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Will Apple’s ‘Disruptive Innovation’ Product Strategy Continue On?

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The following is a very insightful ‘Disruptive Innovation’ genre quote per Apple Computers from the 24/7 Wall St. blog article ‘Apple Clobbers the Competition: The Carnage of Apple’s Spectacular Success’ (by Ashley Allen & Douglas McIntyre, 2010).  http://www.marketwatch.com/story/apples-destructive-power-2010-09-24?pagenumber=2 

“Apple is an anomaly.  It has the disruptive force of a startup and the consistent message of a mature company.  It is one of the largest tech companies, and yet it is a darling of Wall Street.  It is a hardware company that is also software company, content company and now consumer-electronics company.  It has manufactured not one but three revolutionary consumer products back-to-back, and all on a content distribution model that seems to evolve with the needs of the product.  It’s a killer because it continues to be the first to market and often times the only game in town”.

Being a technology driven company, Apple is driven by the technological challenges presented by the computer and electronics industry sectors.  But Apple is also driven by defining the new business models that need to be adopted in order to help propagate its disruptive-innovation based products.  Apple’s iTune has basically turned the recording (or record) industry on its head in that consumers can now purchase and download individual songs at home instead of having to pay for entire albums of songs bundled onto CDs at record stores.  As a result of this disruptive business model, record stores are now a thing of the past as iTunes has revolutionized the music industry at the retail level due to its lower costs, increased conveniences, and more desirable product selection changes.  As a response to this, many retail record stores then moved over to the movie/DVD side of the industry, but this extended business model has now met its demise as well due to the arrival of even more disruptive innovations in the movie industry per new online delivery technologies (e.g., better internet streaming methods immediately come to mind).

I’d now like to expound on the premise that Apple has been a real master at disrupting the environmental scanning attempts of its competitors via a “sleight of hand” (or misdirection) strategy favored by the late Steve Jobs.  This strategy has always caused much consternation with Apple’s competitors and industry analysts alike in their attempts to interpret and follow the product-line direction that Apple (as industry leader) is heading.  Apple is also willing to canibalize its own existing product lines as part of this misdirection strategy, which is disruptive from the standpoint that most competitors find themselves unable to continue following Apple’s lead due to the fact that they cannot cost-effectively canabalize their own product line while following and competing with the industry leader.  In effect, this “follow-the-leader” strategy becomes cost-prohibitive for Apple’s more cash-strapped competitors, who then either phase down or abandon entirely the particular product line that they are competing with for market share (e.g., HP’s Tablet product-line immediately comes to mind).  Apple’s huge cash position basically enables it to “toy” with its product-line competitors and weed out those who cannot afford to stay in the game with them (i.e., just about everyone). But I’m sure that the remaining competitors are now reassessing (i.e., retooling) their competing product-line strategies in the wake of Steve Jobs’ unfortunate demise as Apple may no longer be able to disruptively innovate without him.

NOTE:  Interested LinkedIn members are invited to join LinkedIn DT Group ‘Disruptive  Technologies’  http://www.linkedin.com/groups?about=&gid=1027037&trk=anet_ug_grppro .

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