The Apple approach to innovation

Vox has an article talking about the release yesterday of the Touch Bar for Apple MacBook Pro laptops. It's a significant advance. They explain why it succeeded for Apple despite the fact that this particular innovation had been tried before by other manufacturers but failed.

Apple controls its products tightly. This approach allows it to approach innovation very differently:

In contrast, Apple controls the entire “stack” for its products. It manufactures the hardware, writes a lot of the software, and even makes some of its own chips. This makes it hard to achieve a large market share, since it’s difficult for one company to serve a lot of different kinds of customers. But the example of the Touch Bar shows that the Apple approach still has some distinct advantages.

It’s hard to imagine anyone other than Apple successfully pulling off an ambitious innovation like the Touch Bar because it requires simultaneous investments on both the hardware and software sides of the business.

Apple’s ability to make dramatic changes to its platforms has been an important source of strength for the company. And it’s a big reason that two of Apple’s chief competitors — Google and Microsoft — have increasingly aped Apple’s business model in recent years.

Here is more on why Apple can lead far more successfully than its competitors despite having much less market share:

A feature like Touch Bar or Adaptive Keyboard is only going to succeed if it becomes a platform-wide standard. And on a decentralized platform like Windows, that creates a chicken-and-egg problem: Applications developers are only going to put in the effort to support it if it’s available on a lot of laptops. But laptop makers are only going to offer it if there’s a lot of application support.

This is a particularly severe problem in the Windows PC world precisely because the PC market is so competitive. The hardware for the Touch Bar is apparently expensive — Apple is charging $300 extra for the cheapest MacBook Pro with a Touch Bar compared with the entry-level MacBook Pro without it.

So if a PC maker added a Touch Bar to its laptops, it would be taking a big risk of getting undercut by competitors that skipped the Touch Bar and charged significantly less. This is probably one reason Lenovo’s adaptive keyboard was so much less impressive than the Touch Bar — the Chinese company couldn’t spend a lot on the feature and risk being priced out of the market.

Apple can guarantee that a significant percentage of their products will contain the new innovation. This allows the software makers to design products with the confidence that there will be a ready market for their work once the new innovation is finally released.

This model has been so successful for Apple that Microsoft and Google are now openly copying it. They have both ventured into producing their own hardware (Surface, Chromebooks, and the Pixel). All of this will likely lead to even more innovation in the years to come.

Here is a link to the original article:  http://www.vox.com/new-money/2016/10/27/13441068/touch-bar-apple-google