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> Apple will not sacrifice their cash cow for a comparatively niche market. I never understood that reasoning. As an individual, I can't simultaneously develop

> Apple will not sacrifice their cash cow for a comparatively niche market. I never understood that reasoning. As an individual, I can't simultaneously develop 10 different products, but a large company sitting on billions in cash could develop 1000 niche products simultaneously. In fact, some large companies (Procter & Gamble, 3M, General Electric) have thousands or tens of thousands of products. To use your Apple example, why couldn't Apple create a professional camera division, giving them $25 million startup money, and tell them to never bother the iPhone team, but do give them access to the source code, engineering drawings, and contacts in the supply chain. It seems very fashionable for tech companies to be very narrowly focused. They work on the one thing that is making the most money at that moment. If any experimental development isn't a wild success, it's shut down right away. All of those make sense if you're an individual or struggling startup, but if you have billions just sitting there, what's the harm in trying many things at once?

oblio 9y ago
Big companies usually work either by C-level exec fiat or by middle management promotion plans. Neither of which usually want small fish. If you work for a $100 billion company and you say: I need $25 million to pursue an idea that might make the company 2x or 3x, there's a good chance they'll say: no, sorry. We prefer to invest that $25 million to either improve our $5 billion product or invest in an idea that could become another $5 billion product. And from this we get the innovator's dilemma :)
- spiderfarmer 9y ago
  That's why they should take that 25 million and invest it in startups that might become competitors one day.
  - oblio 9y ago
    I don't think they're that afraid of digital camera startups :)
    - spiderfarmer 9y ago
      It's not about being afraid, it's about letting other companies try innovations that won't succeed within your own company.
  - akvadrako 9y ago
    It's just not elegant to try to put everything under one company. Better to buy back 25 million of stock from an investor, who can then buy one of those startups and run it independently.
icebraining 9y ago
what's the harm in trying many things at once? Bad PR when you eventually close them down. See Google: they ran Reader for eight years and gave people plenty of time to migrate. Half a decade later, it's still used as an example of why they can't be trusted. Regardless of whether that's justifiable or not, it's an harm to the company's image. Better to just dump money into external startups (see Google Ventures) and then acquire them if they're interesting.
Sacho 9y ago
I think there's several arguments why Apple would not want to attack this niche market. The strongest one is talent dilution. If they poach talent from existing teams, then the new project must be more profitable to make that a good idea. Building a new team from scratch is not an easy task - you need management that can guarantee the same level of productivity/QA that other teams have. The team leads that can produce this kind of top quality are rare - why would you spend them on the niche market instead of advancing your main product? (unless they can find a leader who is only interested in the camera niche) The second one would be the profitability of this niche market. Why wouldn't Apple just invest money in P&G stock(or whatever, I don't know much about the stock market) - do they really expect the investment into the camera niche market to bring better gains? I know Procter & Gamble owns a ton of brands, and I don't know if there's any cross-effect when one brand fails. My suspicion is that Apple won't be able to get away with low scrutiny, even if they spin off their own "NotAppleAtAll" cameras. This may be a third concern for them. Less related, but many of P&G's products are direct competitors, e.g. Ariel and Tide laundry detergent. Perhaps that's just not a business model that Apple is interested in pursuing?
sunsetandlabrea 9y ago
I think this is slightly changing at Apple, and in my opinion will slowly make things much worse. One of the first things Steve Jobs on returning to Apple did was to cull what he felt were unnecessary products, and product groups. You could argue that Apple is large enough now to have thousands of products, but what was clear is that Jobs had the defining vision and no single person can have a single defining vision of thousands of products. To use your example you cannot create a camera division and not allow inter-group communication because you are then building products in exactly the same way as someone like Sony. You end up with disconnected systems, nothing integrates together well and in-fighting between the groups. I remember looking for a 32" Sony TV a decade or so ago, and there were 5 or 6 different models all at slightly different price brackets and with different discounts everything became muddled. Sony of course were simply capturing every portion of the market they could, from the person who wanted the cheapest to the person who wants the best. I'd like to see Apple re-focus, make single models of iPhone, iPad, MacBook, iMac and the Apple Watch. Stop trying to capture as much of the market as possible and just focus on a limited number of highly integrated devices.
- djrogers 9y ago
  >I'd like to see Apple re-focus, make single models of .. MacBook, iMac Apple made multiple models of iMacs and MacBooks (and PowerBooks) under Jobs - I think this would be a horrible idea, for computers specifically you just can’t address everyones needs with one size of laptop/desktop screen.
jerf 9y ago
"As an individual, I can't simultaneously develop 10 different products, but a large company sitting on billions in cash could develop 1000 niche products simultaneously." Because the question faced by large companies, and even merely medium-sized and small companies, is not what can we do, but what's the best thing to do. If I've got a product line with 100 engineers that is making me a million per engineer, and I've got a product line with 5 engineers making a quarter million per engineer, and I decide I'm going to hire 10 more engineers, even though it is true that I can't guarantee that the scaling numbers will hold when I add more engineers, it is still often the rational choice to assign those 10 new engineers to my very profitable product. In fact it can make sense to eliminate the product line with 5 engineers and put them on the really profitable product. The fact that I could do 11 projects with 10 engineers each isn't very interesting because odds are that the other 10 projects won't be as profitable, and I won't get anywhere near as much money. Meanwhile, some other company in the market might very happily take on the less profitable, but still profitable, smaller niche. They can do it with different degrees of overhead, maybe in a different cheaper location, and perhaps with fewer compliance requirements bearing down on them, etc. There are, of course, endless, endless nuances and "what ifs" you could play. This comment is not a course in resource allocation for business. It's just a comment intended to point you in the direction of answering the question "Why don't GooFaceZonaSoft do all the things?" in a reasonable manner. It also explains why GooFaceZonaSoft still acts resource constrained quite often, and why despite the fact the tech industry tends to develop very large giants at the top there's always, always a ton of smaller companies and there's never any risk that the entire industry is all going to consolidate into one big company, because the first thing that mega corporation would do is divest a ton of the less profitable sub-businesses, which would promptly reform externally.
rhinoceraptor 9y ago
They only have so many people, and they’re already having trouble delivering the products they have now. I think the airpods are just now available in stores as of a couple weeks ago. And the same thing for the iPhone X, most people probably won’t have them until 2018.
kevinchen 9y ago
Been said many times before but I’ll say it again: If money could buy great products, Microsoft would still be relevant.
sgt101 9y ago
If you create a premium product that is successful but limits the room for your mass product you risk a competitor eating your mass product, if you don't limit the mass product then you likely trash your premium product. There needs to be a natural need for the premium offer that partitions the product space such as cost of materials or design, and allows you to pull huge margin from the niche to discount the risk you take on it.
r00fus 9y ago
This isn't Apple's MO. They are big on secrets, big on integration, big on higher ASP but fewer products (though that's changing with increased Apple's market cap). Apple continues to be unique and continues to be questioned as to the viability of their uniqueness. (edit: clarity)

oblio 9y ago

Big companies usually work either by C-level exec fiat or by middle management promotion plans. Neither of which usually want small fish. If you work for a $100 billion company and you say: I need $25 million to pursue an idea that might make the company 2x or 3x, there's a good chance they'll say: no, sorry. We prefer to invest that $25 million to either improve our $5 billion product or invest in an idea that could become another $5 billion product. And from this we get the innovator's dilemma :)

spiderfarmer 9y ago
That's why they should take that 25 million and invest it in startups that might become competitors one day.
- oblio 9y ago
  I don't think they're that afraid of digital camera startups :)
  - spiderfarmer 9y ago
    It's not about being afraid, it's about letting other companies try innovations that won't succeed within your own company.
- akvadrako 9y ago
  It's just not elegant to try to put everything under one company. Better to buy back 25 million of stock from an investor, who can then buy one of those startups and run it independently.

icebraining 9y ago

what's the harm in trying many things at once? Bad PR when you eventually close them down. See Google: they ran Reader for eight years and gave people plenty of time to migrate. Half a decade later, it's still used as an example of why they can't be trusted. Regardless of whether that's justifiable or not, it's an harm to the company's image. Better to just dump money into external startups (see Google Ventures) and then acquire them if they're interesting.

Sacho 9y ago

I think there's several arguments why Apple would not want to attack this niche market. The strongest one is talent dilution. If they poach talent from existing teams, then the new project must be more profitable to make that a good idea. Building a new team from scratch is not an easy task - you need management that can guarantee the same level of productivity/QA that other teams have. The team leads that can produce this kind of top quality are rare - why would you spend them on the niche market instead of advancing your main product? (unless they can find a leader who is only interested in the camera niche) The second one would be the profitability of this niche market. Why wouldn't Apple just invest money in P&G stock(or whatever, I don't know much about the stock market) - do they really expect the investment into the camera niche market to bring better gains? I know Procter & Gamble owns a ton of brands, and I don't know if there's any cross-effect when one brand fails. My suspicion is that Apple won't be able to get away with low scrutiny, even if they spin off their own "NotAppleAtAll" cameras. This may be a third concern for them. Less related, but many of P&G's products are direct competitors, e.g. Ariel and Tide laundry detergent. Perhaps that's just not a business model that Apple is interested in pursuing?

sunsetandlabrea 9y ago

I think this is slightly changing at Apple, and in my opinion will slowly make things much worse. One of the first things Steve Jobs on returning to Apple did was to cull what he felt were unnecessary products, and product groups. You could argue that Apple is large enough now to have thousands of products, but what was clear is that Jobs had the defining vision and no single person can have a single defining vision of thousands of products. To use your example you cannot create a camera division and not allow inter-group communication because you are then building products in exactly the same way as someone like Sony. You end up with disconnected systems, nothing integrates together well and in-fighting between the groups. I remember looking for a 32" Sony TV a decade or so ago, and there were 5 or 6 different models all at slightly different price brackets and with different discounts everything became muddled. Sony of course were simply capturing every portion of the market they could, from the person who wanted the cheapest to the person who wants the best. I'd like to see Apple re-focus, make single models of iPhone, iPad, MacBook, iMac and the Apple Watch. Stop trying to capture as much of the market as possible and just focus on a limited number of highly integrated devices.

djrogers 9y ago
>I'd like to see Apple re-focus, make single models of .. MacBook, iMac Apple made multiple models of iMacs and MacBooks (and PowerBooks) under Jobs - I think this would be a horrible idea, for computers specifically you just can’t address everyones needs with one size of laptop/desktop screen.

jerf 9y ago

"As an individual, I can't simultaneously develop 10 different products, but a large company sitting on billions in cash could develop 1000 niche products simultaneously." Because the question faced by large companies, and even merely medium-sized and small companies, is not what can we do, but what's the best thing to do. If I've got a product line with 100 engineers that is making me a million per engineer, and I've got a product line with 5 engineers making a quarter million per engineer, and I decide I'm going to hire 10 more engineers, even though it is true that I can't guarantee that the scaling numbers will hold when I add more engineers, it is still often the rational choice to assign those 10 new engineers to my very profitable product. In fact it can make sense to eliminate the product line with 5 engineers and put them on the really profitable product. The fact that I could do 11 projects with 10 engineers each isn't very interesting because odds are that the other 10 projects won't be as profitable, and I won't get anywhere near as much money. Meanwhile, some other company in the market might very happily take on the less profitable, but still profitable, smaller niche. They can do it with different degrees of overhead, maybe in a different cheaper location, and perhaps with fewer compliance requirements bearing down on them, etc. There are, of course, endless, endless nuances and "what ifs" you could play. This comment is not a course in resource allocation for business. It's just a comment intended to point you in the direction of answering the question "Why don't GooFaceZonaSoft do all the things?" in a reasonable manner. It also explains why GooFaceZonaSoft still acts resource constrained quite often, and why despite the fact the tech industry tends to develop very large giants at the top there's always, always a ton of smaller companies and there's never any risk that the entire industry is all going to consolidate into one big company, because the first thing that mega corporation would do is divest a ton of the less profitable sub-businesses, which would promptly reform externally.

rhinoceraptor 9y ago

They only have so many people, and they’re already having trouble delivering the products they have now. I think the airpods are just now available in stores as of a couple weeks ago. And the same thing for the iPhone X, most people probably won’t have them until 2018.

kevinchen 9y ago

Been said many times before but I’ll say it again: If money could buy great products, Microsoft would still be relevant.

sgt101 9y ago

If you create a premium product that is successful but limits the room for your mass product you risk a competitor eating your mass product, if you don't limit the mass product then you likely trash your premium product. There needs to be a natural need for the premium offer that partitions the product space such as cost of materials or design, and allows you to pull huge margin from the niche to discount the risk you take on it.

r00fus 9y ago

This isn't Apple's MO. They are big on secrets, big on integration, big on higher ASP but fewer products (though that's changing with increased Apple's market cap). Apple continues to be unique and continues to be questioned as to the viability of their uniqueness. (edit: clarity)