusing array of features. Apple has succeeded by making sure its top decision makers all subscribe to the same minimalist philosophy. The result is that the most-used features of its devices — like the iPod’s famous scroll wheel — feel entirely natural.

Principle Three: Focus on the Few to Sell to the Many

Instead of trying to satisfy every fringe taste or market niche — other companies that make laptops, for instance, often sell dozens of models at any given time — Apple focuses on just a few products in each category. With time and money on its side, Apple strives to make each item in its relatively small stable as perfect as possible. Over time, that helps differentiate the products and build customer loyalty.

Principle Four: Be Your Own Toughest Critic

The final ingredient to Apple’s success is an intangible energy and interest in doing well. And if the company ever lets that vitality go, it’s game over. (That’s what almost happened during the 1990s, before Jobs returned to provide a vital kick start.) Ultimately, Apple succeeds because it not only beats its competitors but also strives each year to beat itself. As management guru Peter Drucker noted long ago, “Your being the one who makes your products, process, or service obsolete is the only way to prevent your competitor from doing so.” In the process of trying to outdo itself, Apple often leaves its competition in the dust.

 
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  •  
    1

    john@...

    08/11/09 | Report as spam

    Five Principles

    All four of your Principles are true, but as usual you over look the
    number one Principle and the center of all Apple products; the
    operating system that is designed to make all products user friendly,
    intuitive, and virtually eliminate the need for a users manual.

    Anyone can sit down in front a Mac computer, pick up and iPod or
    iPhone, and learn to use them within minutes.

    Apple products makes it customers look intelligent and feel good about
    themselves.

  •  
    2

    pradyot

    08/11/09 | Report as spam

    RE: Four Principles of Apple?s Successes (and Failures)

    Chris, I enjoyed reading and agreed 100% on the principles. I loved how you phrased "Apple tends to place less emphasis on evidence than on intuition". Beautiful.

    Also the way you have mentioned, these are the same reasons Apple has failed. Or anyone else, who tries blindly can fail.

    In the second principle, I thought you left it at the title and could not elaborate. I guess, it is worth acknowledging the fact that most of the firms (even some of the top design firms) fail to get "Art & Technology" right. Mostly their collaboration is tilted -- either creatives run with the ideas (and let tech whine), or the tech put creatives in a corner (inside a Box). It is rare to have good teaming of tech and creatives, forget the "Tempering Engineering with Art" thing.

    It is also worth pointing that it is not rare for "Tempering Engineering with Art" to happen across the industry. It mostly becomes really ugly because some people, with extremely bad taste, are in the position where they love exactly that -- "Tempering Engineering with Art". It is worth mentioning in that regard that Steve Job not only had the instinct to be right, he also had the "Jonathan Ivy" for validation and craftmanship.

    Pradyot Rai

  •  
    3

    supereric

    08/12/09 | Report as spam

    RE: Four Principles of Apple?s Successes (and Failures)

    Well said, and I like the way you say it.

    There's only one thing I might add as a minor criticism of
    Apple: "Leading your customers" (while revolutionary, in
    theory) only goes so far. It's an arrogant stance that will be
    harder and harder to support when they are no longer the
    underdog. There is a palpable lack of transparency that
    Apple shows to its customers and vocal critics, and they
    need to work on that, especially if they continue to move
    beyond the realm of programming + product design and into
    the fickle world of consumer entertainment. (I say this as a
    serious evangelist for Apple who wants to see them
    succeed.)

    Great post,

    E

  •  
    4

    bharathkb87

    08/12/09 | Report as spam

    RE: Four Principles of Apple?s Successes (and Failures)

    WHY DO THE OTHERS MISERABLY FAIL TO ADOPT THESE PRINCIPLES?

  •  
    5

    leebeck33

    08/12/09 | Report as spam

    RE: Four Principles of Apple?s Successes (and Failures)

    Principle One: Don?t Follow Your Customers; Lead Them

    That is exactly the strategy that Dell pursues, and look where it has gotten them. I pitched Dell for business a few years ago (it involved the company wading into a new market), and was politely told that Dell doesn't create new products, it follows market niches and attempts to undercut the price of the competition.

    What I wanted to know was, what motivated those people to get out of bed and go to work in the morning?

    http://www.linkedin.com/in/leebeck

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    6

    Spiritusindomit@...

    08/12/09 | Report as spam

    I disagree with principle 3

    If principle 3 were true, they'd be outselling every other brand of computer on earth. In truth, their major profits come from the simplest of their devices.

  •  
    7

    travis24

    08/12/09 | Report as spam

    RE: Four Principles of Apple?s Successes (and Failures)

    Inspiring and Insightful...

  •  
    8

    Jperl

    08/12/09 | Report as spam

    John@

    "All four of your Principles are true, but as usual you over look the
    number one Principle and the center of all Apple products; the
    operating system that is designed to make all products user friendly,
    intuitive, and virtually eliminate the need for a users manual."


    Linux? No, they don't make that. They make a clunky, proprietary OS that's meant for small children. Anyone worth their salt won't be afraid to try Xubuntu, Ubuntu, etc. At least with these you can still use what we used to call "IBM Compatible" software.

  •  
    9

    vivekmp

    08/13/09 | Report as spam

    RE: Four Principles of Apple?s Successes (and Failures)

    Excellent observations, I agree with the views in the article. I think one of the major sucess of Apple is to blend a perfect match of Technology, Art and Human interface.

  •  
    10

    krquet

    08/15/09 | Report as spam

    RE: Four Principles of Apple?s Successes (and Failures)

    It would have been refreshing indeed to see a well researched article educating the readers of an accurate portrayal of a great business strategy standard of our generation, namely the modern Apple Inc. Instead, I have sadly noted that the author, Mr. Morrison, have made a hash of an assumption that Apple (and Motorola) had committed a horrendous mistake with Rokr which ought to be an embarrassing footnote hereon.

    That is some serious assumption in play there, where the author mistook with the notion that a product fail is ever equal to poor strategy/execution. It does not seem to have entered his mind that it could be an intentional purpose if not a brilliant ploy in disguise as well.
    A solid business strategist currently working in fortune 500 would have a field day with this. I can't be troubled to provide countless of text book examples of such, but suffice it is to offer just this:

    There was a great profile published on Steve Jobs's business acumen in 2007 shortly after the introduction of the iPhone. There it was reported that Steve Jobs was already working on the preliminary stages of the iPhone, but his engineers lacked the knowledge of the cell phone technology and especially the design of radio communication integration required between the iPod and the phone. They couldn't just hire some cell industry engineers without giving away their secrets, and besides, Apple was looking for more on the viability and some quality analysis before even a preliminary design process would commence. How do you do that without developing a phone and try it out with the customers without even design it in house?

    Steve being Steve, a natural genius and a brilliant strategist, opened up iTunes to Motorola which they have been asking for awhile anyway, in return to gain access to cell phone designs from the inside, mainly the radio communication and the proprietary low level constant signal feedback between the cell towers and the devices.
    Apple, made sure Rokr was a failure, or at least certainly didn't offer any help for it to succeed. They eventually had the final laugh with the introduction of iPhone just couple years later.

    Don't believe me research yourself: http://theappleblog.com/2005/11/09/did-apple-sabotage-the-rokr/

    Or acquaint yourself more on the great strategist: http://www.wired.com/gadgets/wireless/magazine/16-02/ff_iphone?currentPage=all

    Anyway, it's not bad that you didn't know, or can't guess all the hidden agendas and nuances of the modern corporate strategies. However, to have the audacity to quip based upon your own ignorance as, "Its aura of infallibility is pure bunkum. The other thing to remember is that Apple learns from its mistakes" ? albeit the final sentence rings true by itself, the whole thing comes across so hopelessly misinformed and yet preachy on your part.

    I so wished authors did their research before opining as a wannabe magi.

  •  
    11

    anandvikas

    08/19/09 | Report as spam

    RE: Four Principles of Apple?s Successes (and Failures)

    Good article and nicely written. There's loads to learn from the
    success all around, of course bits of failure is what kicks to go
    after the success.

    Chris, thanks for this concise to the point article.

  •  
    12

    saar22

    09/24/09 | Report as spam

    RE: Four Principles of Apple?s Successes (and Failures)

    All 4 are true.
    I agree with the views in the article.

    Games for kids
    Classic games
    Car games

  •  
    13

    Gery Sasko

    10/14/09 | Report as spam

    RE: Four Principles of Apple?s Successes (and Failures)

    Apple understands and influences its buyer niches better than any of its rivals. One of the ways that they do that is by always renewing company culture: they hire and "grow" its own talent from those niches. Their ads reinforce that image and their products, while comparatively few, generally hit the ball out of the park without sacrificing price premiums. Even when they fail with a new product (and they are not afraid to fail) the failed product has its "cool and distinctive" Apple attributes and often serves as a launchpad for something similar that hits the mark.

    Gery Sasko - President
    Intrafocus Management Consulting
    www.intrafocusmgt.com

  •  
    14

    UmarTalk

    10/19/09 | Report as spam

    RE: Four Principles of Apple?s Successes (and Failures)

    Excellent article..good to read and to implement

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