Apple Innovation, product, service, process and business model.

UNDERSTANDING INNOVATION, Apple case study.
Its a buzz word but still for most people a mystery and something that only either the genius?s or the high techies of this world can can do?
Here is an overview intended to make innovation more transparent by using graphic techniques we use with students when we review and analyse around 150 recently occurring and real innovations over a 10 week period. Students have told us that it has taught them how important it is be very aware of everything happening around any business they are working for.
Apple innovation is shown to demonstrate use of the graphic.
graphics are copyright Parsons/Rose.

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Here is a simple explanation of the 4 types of innovation,

product, services, business model and process, ?of which three ( and occasionally 4 ) are usually present in innovative businesses to varying degrees. To help understanding of the interrelationship between them and the marketplace they are represented in our specially designed graphic matrix. (copyright Parsons/Rose)
The first type is the business model.

business model innovation

This expression ?business model? was rarely used before the dot-com boom/bust of the c2000 but since then is frequently used because investors in particular need to know just how a business is going to organise itself to ensure its income streams. Secondly because after a 150 years of model stability, the Internet is now disrupting many long-standing business models, amongst them publishing companies of almost every type including newspapers and magazines books and even digital games. Let?s place the business model here on our matrix.

?process innovation?.

Is the least visible within a company but its the very heart of all innovation and is in essence the very core of any company. ?governments around the world are particularly keen on supporting innovation because it creates jobs and usually improves productivity. Increased productivity means in the longer term an increase in standard of living. Indeed process innovation is what defines the ascent of mankind, from the stone, bronze and iron ages to the defining process innovations of our current age, textiles beginning in Lancashire UK in 1750, mass production by Ford in 1910, lean manufacturing by Toyota in the 1980?s and of course the digital revolution.

Productivity is in the long-term the only thing which can improve our standard of living which is why it?s important to governments. one thing we should be aware of is that as soon as any company in the open market *launches new product or service then their competitors are looking at how they can replicate a similar product or service which they might either improve or make at a lower price. It is absolutely critical therefore that companies look at their own internal ?process? innovation to keep the company competitive and healthy. )* organisations not within the open market or competing for business are not subject to the need to search for productivity improvements which is why the UK is often trying to introduce privatization initiatives.

PRODUCT INNOVATION -

A casual observer might assume that product innovation is the only type, and most people follow new product launches, at least within their own industry. What essentially drives new product innovation is process innovation. Once any new product is launched successfully, then competitors are looking to see if they can make it at lower cost or lower specification, which ?means the first mover has to drive process innovation faster and further to lower costs.

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The last type of innovation is ?services?
which account for more than 50% of developed economies and include everything from banking to retail to utilities such as gas and electric water and telecoms. Services are ?market facing of course. There has been a long-term trend for companies to gradually shift from being a product based business to a service based business. A particularly interesting example of this is IBM who sold off most but not all of their product business to make a very successful shift into consulting which is service. Apple is a good example of a company succeeding very strongly, against this trend, in the product area, but they also have a very successful service business, iTunes. ?The close relationship between the service and the hardware is an important part of their success.

Here we have ?wrapped? the market place around the model to exhibit the extent to which each innovation type is market facing.

Process innovation is deeply hidden yet is what drives almost everything else.

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This chart works very well for analysing sport innovation, where we interviewed Dave Brailsford, head of British Cycling Performance xxx ?but in this case the?marketplace is replaced by???

Olympic medals, lots of them!

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APPLE INNOVATION ANALYSIS

This analysis shows how critical it is to be fully aware of emerging technologies and what they might do for your customers. ?In other words entrepreneurs dance with 2 questions; what?s needed and what?s possible. Steve Jobs showed himself the master of this dance.

Here?s what Apple?s Steve jobs would have found in the late 1990s, soon after he arrived back at Apple after founding Pixar.

1. SSD?s or solid-state drives are the key to apple products but actually predate HDDs (magnetic storage on rotating discs) and go back to the 1950s but cost and storage capacity stayed a long way behind HDD?s and it wasnt able to be used as an alternative drive in a PC until around 1995. In 2005 Samsung the Korean giant declared SSD?s to be strategic products and today are predicting that SSD?s will replace HDD?s in all PCs within the next few years. SSD?s aka ?flash drives? are similar to camera flash drives and are much smaller and less sensitive to knocks than HDD?s, and there is no spin up time as with a HDD and so very suitable for consumer products which might be dropped and zero start-up time is a big asset. ?See this story on Engadget is the best I have found http://www.engadget.com/2011/10/31/engadget-primed-ssds-and-you/#consumer
2. The state of the music industry was already under a very grave threat as the consumer offer shifted from the old analogue tapes and discs into digital which could be already copied. But then with the Internet boom that copying accelerated dramatically with?file-sharing?sites resulting in a long drawn out legal battle where illegal?down-loaders?were pursued around the world and illegal sharing sites eventually shut down.

The Apple iPod was launched in 2001 and at this early stage was simply product and process innovation only, with a well-known click wheel UI ( User Interface) and it enabled users to copy music CD tracks on to it or download them from Internet.

2003 was great breakthrough for Apple with the introduction of the multi-touchscreen UI
(again as with SSD?s the technology had been known for a considerable period) the introduction of iTunes, which essentially was the ?platform? which turbocharged the Apple business. this was business model innovation at its very best.

The 2008 Launch of the iPhone and ?App? store ?was not only a consolidation of Apple?s platform strategy but the understanding of the need for different types of simple low cost programs
when using finger touch screens. ?and these low-cost programmes could only be bought from Apple who took a 30% cut from the selling price.

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2010 saw the introduction of the iPAD which took the technologies across the boundaries into the PC arena.

And the result is an explosion of innovations from around the world.

MS launched their competitor pads in October 2012, very late to the scene, long after all the many Android tablets arrived.

Here is the 4 types chart as used in our workshop discussions which serves as a summary and analysis

From an entrepreneurs and business managers perspective there are many more sub- types and innovation theories which are extremely useful for successful execution of ideas in the marketplace. Here is a short overview:-http://innovation-for-extremes.net/blog/innovation-types

Our annual Innovation conference is
http://innovation-for-extremes.net/conference
and blogging at:-
http://innovation-for-extremes.net/blog/category/blog

graphics are copyright Parsons/Rose.

About Mike Parsons

A lifetime in outdoor activities ( bike, ski , climb, mountaineer, kayak, backpack) and creating some iconic products - Karrimor; Karrimat, KSB, Haston Alpiniste, Jaguar, Hot Ice, KS-110e, KIMM, followed by a new start up in lightweight gear, OMM based on the original 1968 2 day mountain marathon. A chance phone call in 2000 from a certain Mary B. Rose of Lancaster University Management School resulted in me becoming co-author on the first history of outdoor product innovation which then lead on to a teaching collaboration, teaching innovation as a subject to u/grads and p/grads and last but not least being appointed 'innovator-in-residence'.

Source: http://innovation-for-extremes.net/blog/understanding-innovation-apple-case-study

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