Innovation has contributed to tremendous success at Apple. The innovation shepherded by the late Steve Jobs, Apple founder and returning CEO, earned the company the distinction of being the then most valuable company in the world.
Yet, more than ten years after its introduction, Apple’s flagship innovation success, the iPhone, has continued to bring in close to two thirds of the company’s revenue. So, like many successful tech companies before it, Apple can’t ignore the reality of tech product life cycles. As tech products mature, even spectacular successes like Apple can eventually be vulnerable to downturn. To Apple’s credit, however, its management seems to recognize tech’s life cycle vulnerability and appears to be striving for less dependence on iPhone sales. But, as Apple pursues additional innovation, the company needs to be strategically selective about what it decides to develop and commercialize.
Recent weakness in some of Apple’s numbers serve as a reminder that even the world’s most successful innovators need a strategy. The February 19, 2019 Wall Street Journal article “Apple’s Executive Shake-Up Underscores Focus on the Future“ by Tripp Mickle points out that Apple was implementing changes and reassessing priorities in order to address future growth challenges. According to the article, Apple cut staff that worked on autonomous car technology, also changed the leadership at the helm of its retail stores, and promoted its AI (artificial intelligence) chief to its executive team.
As I see it based on my years of research, all of this highlights the importance of making the right kind of strategic choices. Even a company with an innovation track record like Apple’s needs a strategy to move forward, especially when signs of weakness begin to surface. And, successful strategy generally builds on strengths.
That’s why Apple’s decision to cut back in its driverless car area could be a reasonable move, since some of the other areas Apple has been working on may more closely fit the company’s strengths. However, as I said in previous writing, there can be good reasons why highly sophisticated technology companies pursue up and coming areas, even if it’s not the best fit with their strengths. Pursuing those areas can enhance a company’s reputation for the state-of-the art, which can help attract and retain talent, as well as possibly provide expertise that might have value later.
For example, Apple’s pursuit of driverless technology may not be an ideal fit, but still could have value, even if Apple chooses to de-emphasize autonomous cars. AI plays a role in driverless vehicle technology and, by promoting its AI chief to the executive team, Apple seems to signal AI’s importance in the company. According to the Wall Street Journal article, Apple’s AI chief was a recruit from Google and his role includes enhancing Siri, Apple’s voice activated personal assistant. Both Siri and driverless cars use AI, although Siri’s use of AI emphasizes voice recognition, while AI in driverless technology is oriented toward the autonomous car’s visual perception of items such as pavement, vehicles, pedestrians, and any obstacles in the road.
Nonetheless, Apple is at a point where it needs to choose routes to growth that are most likely to work well. It needs to make strategic choices that can take the company forward and build upon its past success. Thus, Apple may benefit from focusing upon areas better tied with its strengths than driverless technology may be. After all, like any successful company, Apple needs a strategy. And, Apple needs to be selective about what innovations to pursue.