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Does Apple Need To Innovate?
 

Asatar's picture
O
(Neanderthal, 2,027
 
Points)
 on 8/9/12 at 2:30pm
Does Apple Need To Innovate?

I will preface by saying I am a huge fan of Apple and their products and own many of them so there may be some unknowing bias in this post!

Over the past few weeks and months the design of the next iPhone has been leaked so many times that, barring some incredible false-trails by Apple, we know what the next generation iPhone will look like. It will be taller than the 4 / 4S but the same width with a 4" screen, possibly a 2-tone metallic back, a 9 or 18 pin dock connector and will come with LTE and maybe even NFC. We even know that it is likely to be announced on September 12th and probably released on September 21st.

I would argue that this is not a "major redesign" and doesn't depart all that much from the iPhone 4 / 4S design. The fact that the iPhone (which is now producing so much money that by itself, it is more profitable than any other company in the world) is likely to remain mostly unchanged for 3 years in an incredibly fast-paced industry is testament to the strength of Apple's design.

For years now, Apple has followed the principal of release a product, then tweak the internals and keep the same design, then tweak the design. You can see it with the iPads, Macbook Pros and now iPhones. The Macbook Pro has remained unchanged since 2008, as has the Macbook Air. The Mac Pro has used the same enclosure since around 2006 and the iMac has been the same since 2006.

So just by looking at product timelines and design refreshes, it is same to say that Apple is slowing down with its radical redesigns, why is this? I present two arguments:

1) They have decided that the designs they produced between 2008 and 2011 are pretty much perfect and all that can really be done is minor tweaks, reduce thickness, improve battery life and hardware specifications

2) They have realised that people like the current designs and that the masses WILL buy their products, so there is less need to spend lots of money on Jony Ive's design team and retooling

I would suggest that under Steve Jobs, the 1st option is more likely, but it is possible that under Tim Cook the 2nd idea is starting to become more prevalent. I personally love the designs they have at the moment and hate the giant, plastic Android phones out there and lets be honest, all the 10" tablets are carbon copies of the iPad (see Samsung vs Apple in court right now).

This post is a bit of an iToy Story but I would love to hear fellow monkey's opinions on the innovation and design refreshes at the largest and most successful company in the world, as well as the gadget industry in general!

See my other WSO blog posts>
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Comments

melvvvar's picture

i love how all the android

(King Kong, 1,693
 
Points)
 on 8/9/12 at 3:02pm

i love how all the android users have to try so hard to convince me that their stuff is better than apple's. i pay for quality and i get it.

Addinator's picture

Apple needs to focus first

ST
 
Points)
 on 8/9/12 at 3:16pm

Apple needs to focus first and foremost on keeping users tied into their ecosystem such that switching costs become high enough people won't change going forward. It is that ecosystem and tying together of different platforms that allows apple to command such a broad scope of the market. To some extent they don't need to revolutionize the Iphone at this point, simply give it more and different features to go along with some hardware upgrades. I still think that as long as the ecosystem, operating systems and the user experience are first class and some of the most integrated around they isolate themselves from competition totally coming in on them.

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BTbanker's picture

My Droid X crashes almost 3-4

IB
 
Points)
 on 8/9/12 at 3:19pm

My Droid X crashes almost 3-4 times a day. So fucking sick of it and I'm definitely getting the iPhone 5.

"A man generally has two reasons for doing anything. One that sounds good, and the real one." - J.P. Morgan

Bobb's picture

It does't matter what they

AM
 
Points)
 on 8/9/12 at 4:14pm

It does't matter what they release, it will sell. They ahve released a duplicate phone the past two years only to see record sales. They should innovate because its greate for the consumer, but they don't have to.

rls's picture

Not true on several accounts-

HF
(Orangutan, 367
 
Points)
 on 8/9/12 at 4:28pm

Not true on several accounts- the MacBook Air was re-designed in 2010. The MacBook Pro was JUST re-designed a few weeks ago- they put in a Retina Display and took out the CD/DVD-ROM. There are design requirement laptops have to have- a keyboard and screen, trackpad, ports, etc. If you want a rework so that it looks completely different, that is an unrealistic expectation.

Of course, Apple needs and does innovate. However, because it is the most followed, most examined, and largest publicly traded company- everybody's a critic and can offer advise to some of the most gifted design teams and businesspeople of our time. Look, how often do car companies redesign a car line? About every 4-5 years. The iPhone 4S has a 2 year-old design. Apple's design department (with certain products) has been prodigious in the number of changes they introduced over the last 10 years. Frankly, there is a psychological aspect to radically changing your product too often.

*Saudi Aramco is likely the largest company in the world, although it is not publicly traded and state-owned.

Bene qui latuit, bene vixit- Ovid

Asatar's picture

rls: Not true on several

O
(Neanderthal, 2,027
 
Points)
 on 8/9/12 at 5:18pm
rls:

Not true on several accounts- the MacBook Air was re-designed in 2010. The MacBook Pro was JUST re-designed a few weeks ago- they put in a Retina Display and took out the CD/DVD-ROM. There are design requirement laptops have to have- a keyboard and screen, trackpad, ports, etc. If you want a rework so that it looks completely different, that is an unrealistic expectation.

Of course, Apple needs and does innovate. However, because it is the most followed, most examined, and largest publicly traded company- everybody's a critic and can offer advise to some of the most gifted design teams and businesspeople of our time. Look, how often do car companies redesign a car line? About every 4-5 years. The iPhone 4S has a 2 year-old design. Apple's design department (with certain products) has been prodigious in the number of changes they introduced over the last 10 years. Frankly, there is a psychological aspect to radically changing your product too often.

*Saudi Aramco is likely the largest company in the world, although it is not publicly traded and state-owned.

Macbook Air was refreshed but was certainly not a radical redesign in 2010, similar to what is expected of the new iPhone versus the 4/4S. The Retina Macbook Pro is really a different product line and the refreshed 2012 Macbook Pros are identical to the late 2008 unibody models.

See my other WSO blog posts>

fuzzieWuzzie's picture

My ED has been pushing me to

PE
(Chimp, 9
 
Points)
 on 8/9/12 at 5:28pm

My ED has been pushing me to get an "up to date phone" for a few years. I own an old BB world phone. It has done me well for the past 7 ish years. I'm waiting till the IPhone 5 comes out to compare it to the best Android (S3?). Any input? I work in PE and get 100+ emails (need to open up attachments) and text a day. I also travel a lot and would like use my phone for entertainment as well.

Honesty is the best policy...If there is money in it- Mark Twain

Asatar's picture

fuzzieWuzzie: My ED has been

O
(Neanderthal, 2,027
 
Points)
 on 8/9/12 at 5:53pm
fuzzieWuzzie:

My ED has been pushing me to get an "up to date phone" for a few years. I own an old BB world phone. It has done me well for the past 7 ish years. I'm waiting till the IPhone 5 comes out to compare it to the best Android (S3?). Any input? I work in PE and get 100+ emails (need to open up attachments) and text a day. I also travel a lot and would like use my phone for entertainment as well.

You'll never really never a balanced response on this as people seem to either love Apple / Samsung products or hate them. Personally, I would recommend an iPhone :) Basically if you want a very large screen, tons of customisability and techy features go for the S3. If you want a high quality phone with a simple-yet-solid operating system go with the iPhone.

See my other WSO blog posts>

SirTradesaLot's picture

The answer is yes, they need

 
Points)
 on 8/9/12 at 6:26pm

The answer is yes, they need to keep innovating if they want to stay on the top of the heap. In the '90's, Apple was a tiny company that few cared about. It would take a lot for them to fall that far from here, but the world is littered with the carcasses of former market leaders.

Turbo leverage for capital explosion -- BD Capital

My WSO Blog

drexelalum11's picture

Of course AAPL should

O
(Neanderthal, 3,635
 
Points)
 on 8/9/12 at 6:29pm

Of course AAPL should innovate. However, they have decided that patent litigation is a superior profit maximisation strategy. In a way, this makes sense. MSFT has a dominant market position in OS, Productivity, and Enterprise, but has squandered billions attempting to improve these products or create whole new divisions. If MSFT could have continued producing Windows and Office 95 w/o any competition, they would be massively more valuable than they are now, with all the Live/xBox/Bing bloat. The fact is, creating good new products is hard - there's a reason VC returns are so shitty. Thus, AAPL is trying to combine two strategies. A) maintain monopoly pricing through patent lawsuits, B) planned obsolescence and marginal improvements to improve ARPU through price discrimination and upgrade cycles. The latter is perfectly normal across industries, from healthcare to automotive. The former is relatively new as AAPL is applying, but is an age-old profit maximisation strategy where steve Jobs really made his money, media.

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TheRussian's picture

I don't want an Iphone simply

(Chimp, 2
 
Points)
 on 8/9/12 at 6:31pm

I don't want an Iphone simply because everyone has it. Go on the subway and everybody has their ears plugged with signature white earphones. On the other hand have you seen the new S3? What about S2? They sure look good. But I will keep my annoying red blinking light piece of crap crackberry phone for now.

jet's picture

fuzzieWuzzie: My ED has been

(Chimp, 12
 
Points)
 on 8/9/12 at 6:33pm
fuzzieWuzzie:

My ED has been pushing me to get an "up to date phone" for a few years. I own an old BB world phone. It has done me well for the past 7 ish years. I'm waiting till the IPhone 5 comes out to compare it to the best Android (S3?). Any input? I work in PE and get 100+ emails (need to open up attachments) and text a day. I also travel a lot and would like use my phone for entertainment as well.

For 100+ emails/texts daily I don't see how a physical keyboard can be beat. BB + Android/iPhone?

ladubs111's picture

As David Einhorn stated in

IA
 
Points)
 on 8/9/12 at 6:34pm

As David Einhorn stated in his Q1 letter, Apple is a software company. They innovate more on software than design. its their integration with older hardware with their software that makes it good. My fucking Android phone can't even taking a fucking picture without freezing, and its only 9 months old. It also been trolling the fuck outta me and deleting my contacts. Fucking Samsung and Android. But on the positive note, LTE is real fast if you can find decent signal in NYC.

fuzzieWuzzie's picture

Asatar: fuzzieWuzzie: My ED

PE
(Chimp, 9
 
Points)
 on 8/9/12 at 6:36pm
Asatar:
fuzzieWuzzie:

My ED has been pushing me to get an "up to date phone" for a few years. I own an old BB world phone. It has done me well for the past 7 ish years. I'm waiting till the IPhone 5 comes out to compare it to the best Android (S3?). Any input? I work in PE and get 100+ emails (need to open up attachments) and text a day. I also travel a lot and would like use my phone for entertainment as well.

You'll never really never a balanced response on this as people seem to either love Apple / Samsung products or hate them. Personally, I would recommend an iPhone :) Basically if you want a very large screen, tons of customisability and techy features go for the S3. If you want a high quality phone with a simple-yet-solid operating system go with the iPhone.

Frankly, I do knot know what I want. I wish there was a "test drive" so I could see how they really are. I use to be a proud member of the blackberry brotherhood but even I can tell it is lacking. My analysts' phones can do more than mine.

Honesty is the best policy...If there is money in it- Mark Twain

AQM's picture

On a tangent, what service do

IB
(Orangutan, 331
 
Points)
 on 8/9/12 at 7:05pm

On a tangent, what service do you guys use in NYC? I've been here for 2+ years and my contract with AT&T is about to end. The service is absolutely horrendous and I literally can't take phone calls effectively. I want to switch to either Verizon or Sprint. I'm leaning towards Verizon because I heard it's the best. Any personal anecdotes would be greatly appreciated!

Thanks WSO!

Full Pint's picture

If innovation means making an

AM
(Chimp, 6
 
Points)
 on 8/9/12 at 11:17pm
Toronto's picture

They might need to in another

 
Points)
 on 8/10/12 at 12:01am
ConanDBull's picture

I love my Galaxy S2... so

CO
(Gorilla, 542
 
Points)
 on 8/10/12 at 12:15am

"Know what to do, know how to do it, and do it hard." - Juan Castillo

If you are in the Toronto Area join my group "Toronto Prospective Monkeys"
http://www.wallstreetoasis.com/group/toronto-prosp...

wannabeaballer's picture

Apple is always innovating.

O
 
Points)
 on 8/10/12 at 12:20am

Gun Control Discussion

Mr.Saxman's picture

wannabeaballer: Apple is

IB
 
Points)
 on 8/10/12 at 12:52am
Veni Vidi Vici's picture

How innovative is Apple

EN
(Monkey, 65
 
Points)
 on 8/10/12 at 6:54am

"It's a little like wrestling a gorilla. You don't quit when you're tired you quit when the gorilla is tired"
-Robert Strauss

rls's picture

Asatar: rls: Not true on

HF
(Orangutan, 367
 
Points)
 on 8/10/12 at 9:11am

Bene qui latuit, bene vixit- Ovid

Bobb's picture

fuzzieWuzzie: My ED has been

AM
 
Points)
 on 8/10/12 at 9:17am
rls's picture

Veni Vidi Vici: How

HF
(Orangutan, 367
 
Points)
 on 8/10/12 at 9:17am

Bene qui latuit, bene vixit- Ovid

Bobb's picture

rls: Veni Vidi Vici: How

AM
 
Points)
 on 8/10/12 at 10:10am
Veni Vidi Vici's picture

I agree that Apple do

EN
(Monkey, 65
 
Points)
 on 8/10/12 at 10:56am

"It's a little like wrestling a gorilla. You don't quit when you're tired you quit when the gorilla is tired"
-Robert Strauss

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