Apple: Trend Reader

This is where Apple came in. In the computer industry, Apple is known as the innovator. The rest follow. Apple has consistently provided models of where the industry needs to go. Most PC manufacturers have made commodities, computers that are exchangeable parts housed in generic dark gray boxes. No wonder companies such as Gateway struggle, fighting for razor-thin profit margins, for such is the natural way of commodities. For the first time in the history of computers, saturation at the new millennium brought a slump in sales, and PC manufacturers are hit hard, because thin margins require large sales volumes. Apple, on the other hand, understands that this is the experience economy, and it has main­tained price premiums by focusing on the user experience. Apple has even moved its product beyond the experience economy to appeal to the nascent fantasy economy, which we describe in the next chapter. The line of iMacs are examples of high-styled products that rely on more than just the latest technology. Apple is a trend reader.

Of course, not all of Apple’s products have been perfect. Trend reading does not offer the imaginary promise of a look into a crystal ball. Apple went wrong by maintaining a proprietary operating system, insist­ing on delivering a complete hardware and software product. Because it kept competitors out, fewer Macs were available to the market. Fewer Macs meant fewer programs being written for them. Then, in the mid – 1990s, as the personal computer market flourished, Apple sought to join the other manufacturers in their Wal-Mart strategy—high volume and low costs. Apple fired innovator Steve Jobs and hired businessman John Scully. Scully focused on cutting costs and strayed from the company’s innovation mantra. The resulting lackluster products and poor quality almost sent Apple into bankruptcy. The return of Steve Jobs brought Apple back on the path to innovation, and Apple flourishes again after retaking the smaller but premium market. In spite of these problems, Apple has consistently brought out insightful products that other com­panies end up imitating. Apple is an ideas leader, consistently better at anticipating trends because it reads the trends, and its ideas not only tap pools of lead users but cross the chasm to the mainstream.

Focusing back on MP3s, the technology existed, and lead users had it, but no product had grabbed the attention of the rest of the market. Companies that are adept at developing new products recog­nize such situations and have learned to use design as a means to translate barely useable technology into useful, useable, and desirable products. For instance, Palm Computing built the wildly successful PDA out of the ashes of Apple’s Newton, Sharp’s Wizard, Microsoft’s

WinPad, and others. Technology is part of the equation, but equally important is the user interaction, ergonomics, and lifestyle features. Palm’s first PDA had a form factor far smaller than its predecessors and was truly portable and therefore usable. Apple’s computers, for example, have technical capability, are easy to use, and also look great. They set the standard rather than follow. They are the first products in the computer industry that look so good that they become the focus of a room rather than the blemish.

The same is true for the iPod. The iPod itself defines the con­temporary aesthetic for portability with its simple lines and white plastic shell and its intuitive and easy-to-navigate interface through its click wheel. At 6 ounces, it is light and fits in your pocket. But Apple went further. As if the iPod weren’t small enough, sleek enough, or beautiful enough, Apple introduced the iPod mini, which weighs less than 4 ounces, is significantly smaller, and comes in a variety of anodized aluminum finishes, and then Apple introduced the even smaller iPod shuffle.

All the uncertainty feared by the early majority is missing from this product. it is hip and cool, it is easy to use, it is affordable, and it is produced from a company that people trust. Apple invested in a great advertising campaign that communicates the positive experi­ence in making the product a part of the individual by having the sil­houette of an X – or Y-gen dancing to tunes with his or her iPod. In sum, it is the product that is taking the compressed digital audio for­mat across the chasm.