Innovation and Technology Management in Apple Inc - Essay Example

Executive Summary Apple is known for its innovation strategies ever since the days when its legendary CEO Steve Jobs took the reign of the company in his hands in his second inning. His contribution to the Apple and mankind in terms of developing some of the most revolutionary products such as iMac, iPod, iTunes, iPad, iPhone, is stupendous. Technology products from Apple have changed the lives of people significantly. Whatever Apple designs, develops and offers in the market place, it provides unparalleled ‘user experience’ to its consumers. Future trends such as Big Data, Smart Connectivity and User Experience are likely to impact most technology companies in the world. Apple is fully geared to take advantage of these developments. While making radical product innovations, Apple takes pain in quickly updating and adding incremental changes while taking feedback from the customers. At Apple, ‘Time is Essence’ while developing and launching new products in quick succession. Innovative culture has percolated downwards extensively in Apple's all processes and activities. Apple takes extreme precautions in creating patents for its technology products to prevent competition taking undue advantage. Apple is equally conscious in developing its human capital. ‘Apple University’ is the brain child of Steve Jobs to continue with the same spirit of innovations in future that Apple is known for. Apple has been consistently scoring the top place on the American Consumer Satisfaction index (ACSI) for the last several years among all technology companies; the brand Apple has become synonymous to innovative ideas, designs and products. Company Selected: Apple Inc. Introduction Apple Inc. is US based consumers electronics company with headquarter in Cupertino, California. The company designs manufactures and sells software and hardware products such as iMac, iPod, iPhone, iPad, iTunes. Apple notched worldwide sales of $182 billion in the year ended October 30, 2014. By market capitalization (shareholders' worth), Apple occupies top place among technology companies for the last several years. Apple employs over 72000 full-time employees worldwide and operates over 425 retail stores across the world. The company is known for its innovation in design, and product development creating one of the most satisfying user experiences. Mission Statement Steve Jobs’ mission statement for Apple in 1980 was: “To make a contribution to the world by making tools for the mind that advance humankind” (The Economist, 2009). The above mission statement from Steve Jobs was created when the company was at its early phase and when great many products had not taken any shape. However, in later years, Steve Jobs proved what he meant. By any measures, Apple's contribution to the advancement of human being is immense as now is evident from the whole array of technology products such as iMac, iPod, iTunes, iPad, iPhone, iOS App Store. Objectives Jonathan Ive, senior vice president at Apple, rightly says, "Money isn't Apple's main goal" (Kaiser, 2012). Their goal is to make great products that people can really appreciate and like them; money will follow when organisation is operationally competent. There is no doubt that the company has been able to provide not only the superior design of products but also innovative products that made it one of the top companies of the world in terms of market capitalization. Product Portfolio Halliday (2011) reports 10 top products from the Apple Inc in the last over three decades. Apple II The Apple II was launched in 1977. It was the first real packed computer as described by Steve then. The product fetched almost $79m in revenue in 1979. The First Macintosh The Macintosh 128K as it was known then came into market in 1984. Its launching was done with a lot of fanfare putting the company into a big league. The iMac It was the second inning of Steve Jobs in the Apple when he gave the idea of the iMac, a revolutionary computer system that had no floppy drive but it metamorphosed the company completely since then. The iPod With the launch of the iPod in 2001, the Apple transformed itself to the manufacturer of the state-of-the-art electronic gadgets destined to revolutionise the music world. It was a trendy MP3 player that could deliver music at a stretch for 10 hours without any need to charge battery. One could easily store around 1000 songs of average length in iPod. The iPod Nano In an effort to reduce its size, Steve introduced the iPod Nano in 2005 discontinuing earlier version. Its penchant for superior design and compactness was quite visible in this product that was further modified in 2010. The last version was lighter by 15 gram and height just one-half than the previous version. The iPhone One of the most exciting product launched in 2007 and it became an instant hit across the world. Each year, its design after the launch kept on improving; it is still selling like hot cakes. iTunes iTunes made people to pay for songs online integrating internet radio, MP3 playback and CD writing. With this also Apple's cloud technology had a humble beginning as it allowed people to download digital music through their devices. The iPad A tablet computer launched in 2010 had its own market who wants computer experience with easy portability experience. iOS App Store Launched in 2008, the App Store invigorated iPhone market. Also, the smart phone market expansion has been accelerating the App Store development with huge possibility of software development. Apple Stores With the opening of first store in 2001, it has now expanded to over 350 stores across the world. It was Steve’s vision to go for such stores to capture the imagination of consumers. International Trends and Developments Park (2014) argues that three major future trends likely to impact all companies are Big Data, Smart Connectivity and User experience. He points out that mobile computing business has surpassed laptop and desktop computer business taken together. Robust mobile networking is changing the world at rapid pace opening up new vistas for advanced technologies making inroads in the lives of all. So much of the data is being generated every minute that the Big Data will be central to all activities taking advantage of smart connectivity. User experience is crucial with new product offerings in the market for its acceptance or rejection. This includes user's expectations including ease, friendliness and other intangible elements such as emotions. Even human psychology including socio-cultural factors will play its role in accepting or discarding the products. Identifying technological trends at an early stage is crucial to the success of company. Exploitation of new technologies, at right juncture, makes product innovation meaningful. However, difficulties arise due to fast pace of technological changes, especially in computing and informational technology field in which the Apple is operating. With this perspective, it becomes essential to not only identify technology-related opportunities but also manage them to harness to company's advantage within available resources. Moreover, it is crucial to align emerging technologies with the market expectations so that product innovation becomes a revenue fetching endeavour for the company (Warschat, 2014). In the current times, differentiating between radical and incremental innovation is essential. Radical innovation helps carve a discerning niche for the company in the industry. It provides a definite competitive edge over rivals. However, radical innovation requires an approach supported by visionary leadership style that evaluates market needs much in advance. Apple Inc. is known for undertaking radical innovation to create products that are never seen before. In fact, rival companies keep a close watch on Apple's innovative product strategies to quickly create their own but similar versions (McDermott & O'Connor, 2002). It has been found that companies who organise technology development capabilities in a systematic and organised manner are poised to get success in their innovative efforts leading to competitive edge over their rivals. Key areas that require focus are: formulating innovation and technology strategies and implementing them in time, enhancing firm's capacity for innovation by effective research and development activities, keep on identifying and evaluating new technologies to exploit them for own advantage, establishing technology and innovative networks, emphasizing on creating intellectual property and gaining patent rights, and aligning innovation with company objectives (Warschat, 2014). Technology-based organisations are always on their toe to innovate in the shorter time frame due to rapid advances in science and rapid obsolescence in technologies adopted. Apple has been in forefront in identifying and employing right technologies while creating new products within the stipulated time frame. Creating and launching products within the set time frame is Apple’s forte; it can be gauged from the fact that Apple developed iPod in eight months straight – right from inception to launch (Fisher, 2010). It would be appropriate to understand Apple's approach to creating revolutionary products that compel others to follow the suit. Apple's innovation efforts were not limited to developing robust computing hardware but it was the crash-proof operating system Mac OS X that established the company in a totally different league of producers and inventors. Mac OS X is recognised for its speed, stability and user friendly experience that its user would always love to patronize over Window-based PCs (Time, 2014). Apple's fascination for innovation has taken cultural roots meaning an innovation system is in place to generate new thinking and ideas, harness creativity in the people, and undertake the radical designing process to give birth to entirely a new class of products. It can be said that Apple's approach to innovation is multidirectional. The company does not merely focus on product innovation but the thrust is made to look at the things holistically while product is under development. Apple has created new market niches through its unique product offerings to surprise its competition. For example, the iPod's success is not attributed to its design, software or looks alone, but it was the ‘ease of use’ that made it possible for the user to access, upload or download the music. To enhance the impact of iPod in the market, Apple came with iTunes and then iPod became a big success. Since its launch, over 350million iPods have been bought by the customers on this planet and it is not a small feat by any standard. Not only that, but the Apple also sold over 50 million songs through iTunes legally in the very first year by charging merely 99 cents per song. This was an extraordinary beginning for iTunes and it was the most pleasant experience for discerning music lovers to have a large digital music collection permanently in their iPods at affordable costs (Time, 2014). Similarly, iPhone became a rage when it was sold through its numerous App Store across the world. The iPhone was launched on June 29, 2007 and by September 30 of the year, it had already sold 1.4 million pieces winning "Time's Invention of the year" (Time, 2014) tag. When iPad was launched in January 2010, many touted it as a giant iPhone. Many of the Apple rivals offered tablets but none could match iPad in style, looks and user experience. The iPad also became an instant success selling 84 million pieces in just two years. Contrary to the traditional approach, the Apple hired great innovators on key issues rather than depending on in-house skill development to make innovative products (Fischer, 2010). According to Fischer (2010), innovation is not a one time job but an ongoing process. Even well-designed new product does have a scope of continuous incremental innovation over time to add new features or make it more user-friendly and affordable. Some times in the history, Digital Equipment and Polaroid were known for its success due to its innovativeness; however, later on they could not keep pace with innovative ideas and lost in oblivion for good. This also implies that organisation must continue to work on an array of innovative projects to sustain its growth and maintain its leadership positions. O'Connor and Rice (2013) argue that breakthrough innovation (BI), based on new technological development, is quite challenging; its commercialization leading to full-fledged market development could be even more herculean task. Researchers also argue, "It requires as much time and investment as their technical development" (O'Connor & Rice, 2013). The company needs to acquire "BI commercialization competency… developing appropriate performance metrics for those responsible for market creation” (O'Connor & Rice, 2013). In all these respects, Apple has not only been able to make numerous technological breakthroughs but has emerged victorious in exploiting them commercially and maintaining leadership positions in most of its products lines. Technological Capital Apple is in the business of computing, mobile phoning and related fields where technological advancement is quite frequent. Survival of the company in this field will largely depend upon how it protects its technology – its intellectual property that it creates through research and development. By end 2012, the Korean giant Samsung, Apple's major rival in mobile phoning business has 47,855 US patents, the highest among all technology companies. Against this, Apple has 4,649 US patents to its name (Statista, 2013). While most companies have become extremely cautious in filing their new designs, discoveries with patent authorities regularly, a lot depends how courts interpret the technological evolution based on prior arts in the event of any dispute for those property rights. Nevertheless, the patent filing is essential to prevent rivals using them for their own benefits. The patent applications by Apple include even servicing solutions such as iPay, iBuy and iCoupons that will boost mobile commerce, mobile payments and mobile marketing business. In short, all new designs, discoveries and technological findings must get registered with patent office for protection of intellectual property rights and maintaining competitive edge over rivals. Human Capital Human capital can never be owned but retained and developed for the organisational benefit. After all, all creativeness and innovation foster through the people that organisations groom for their own success. Though most companies support and develop their staff through training programs but none can match Steve Job's visionary thinking that aims at developing Apple's human capital. He went much beyond traditional training programs that are usually seen in the corporate world. Steve Jobs mooted the idea of ‘Apple University’ – the program that teaches executives to think like Jobs. It is to continue with exemplary innovative methods and ways that he fostered during his life time. Guynn (2011) reports in Los Angeles Times, "Steve was looking to his legacy. The idea was to take what is unique about Apple and create a forum that can impart that DNA to future generations of Apple employees" (Guynn, 2011). In the process of developing Apple University, Steve aimed at ensuring that innovation at Apple becomes a permanent affair and the level of creativity never tapers off. He involved Richard Tedflow of Harvard University to develop a kind of educational material that could help Apple executives to take decisions in a way Steve used to take. Assessing the Importance of Innovation at Apple Innovation has always remained the major factor in Apple's success in last over one decade and the company relies heavily on innovative ways and means to spearheading future growth. The Boston Consulting Group (BCG) has ranked Apple Inc as the most innovative companies of the world in 2014 (Wagner et al, 2014). In fact, the BCG has been declaring Apple as the top innovative company since 2005. Apple's design philosophy is expressed in the following words in Apple's Worldwide Developer's Conference that happened in June last year: “We simplify, we perfect, we start over, until everything we touch enhances each life it touches. Only then do we sign our work: Designed by Apple in California" (Thompson, 2013). The above expressions from Apple go very well with its overall philosophy to develop something so unique that people become crazy and ready to buy it waiting in queue. Apple lays significant emphasis on innovation and aims at creating quality products through several techniques. Kaizen for Total Product Experience Morton (2009) employs Kaizen at Apple to achieve "continuous improvement of the total product experience". He uses ‘Tableau’ to identify product defects by "exploring the number of reported incidents per product each week" (Morton, 2009). His 10-step Kaizen analysis include discovery, statistical validation, correlation, financial valuation, review results of discovery, engineering evaluation, business explanation, process improvement, engineering re-evaluation, and verification (Morton, 2009). As per Bruce Tognazzini of Nielsen Norman Group, Apple has often produced revolutionary products and then rivals follow it. In future also, Apple will keep on producing novelties in regular intervals (Thompson, 2013). Quality Circles Russell and Taylor (2009) argue that employee contribution in quality improvement is immense. While skill improvement and training in quality tools help "employees to diagnose and correct day-to-day problems related to their job" (Russel &Taylor, 2009 p.67), Quality Circles and Process Improvement Teams play a vital role to providing product and process improvement. Apple’s achievements on quality of its products are quite evident through customer satisfaction. The American Customer Satisfaction Index (ACSI) aims at measuring customer satisfaction on the company products through various parameters such as visual appeal, processor speed, graphics and sound quality, design, ease of operation, performance in terms of crashes; the Apple has been scoring consistently the top place meaning ‘highest satisfaction’ in the list of several personal computer manufacturers for over a decade (Slashgear, 2013). Apple – An Established Benchmark in PC and Mobile Industry Apple itself has become an industry benchmark across the electronics industry. Across the world, people recognize brand Apple as one of the most authentic and innovative products manufacturing company with the most cherished ‘user experience’. In continuation to its glorious past, Apple is soon going to launch ‘the Apple watch’; it is not simply a watch but likely to be a comprehensive health and fitness interface (Archimedes, 2014). Whatever the Apple aims at developing and offering to discerning consumers is always found to be so unique that people always cherish those products. Apple is putting up considerable efforts to replace credit card system altogether. They consider magnetic strips on credit cards vulnerable and aims at replacing this outdated technology. To take care of payment issues, they have come up with a novelty called Apple Pay. It is a mobile payment service that will allow users to make payments using iPhone 6, 6 Plus, or Apple Watch. Using near-field communication (NFC) technology along with the finger print scanner on the phones, users will be able to make payment (Archimedes, 2014). Apple has become an epicenter of new designs, devices and products in the technology field whose sole aim is to enhance people’s experiences. It is a company that inks new rules, changes the market, and does that all with flair and style. 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