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Thursday, October 14, 2004

The Seeds Of Innovation In Apple

Businessweek carries an interview with Steve Jobs on Apple's innovation wherein he says,"among other practices, it's "saying no to 1,000 things" so as to concentrate on the "really important" creations", is critical to Apple's success.In an era when most technology outfits have tightened their belts to adapt to a slower-growing market, one company stands out for forging ahead on innovation: Apple Computer (AAPL ). Apple has not slashed R&D and focused on incremental advances to existing product lines unlike others in the industry. By combining technical knowhow with a new concept for how to sell music online, Apple's iPod music player has become the most influential new tech product in years. At the same time, Apple has maintained its reputation for making the most elegant, easy-to-use desktop computers as well. On the lean period in apple, steve says,"You need a very product-oriented culture, even in a technology company. Lots of companies have tons of great engineers and smart people. But ultimately, there needs to be some gravitational force that pulls it all together. Otherwise, you can get great pieces of technology all floating around the universe. But it doesn't add up to much". Steve's unique insight about the imperative to innovate inside a company,"Some very good product people invent some very good products, and the company achieves a monopoly.After that, the product people aren't the ones that drive the company forward anymore. It's the marketing guys or the ones who expand the business into new territories. Because what's the point of focusing on making the product even better when the only company you can take business from is yourself? So a different group of people start to move up. And who usually ends up running the show? The sales guy. He cites the example of John Akers at IBM (IBM )as the consummate example. Then one day, the monopoly expires for whatever reason. But by then the best product people have left, or they're no longer listened to. And so the company goes through this tumultuous time, and it either survives or it doesn't".

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