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Apple really really need to focus on starting new product lines. The biggest mistake companies often make at this stage is "it's not for us if it's not going to

by sytelus 11y ago

Apple really really need to focus on starting new product lines. The biggest mistake companies often make at this stage is "it's not for us if it's not going to be billion dollar business" mindset. Apple should just go after every product that it can produce at significant improvement. Everything from kitchen microwave to digital picture frame to 3D printers to quadcopters to children's toys is a fair area to explore. This will require balancing resources between mature products and new products, aggressive talent acquisition and product life cycle management that scales to 100s of products. Companies with cash flow like Apple should be announcing new product every quarter. Instead of trying to optimize for one product and get all possible thud for once-a-year event they should spread out their events over more eggs in the basket. Some of the products will only sell few million and may not move the needle but as long as Apple had good return on their total investment, it should be ok.For example, they can easily spin up team of just 10 people to produce digital photo frames and it's not going to be billion dollar market but if it makes revenue in access of 10 million, it's prett good ROI. Eventually the long tail of small products should be much more anti-fragile and sustainable for large margins. This is exactly opposite to what Jobs wanted (focus on 2 or 3 things). I think Jobs philosophy was necessary as long as there was one super good guy who needed to make all the calls. This is extremely fragile system. A much better system is 100s of product designers working on 100s of internal experiments and 10% of those passes internal scrutiny on quality and advancement of art to finally face the market except that not every product is expected to become billion dollar market. Just 10s of million dollar market supported by small a team should be good enough. Create a long tail instead of keep looking for that lucky unicorn.

gareim 11y ago
The day I notice them doing this is the day I sell any shares I own in Apple. Maybe it works in the short term, but going into "100s of products" dilutes not just the brand, but the attention to detail as well. When I walk into an Apple store, I see the three main product lines and I see a few others scattered. I see a great staff (35 floor employees on a Thursday afternoon!) helping people with new purchases, teaching people how to use their Macs, and occasionally a tutorial on a specific subject. In your vision, I would be walking into a Walmart.
- sytelus 11y ago
  You will be very likely forced to sell your shares in their current model much more faster :). The rules of economics detects that fat margins are not protectable over long run. Eventually competitors will meet minimum bar and start eating away your market share. That is exactly what's happening. The iPhone sales are on declining trajectory and iPad sales are already 25% down. Tablet market is actually booming but people are just buying cheaper ones that are good enough instead of twice expensive and better than good enough. The market for luxury goods have never been large and often ends up becoming niche. Your assertion about brand dilution and attention to detail are incorrect. Good brands have been able to scale historically. GE - in their heydays - was worshipped for its ability to deliver countless appliances designed with very high quality, innovations and care. HP in its heyday had 100s of products known for its innovation and quality. Microsoft in its heyday had dozens of products that were either in top or close second in their category. Pepsi Co currently produces 100s of products under different brand names, many of them huge market leaders. Google has dozens of products (Email, maps, news, book search, scholar, docs etc etc) - all of which are pretty high quality and either in top or close. Eventually companies don't sell product, they sell their philosophy and culture. Only anti-fragile way for long term survival is ability to scale and embed this philosophy without single braking point and by creating a long tail. Apple's strength is to apply design to make superior products. They need to scale this strength to work on every aspect of life instead of just 3 devices. You should also read Talib's book on anti-fragility. Apple's (and Jobs) strategy is anti-thesis of that philosophy. Businesses are rewarded because others can't copy them easily. Apple will be rewarded if they can scale their design philosophy and process precisely because others have failed to do so. PS: it's pretty bad form to down-vote because you don't agree with opinion.
  - scarface74 11y ago
    But there are two companies that have been able to charge a premium for decades even when there were lower cost alternatives - Apple and Microsoft. Apple has been selling computers for almost 40 years that cost more than their competitors. The average selling cost of Macs are still much higher than the industry average. The fact that Microsoft can sell any of their products at all when most people could easily use free open source alternatives means that MS must have some type of competitive advantage. For both companies, good enough is not good enough for their customer base. For me personally, the integration of their products is a reason I choose them.
jevgeni 11y ago
This has been done before and it's called GE.
- scarface74 11y ago
  And look at what GE is doing now - they divided their financial business, their appliance business, and a while back their stake in NBC/Universal.
  - jevgeni 11y ago
    Exactly. I think turning Apple into a yet another conglomerate would effectively destroy it. And I don't really want that.
HappyTypist 11y ago
This will end up costing billions by diluting brand value.

by sytelus 11y ago

gareim 11y ago

The day I notice them doing this is the day I sell any shares I own in Apple. Maybe it works in the short term, but going into "100s of products" dilutes not just the brand, but the attention to detail as well. When I walk into an Apple store, I see the three main product lines and I see a few others scattered. I see a great staff (35 floor employees on a Thursday afternoon!) helping people with new purchases, teaching people how to use their Macs, and occasionally a tutorial on a specific subject. In your vision, I would be walking into a Walmart.

sytelus 11y ago
You will be very likely forced to sell your shares in their current model much more faster :). The rules of economics detects that fat margins are not protectable over long run. Eventually competitors will meet minimum bar and start eating away your market share. That is exactly what's happening. The iPhone sales are on declining trajectory and iPad sales are already 25% down. Tablet market is actually booming but people are just buying cheaper ones that are good enough instead of twice expensive and better than good enough. The market for luxury goods have never been large and often ends up becoming niche. Your assertion about brand dilution and attention to detail are incorrect. Good brands have been able to scale historically. GE - in their heydays - was worshipped for its ability to deliver countless appliances designed with very high quality, innovations and care. HP in its heyday had 100s of products known for its innovation and quality. Microsoft in its heyday had dozens of products that were either in top or close second in their category. Pepsi Co currently produces 100s of products under different brand names, many of them huge market leaders. Google has dozens of products (Email, maps, news, book search, scholar, docs etc etc) - all of which are pretty high quality and either in top or close. Eventually companies don't sell product, they sell their philosophy and culture. Only anti-fragile way for long term survival is ability to scale and embed this philosophy without single braking point and by creating a long tail. Apple's strength is to apply design to make superior products. They need to scale this strength to work on every aspect of life instead of just 3 devices. You should also read Talib's book on anti-fragility. Apple's (and Jobs) strategy is anti-thesis of that philosophy. Businesses are rewarded because others can't copy them easily. Apple will be rewarded if they can scale their design philosophy and process precisely because others have failed to do so. PS: it's pretty bad form to down-vote because you don't agree with opinion.
- scarface74 11y ago
  But there are two companies that have been able to charge a premium for decades even when there were lower cost alternatives - Apple and Microsoft. Apple has been selling computers for almost 40 years that cost more than their competitors. The average selling cost of Macs are still much higher than the industry average. The fact that Microsoft can sell any of their products at all when most people could easily use free open source alternatives means that MS must have some type of competitive advantage. For both companies, good enough is not good enough for their customer base. For me personally, the integration of their products is a reason I choose them.

jevgeni 11y ago

This has been done before and it's called GE.

scarface74 11y ago
And look at what GE is doing now - they divided their financial business, their appliance business, and a while back their stake in NBC/Universal.
- jevgeni 11y ago
  Exactly. I think turning Apple into a yet another conglomerate would effectively destroy it. And I don't really want that.

HappyTypist 11y ago

This will end up costing billions by diluting brand value.