Coursework

Group Report- I nnovation at Apple

I nnovator





Submitted To : Ms. Aparna Kaushik
Submitted by: Prateek Gautam
Richa Suri
Rupali Sahni
Saumya Awasthi
Siddharth J ha
Taruna Nirankari
INTRODUCTION
Apple was founded by Steve Jobs, Stephen Gary Wozniak (Wozniak), and Ronald Gerald
Wayne on April 1, 1976. Working at Jobs's garage they designed a personal computer (PC) that
was sold as Apple I. The company was incorporated as Apple Computer, Inc. on January 3,
1977. Thereafter, the company grew by introducing many innovative and commercially
successful products such as Apple II (1977) and Apple III (1980). Right from its inception,
Apple had been a company committed to building great products using the latest technologies.
The strong R&D focus that Jobs and Wozniak insisted on helped Apple to differentiate itself
from its competitors.
APPLES APPROACH TO INNOVATION
At Apple, innovation is a way of life and a part of its corporate DNA.
Apple's success is attributed to its ability to develop innovative products. Over the years, the
company launched some great products in the market which became the benchmark for customer
experience. For five consecutive years (2006-2011), Apple was ranked number one on the
worlds most innovative companies list compiled by Business Week. Since its inception, Apple
had focused on innovation and had ventured into those markets where it could make a significant
contribution.
APPLE ITS COMPETITORS
When it comes to smart phones, perhaps Samsung is its biggest competitor. Apple may not have
any close competitors in the tablet market, but perhaps Amazon or Microsoft qualify as potential
threats to the iPads dominance.
Google might be considered an Apple competitor on multiple fronts. Google-owned subsidiary
Motorola recently unveiled the Android-powered Moto X smartphone, which could be a possible
competitor to Apples iPhone. Google also offers the Google Drive cloud service, which could
be considered a competitor to Apples iCloud. While Apple is still rumored to be developing its
own wearable tech product, Google has already ventured into this growing market with its
Google Glass product.
Google and Apple may seem to share similar innovation patterns from afar, but under the hood,
they play totally different ball games. This way, they demonstrate their ability to build their own
identity based on a genuinely personal innovation model.


FORBES MOST INNOVATIVE COMPANIES LIST
Apple has been facing innovation problems since the death of Steve Jobs, the mastermind behind
the innovative culture of Apple. Apple's innovation problems were highlighted when
Forbes published its 2013 list of the world's most innovative companies and ranked Apple at No.
79.
Apple's plummet has been dramatic. In 2011, the first year Forbes issued its Most Innovative
Companies list, which ranks 100 firms, Apple earned the No. 5 spot. In 2012, the company
dropped 21 positions to No. 26. But the 53-place plunge in 2013 was the biggest decline yet.
Reason for the drop in Innovation Rank on the Forbes List
Forbes uses a complex algorithm to rank companies by what it calls an "innovation premium,"
which is the difference between market capitalization and a net present value of cash flows from
existing businesses. The innovation premium also takes into account anticipated growth from the
existing businesses within a company.
The innovation premium can be seen as the investor expectations built into the stock price.
Apple's ranking dropped because of what happened to the stock price in 2012. Its ranking is a
proxy of what investors think of the future of the company. Innovation Premium is a measure of
how much investor have bid up the stock price of a company above the value of its existing
business based on expectations of future innovative results
APPLES CULTURE

Apples culture is as distinct as its products are groundbreaking. Thats no accident; one leads to
the other. Its evident in every aspect of the company, every interaction with every employee
from executive management to the salespeople in its renowned Apple stores.
It all emanates from founder Steve Jobs, but the companys Think Different mindset isnt just a
tag line; it captures and reinforces the companys unique cult-like culture, the way it operates
from top to bottom.
Concepts like conventional wisdom and status quo dont exist at Apple headquarters in
Cupertino. From the beginning, employees learn the Apple way: Think Different. Its not written
anywhere and there are few processes to follow, but they learn it, just the same. And it works,
big time.









INNOVATION AT APPLE

Product Innovation:
Apple has built its success on its legendary Macintosh whose user interface offered a
revolutionary new way of using a computer. This product is backed up by a strategic innovation:
Apple has managed a paradox: it has widened its portfolio from PC to entertainment devices, and
it has kept at the same time a strong innovation focus, concentrating on a small number of
products: iMac, iPod, iPhone, and now iPad. Together, these products form a family and have
been designed within a very strong ecosystem: the range of accessories continues to grow and is
now being promoted in the Apple Stores. The most extensive ecosystem is in the software: it is
the one that embraces the iPod personal music player, the iPhone ; the iPad, and goes right
through to the iTunes music and video download service, and has helped Apple develop into a
content provider. It has been extended with the App store, a store of thousands of applications
which run on iPhone and iPad.

Apple became the leading technology company in the world by creating cutting edge products.
The company constantly innovated with its business model to respond to market needs and
challenges and to deliver quality products and services. The technology behemoth combined new
technology with simplicity to come out with cool and simple products.
Jobs said that people who buy Apple products are not "consumers." They are people with hopes,
dreams and ambitions. He builds products to help people achieve their dreams. He once said,
"some people think you've got to be crazy to buy a Mac, but in that craziness we see genius."

Process innovation:
Apple constructs complete, self-contained ecosystems around its products. The software is an
integral part of the hardware and any divorce between the software and the appearance of the
terminal could harm the brand. Apple retains control of the system and the customer is simply a
user of the product: consequently, a Windows PC is more open than a Macintosh; a fact which
has caused some users to unlock, or jailbreak, their iPhones in order to install applications
outside of the Apple system. However, with the iPhone, Apple is nevertheless opening up to
developers for the first time by allowing them to create mass-market applications which Apple
then validates and publishes in the App Store where users can download them to their iPhones at
their own expense. Another characteristic of the Apple innovation process lies in the
secrecy which surrounds the design of new products. The companys executives are extremely
disciplined concerning its strategy of silence, certain rooms are protected from the eyes of
inquisitive employees by secure access mechanisms and projects are designated by code names.
Apple has secured a competitive advantage for its tablet and iPhone 4 in terms of performance,
energy efficiency and production costs.


Design Thinking:

Apples hallmark is its design. Its products have always been carefully designed and easy to use.
Very early on, Steve Jobs said that computers were only slowly finding a place in the home
because they were horrible grey machines designed by engineers with no taste. With him, the
concepts of beauty and ease of us penetrated the IT world: What Apple is great at is figuring out
how to invent cool technology and making it wonderfully easy to use. Nothing is left to chance,
from the shape of the products through to the cable that powers them. The designer Jonathan Ive,
who once designed bathrooms, imposes his ideas on the engineers and through him, the iPod and
iMac products were to mark a turning point; they were no longer merely user friendly, they
were friendly pure and simple: beyond their functionality, they reflected a
prestigious status which gave pleasure to the user, they created an emotional relationship.

Business Model:

The Apple business model is the classic model of a manufacturer marketing its own terminals
and accessories. This has recently been enriched by the online iTunes service, the applications
available in the App Store (revenue shared with the application developers) and the Apple Store
distribution network (reintegration of distributor margins), with Apple extending its control over
the industry network.
Apple created many stylish innovative products that propelled the company to the top of its
industry. But the shift was not only a matter of product innovation. Innovation lies also in
Apples innovative business models new ways to create, deliver, and capture value.
For instance, the iPod and iPhone would not have had nearly as much impact if they hadn't been
matched with iTunes and the App Store respectively. Systemic innovation integration is at the
heart of Apples success. Apple works across traditional industry boundaries to create a
successful innovation-friendly ecosystem. The companies are in hardware, in software, in
entertainment, and in logistics, and have mastered parts of all those industries.
The App Store, for instance, the worlds largest collection of mobile applications, offers
hundreds of thousands ways to make iPhone even better. iTunes, innovative software with a
powerful business, shows that people would pay for music if the price is right and the interface is
simple enough.
Apples innovative value proposition The product as an experience stimulated great ideas
when company leaders were contemplating a new business model. For instance, Apple pioneered
into a new business space and defined a workable business model for downloading music.
Another key driver of Apples financial success is growing adoption of Apple products for
business use. Saving time and minimizing frustration are the essence of Apples brand promise.
This value proposition converts PC and Blackberry users to the Apple brand. Apple's innovation
strategy also involves great in-store service.

Innovative Marketing and Customer Focus:
Steve Jobs was the world's greatest corporate storyteller, turning product launches into an art
form. You can have the most innovative idea in the world, but if you can't get people excited
about it, it doesn't matter. For every idea that turns into a successful innovation, there are
thousands of ideas that never gain traction because the people behind those ideas failed to tell a
compelling story.
All the Apple product launches are hyped about for a long period of time before the launch of the
product. The need for the product is created in the minds of the consumers before the product is
launched.
Jobs made the Apple stores the gold standard in customer service. The Apple store has become
the world's best retailer by introducing simple innovations any business can adopt to create
deeper, more emotional connections with their customers. For example, there are no cashiers in
an Apple store. There are experts, consultants, even geniuses, but no cashiers. Why? Because
Apple is not in the business of moving boxes; they are in the business of enriching lives.



















PEOPLE AT APPLE : THE INNOVATORS

Steve Jobs is the incarnation of the Apple philosophy. Beyond his design and brand philosophy,
Steve Jobs, who is nicknamed the Apple guru, gave the impression of someone with a mission
to accomplish, teaching to lavish. He was the one who stood infront of the consumers and
presented each of the product of Apple as a thing of beauty that must be owned. Steve Jobs dared
to dream and inspired the people at apple to dream big and to fulfill their dreams with an
aggressive outlook towards the work they did.
The Apple Industrial Design Group (IDg) is the industrial design arm of Apple
Inc. responsible for crafting the appearance of all Apple products, including the Apple Macintosh
computer line. Apple industrial design was established in April 1977 when Steve Jobs hired Jerry
Manock to design the enduring Apple II case. Jobs was notoriously obsessed with design and
style, rumored to linger over appliances at Macy's for inspiration and together with Manock set
about establishing the design language that would be used by Apple for the next 10 years. Steve
Jobs' return in 1997 ushered in a new era for Apple design, and the appointment of
designer Jonathan Ive, drawing on the curvy style developed over the preceding 7 years and
infusing it with vibrant color and translucent details. Several members of this group, including
Stringer, were referred to over the course of the trial for their role in designing early prototypes
of the iPhone and iPad. Many others were mentioned repeatedly in court documents thanks to the
patents they hold on Apple products. As Stringer noted, there is a fairly consistent group of about
16 Apple employees whose names consistently appear on the major Apple patents of recent
years.

Christopher Stringer, a longtime member of Apple's industrial design team, had one of the
most memorable moments of the ongoing patent trial when he revealed that most Apple products
are initially designed by a small group of just 15 or 16 employees sitting around a kitchen table.
Jonathan Ive is the head of the industrial design team and serves as the face of Apple's design
efforts. He has overseen the design of Apple's popular i-devices, including the iMac, iPhone and
iPad. Ive was particularly close to Apple's former CEO Steve Jobs and he is seen by many as the
one most responsible for carrying on Jobs' vision for consumer products.
Shin Nishibori ended up at the center of the patent trial early on for creating a series of Sony-
inspired designs for the iPhone back in 2006. Samsung wanted to call Nishibori to testify in the
trial, but he revealed that he had just stepped down from the design team due to health issues.
Nishibori's LinkedIn page shows that the designer worked at Apple for a decade until he left last
month.

Julian Hoenig is a relatively recent addition to the design team. He joined Apple in 2010 after
having spent most of his career working as an exterior designer for car companies, including
Lamborghini and Audi, according to a resume on his personal website.
Daniel Coster's name appears alongside Steve Jobs, Jony Ive and others from this elite group on
a wide range of patents, including the iPhone 4's stainless steel design, as the well as the phone's
user interface design and the wireless keyboard that is used with the iPad.







FAILURE STORY
Apples Lisa, released in 1983 at a price just under $10,000, was the first personal computer to
offer a graphical user interface in what was an inexpensive machine at the time aimed at
individual business users. But Lisa did not take off and became the largest commercial failure for
the company since the Apple III of 1980. The machines just could not compete with less
expensive IBM PCs, which were already beginning to dominate business desktop computing.
In 1985 the board voted Steve Jobs off the board of the company because he was considered an
aesthete who only wanted to make beautiful products.
During the time that Steve Jobs was not a part of Apple, the company launched a series of
products including a usb mouse, a gaming console, a portable computer.
In 1997, Steve Jobs was hired back in the company as the management felt that the company
needed a zealot who would take the company ahead of its competitors. During this period, he
was considered the aesthete who would make beautiful products that make money.
CHALLENGES
The biggest challenge Apple is facing since the death of its founder Steve Jobs is maintaining the
innovation streak that Jobs had created and carried on for years. Since rejoining Apple Jobs gave
the world the most innovative products iPod, iPhone, iPad, iTunes.
Then the revolutionary innovation of Apple ended with Steve Jobs illness, then death, Apple
lost the key ingredient to its ascendency. In spite of the initial rumors that Jobs had left nine
earth-shaking creations that would be rolled out, nothing materialized not even the I finally
cracked it TV product that Steve announced, via his biography. If the company produces new
category busters, it is likely to be out-innovated by a smaller, more agile competitor.
BARRIERS TO INNOVATION
Apple always launches any new idea quite early and gives a date for the product launch in the fu-
ture, it starts it marketing activity early. So Apple has to be efficient to make the deadline, this
hinders any further innovative changes that could have been brought to the product as its focus
shifts on to production. Moreover under delivery pressure products are made costly, rather than
cost effective. Administrative pressure also increases as the products have to meet the launch
date, so they stop thinking about things differently. Under this daily pressure to stick to time
horizons and budgets, innovation leaves to be of prime importance until the goal is met. Apple
tries to make all its products look quite similar, this stops the creativity of the design innovation.
FUTURE OF APPLE
Its the race for future, and every technology giant wants to be the premier innovator. And when
it comes to Apple, you can bet they are up to creating something revolutionary like the iPod,
iPhone and the Mac. Here is a look at some unbelievable technological innovations that Apple is
working on.
1. Virtual Keyboard

Apple is working on a keyboard that will actually not exist. The virtual keyboard for iMacs and
MacBooks would allow us to use almost any flat surface as a keyboard. This would be made
possible by using a camera integrated into the iMac/MacBook. Using this keyboard, users will be
able to type while a real-time image of their exact finger placements will appear on the screen.
2. 3D iPhone

Anything related to an iPhone is always in news and if its about a 3D iPhone then its bound to
grab eyeballs. Apple's 3D user interface for iPhone (patent) will be using proximity sensors to
constantly display the correct depth and perspective, no matter what the device's orientation is.
The patent also talks about hovering hand gestures hinting touch-free gesture controlled iPhones
in the future.

3. An Electromagnetic Laptop-Tablet Hybrid

There is nothing actually new about a laptop-tablet hybrid. One from every major company is
available in the market. However, as expected, Apple tweaked the existing concept of the laptop-
tablet hybrid by using an electromagnet to help snap the screen into place, along with the ability
to wirelessly transfer power from the base to the tablet.
4. The iBike

Apple scored the patent for a smart bike or as the world would like to call it the iBike way back
in 2010. The bike will function in sync with the user's iPhone or iPod allowing users to get
feedback on their "speed, distance, time, altitude, elevation, incline, decline, heart rate, power,
derailleur setting, cadence, wind speed, path completed, expected future path, heart rate, power,
and pace.
5. Smart Touch Bezel/Body

Apple is so ambitious that it wants to take touch beyond the screen and on the bezel. Apple is
working on a super smart, predictive bezel that ignores unintentional touch, but is capable of
accepting inputs beyond the screen. Individual patches of touch-sensitive material could also be
turned on or off.
6. Shake To Print

If this comes true, Apple will add a whole another dimension to printing altogether. As opposed
to the traditional menu system printing, Apple is working on a system that will allow you to
merely shake your phone to send a print command. It will also enable the ability to easily print a
combination of documents, photos, and web pages, all from one menu.
7. A controllable, Transparent Display

Move aside curved screen, Apple is working on a transparent display. This Sci-fi patent details a
transparent display technology that will conceal a camera, strobe, and even the finger print
sensor beneath the transparent display. The display would turn transparent when needed, making
the camera or fingerprint sensor visible and accessible.









RECOMMENDATION

Apple should look at aggressive expansion into new, emerging markets around the
globe.
Implementation of effective products and price differentiation to attract emerging market.
Explore various retail channel to max sales and minimum risks.
Huge opportunity to build brand reputation


CONCLUSION
Innovation and opportunity are two very important factors. However, the success is more on the
executor level. Execution is vital. Jobs and Cook were able to do a great job in reaching the goals
of the company. The levelheadedness of Cook after Jobs brilliant leadership is one thing that has
sustained the success of Apple.
People want to try something new but there are times when they are unaware of what they really
want. The innovative strategy of Apple is the companys secret weapon to keep up with the
competition and remain on top of the industry. When it comes to hottest technologies like the
smartphone, no other company can beat Apple.
Until today, the company is continuously growing and meeting the diverse demands of
customers. Innovation is the key and with Apples team of brilliant minds, it will continue to
provide the market with the best gadgets. When innovation is done properly, success will surely
follow.
Many companies invest millions of dollars on research and development. With Apples
Innovation Factory, it is sure to come up with new ideas and trends that people from around the
globe will patronize.






REFERENCES

1. http://appleinsider.com/articles/13/02/12/cook-apples-culture-of-innovation-refuses-
to-recognize-limits
2. http://www.pcpro.co.uk/blogs/2014/03/13/why-apple-cant-be-insanely-great-after-
steve-jobs/
3. http://www.innovarsity.com/coach/bp_product_design_apple.html
4. http://www.innovationexcellence.com/blog/2011/06/02/google-versus-apple/
5. http://www.itworld.com/it-managementstrategy/192487/apples-greatest-triumphs-
and-worst-failures
6. http://entrepreneurs.about.com/od/becominganentrepreneur/a/How-To-Get-Your-
Inner-Steve-Jobs-Working.htm
7. http://appleinsider.com/articles/13/02/12/cook-apples-culture-of-innovation-refuses-
to-recognize-limits
8. http://money.cnn.com/2012/04/25/markets/thebuzz/