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Newtonian Apple

The most interesting thing about the iPhone 5 launch is not how little it's perceived to have changed over the prior generation, but why.

Roughly speaking, the iPhone accounts for around $60Bn of Apple's annual revenue, and that $60Bn is pretty cyclical in respect of the fact diehards upgrade every year and no-so-diehards every other year. Which means a huge chunk of that $60Bn is derived from existing customers and, more precisely, existing customers who know what they like. And they really like their iPhones.

So, you'd need brass balls to gamble $60Bn a year by making major deviations to a recipe that works. Which is a not insignificant problem for Apple.

We usually associate a lack of innovation with organisations that are in either decline or distress, or both, but the iPhone 5 is a great example of how creating the world's most successful product can lead to a situation where you need to deliberately retard innovation.

Which is actually a fascinating notion in the sense of Newton's third Law of Motion; where every action results in an equal and opposite reaction.

Reader Comments (1)

its all about evolution, rather than revolution. Apple has control over its hardware. As Xero has discovered, suddenly Android isn't one platform. Apple is always going to have a competative advantage as it just works. Samsung via Android has been taking market share, but at the end of the day Androids advantage is also its disadvantage. There is a great quality assurance programme happening at apple and for developers this costs about 30%. On Android there is no Quality assurance, no costs. However the same app available for both devices tends to have less innovation on the Android app.

September 29, 2012 | Unregistered CommenterKieron
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