One the biggest doubts confronting Apple is its ability to innovate like it has in the past with the iPod, the iPhone, and the iPad.
With Steve Jobs dead, and Scott Forstall out, two of its most important executives of the last six years are no longer there. The new executive team led by CEO Tim Cook has to prove to the world that it can build the next wave of world-changing devices.
At today’s Goldman Sachs conference, Cook was asked about Apple’s culture of innovation. His interviewer, Bill Shope, was trying to get Cook to respond to anyone that thinks Apple can’t create the next big thing.
Cook, obviously, didn’t tip his hand and say, “Well, Bill, next month we have a Retina iPad Mini, then a new iPhone, then in the fall an iWatch, and come December we’ll introduce an Apple TV.”
However, he did a good job of explaining why Apple is still the technology industry’s leader, and why rivals like Samsung, Amazon, Google, and Microsoft can not keep up with Apple, in his opinion.
He attributed it to Apple’s “skills,” and “leadership.”
Leadership is pretty simple: Cook thinks the executives at Apple are the best in the world, and therefore they are in a position to produce the world’s best products.
As for the other part, “Apple is in a fairly unique and, in my view, unrivalled position because Apple has skills in software, in hardware, and in services,” says Cook. Other companies have skills in one or two of those things, but not all three.
He didn’t name names, but we will. Google is great at software and services, but not at hardware. Microsoft is in the same boat. Samsung is great at hardware, but not software or services. Amazon is good at services, but not software or hardware.
“The reality is that the model that grew PC industry, where someone specialised in some thing, that model is not working for what consumers want today,” said Cook.
The model that made Microsoft rich was for it to build software, then hand the software to hardware makers, who would then try to build something customers want. Today, argues Cook, this doesn’t make sense. You need one company with one vision for the consumer to work on one product.
It’s self-serving because this is Apple’s model. But, Microsoft, Google, and Amazon are all following Apple’s lead. Microsoft’s Surface tablet is built by Microsoft. Google’s Nexus 4 is designed from scratch by Google. It also owns Motorola to purse an integrated strategy. Amazon uses Android, but forks it to do its own thing so that it has complete control from top to bottom. Samsung has been talking about improving its software and services.
While many people are worried that these companies are going to catch Apple, Cook says that they’re new to the all-in-one game, and Apple has been doing this for decades now. You can’t just flip a switch overnight and have the same deep industry expertise of Apple.
Cook says its Apple’s strength in these three areas — hardware, software, and services — that allowed it to build the iPad.
Imagine if it had been great at software, but not hardware? Look at the Motorola Xoom, the first iPad-killer. It was flop because it was two companies trying to work on one product.
Imagine if Apple had good iOS software, good hardware, but weak services to tie it all together. Without the App Store, iTunes, and other services, the iPad wouldn’t be as successful.
Later in the interview, Cook also mentioned Apple’s stores as an important piece of the iPad’s success. Before Apple released the iPad, most tablets were heavy turds with poor user interfaces, so they might not have bought one. Because Apple had its stores, consumers could walk in and see what the iPad was all about. They could see that it’s relatively light and easy to use.
All of this is a long, allegorical way for Cook to answer anyone that doubts Apple’s ability to innovate.
He’s saying that Apple has the systems in place, coupled with the right people, to discover and produce the next innovative, world changing product. It did it with the iPad, and though Steve Jobs is no longer around, all the pieces are in place for it to do it again with whatever might be next.
It’s a pretty good response to an impossible question. Of course, we’re going to have to wait for Cook to prove that Apple can make the next iPad, whatever it might be.
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