Apple Killed the Radio Star

When MTV launched on August 1, 1981, the first video played was “Video Killed the Radio Star” by the Buggles.  It was a warning shot across the bow of the “establishment” that the world was about to change.   I still remember where I was that day; at beach week with a bunch of other high school knuckleheads, wasting our day watching MTV instead of being on the beach.   It was our “big thing,” as we were to become the “MTV generation.”       

Last week, Apple basically made the same statement when they announced ICloud.  Steve Jobs proclaimed: “We’re going to demote the PC and Mac to just be a device…is equivalent to saying the “Cloud Killed the PC Star.”  An amazing comment coming from the company that helped create the personal computer segment with the Apple I and Apple II in 70’s & early 80’s. 

How is it that Apple - a company that was almost out of business 15 years ago - produces home run after home run, and now threatens to cannibalizing one of its core products, the MacBook?  What has changed over the last decade and a half?  Besides the obvious, including culture, resources, and talent, there are four key drivers of their success.  

1.     Learning from the past – Apple has learned that it no longer has to be the innovator of the technology; a learned behavior I attribute to observing the success of Microsoft.   Apple’s strategy has shifted to creating innovative products built off existing technology.   For example, the IPod was a better MP3 player (or DAP).  The IPhone is a better Smartphone.  The IPad – is an infinitely better version of a Netbook.  And the Cloud, not exactly born yesterday.

2.     Timing the market – Apple now allows others (similar to Microsoft) to create the market.  They model the adoption curve and introduce products just as consumer adoption is about to take off (typical 2-4 years after the technology is introduced).    This allows them to learn from consumer usage and hit the market at the right time with a better product. 

3.     It’s the App + the cool device – Apple learned this lesson early and probably applied it better than anyone in the industry.   Not only do they design a great looking product but they also get how consumers want to use it. And their open-source platform allows troves of software programmers and developers to create programs to be used and loved by the masses, further increasing the desirability to own their hardware.  Enabling that functionality also happens to create incredibly scalable revenue streams.  

4.     Being held accountable and challenged by customers– this is perhaps the most important success driver for Apple.  Each year Jobs knows he has to go in front of thousands of rabid Apple fans with something new.  There is no time to rest or to be complicit with their current success; Apple fans want to know what‘s next and desire to be wowed by it.  As a result, Apple has to constantly be in “innovation” mode.  This creates, maintains, and nurtures their culture.  We all know that often times, we produce our best work or solution for our most difficult customers and clients.  Apple embraces this and uses it to fuel future product development unlike any of their competitors or any other company for that matter. 

So what’s the next big thing for Apple?  Well, if you follow the formula above just track new technology innovations, give it 2-3 years and voila…a new Apple product.    In the meantime, look for the IPAD to take over the world.   My kids will be probably be known as the “IPAD generation.”