The Economist on Apple, the iPhone, and Innovation

portscan writes "This week's Economist has a special report on Apple, Inc. and innovation. 'The fourth lesson from Apple is to "fail wisely". The Macintosh was born from the wreckage of the Lisa, an earlier product that flopped; the iPhone is a response to the failure of Apple's original music phone, produced in conjunction with Motorola. Both times, Apple learned from its mistakes and tried again. Its recent computers have been based on technology developed at NeXT, a company Mr Jobs set up in the 1980s that appeared to have failed and was then acquired by Apple. The wider lesson is not to stigmatize failure but to tolerate it and learn from it: Europe's inability to create a rival to Silicon Valley owes much to its tougher bankruptcy laws.' There is also an article on the business of the iPhone and the future of the company. "

Another pre-emptive iPhone Hype Artcile

[chipotlehero]

The last thing that enjoyed this much hype was Snakes on A Plane. Remember how good that was when it actually came out? I predict iPhone will share the same fate, and shares of Apple will plummet!

Not mentioned in the article: Marketing

[powerpants]

Apple has cultivated its brand through sleek products and sexy advertising. The first major MP3 player (ignoring the obscure MPMan) was the Diamond Rio [wikipedia.org], which looked alright... until the iPod came out. Don't underestimate the importance of style when it comes to selling consumer electronics.

Fail wisely, OK

[Junior J. Junior III]

But let's not call iPhone a success yet. It had an exciting demo that got a lot of buzz. It hasn't sold a single unit yet. Expectations are sky high already, so if this one doesn't do as well for some reason -- or even if it just has a slow start for whatever reason -- the perception could be that it's a disappointment, under-performer, or outright failure. It's hard to imagine it being a complete failure, but at the price tag that they're commanding, it's not like you can guarantee its success.

Bias

[GWLlosa]

So when Apple bombs, its "Learning from Mistakes" and when they get the next version right, its "Insightful Market Understanding", but when Microsoft bombs, its "Rushing it out the door to crush competitors" and when they get the next version right, its "Stealing technology from their competitors". Everyone in business learns from their mistakes and improves their subsequent product, or fails to remain in business. Just look at the stability of the latest IIS vs the earlier ones, for example.

Like we say in software development...

[ringfinger]

..."Plan to through your first efforts away... because you will"

But really, there's wisdom there. You never really know what will be successful until you've gotten something out and developed. If only business people understood that, they could likely leverage it to do exactly what this article recommends -- "fail wisely".

Re:Apples the king at failing

[thermopile]

In addition to being the king at failing, this 'beleaguered' company has also been very good at trying. (We zealots prefer beleaguered to 'doomed.')

Witness, for example, KidSafe. QuicktimeTV. iCards. OpenDoc (for you old folks out there). All innovations that, for one reason or another, didn't take off.

TFA talks about network innovation -- and Apple certainly does its fair share of that. But they're also willing to try and are willing to accept a few failures here and there. Because of that risk-taking, they're able to quickly capitalize on things like the iPod, the iMac, and the iHateThisMeme. Kudos to them for having the cojones to do that; it seems like many other organizations are too risk-averse.

Motorola Phone Failure Was Intentional

[Bones3D_mac]

The iTunes-compatible motorola phones were always intended to fail from day one. They were severely crippled compared to most low-end MP3 players at the time. The only purpose these phones served was to see if there was a market for phones with iPod-like integration, but only with features so excessively limited that Apple could crush it at any time by entering the phone manufacturing business themselves.

Comparing the Motorola phones to the Lisa probably has every Lisa in the world rolling over in their mass-grave.

Buy Palm?

[bill_mcgonigle]

I wonder what their response will be to the failure that will be hitching their reigns to Cingular for 5 years.

Did anybody notice ex-Apple VP of iPod Jon Rubenstein is now Chief XYZ at Palm? Does the investment firm that took the Palm stake have any other Apple ties?

I mean, if Apple acquired Palm, and Palm already has deals in place with Verizon, Sprint, NexTel, et. al., well, Apple couldn't very well not honor those commitments. And Palm just happens to be re-tooling their XScale phone to run on a small Unix OS (Linux). So, it wouldn't very well make sense to develop two completely different yet entirely similar products, would it?

But, hey, I've been known to claim the 3GHz promise was just a strawman to excuse sacking IBM. Steve learned from his NeXTMachine failure that a software company is better off using cheap commodity hardware.

Re:Like we say in software development...

[Timesprout]

You never really know what will be successful until you've gotten something out and developed. If only business people understood that

Business people underatand this perfectly well. They also understand the costs associcated with getting to this stage and believe it or not they are clued up enough to understand that if they commit to this cost to just 'get something out there' and it fails then its probably game over for the business.

This is not something Apple are just chucking out into the market place, large amounts of reseach, market analysis and product developement will have been done before the iPhone got green lighted. There is still an element of risk the iPhone will tank but Apple will have done as much as they can to reduce it.

Re:Fail wisely, OK

[timeOday]

Not only that, but I don't believe the iPhone is a response to the failure of the Rokkr (as claimed by the summary). I doubt Apple invested much in the Rokkr (since there was nothing special about it), rather Apple simply licenced some trademarks to Motorolla - i.e. Apple using Motorolla as an ATM.

On the other hand, the Newton was a pretty innovative failure, from which lessons were doubtless learned.

Re:Apples the king at failing

[Pojut]

That is why Microsoft is smarter than Apple. They can piss off their customers and STILL be installed on ~90% of the PC's in the world. I see plenty of programs floating around that allow you to run Windows software on OSX. Don't really see too much in terms of using OSX programs on Windows... Just saying.... Personally I wish I was badass enough to write my own OS...as it stands, I'm a PC Gamer and as such I use windows. Frankly, I would likely use windows anyways. I mean, it IS awefully easy to pirate...

Re:Not mentioned in the article: Marketing

[Stormwatch]

It's not just the looks... the first iPod came in '01 with a 5GB drive, and that is still acceptable now. The Rio PMP300 had 32MB capacity, and a later model had 64MB. Sure, that was back in '98, you could say it was a pioneer, whatever, but that was pretty much worthless even back then!

iPhone Gremlins

[DECS]

It's funny how the meme that Motorola's crappy ROKR was somehow Apple's design keeps getting replayed. Apple quite obviously floated Motorola's phone while also cutting off its legs with the Nano at the same event. Nobody mentions the iTunes client on the SLVR, which actually didn't suck (the phone, not the limited client).

It's like he can't resist tying an albatross around Apple's neck to desperately make the company seem less magical or something. Is it wrong to give the company some credit for blowing out amazing crap over the recent years? If so, I don't want to be right.

- iPhone Gremlins: Crashing, Security, and Network Collapse! [roughlydrafted.com]

"In addition to showing off the iPhone's pretty interface as part of its first impression--including the Google Maps client Steve Jobs used to locate a Starbucks in order to place a crank call for a thousand coffees at Macworld--he also described the rationale behind the closed platform iPhone as a security and stability issue. Was he kidding?"

why do businesses exist?

[falconwolf]

Most buisnesses exist and function soley so that they can take as much of your money as possible;

I disagree. Most businesses are started because the founder(s) have a vision of what's possible, as with technology. The WOZ [woz.org] didn't design and build the Apple I [wikipedia.org] to make money, he wanted a computer he could use at home. Much like Bill Hewlett [wikipedia.org] and Dave Packard [wikipedia.org] he did the work in a garage. It's only later, usually after incorporation, that some turn to the idea of making money. But then they have shareholders they have to satisfy.

Falcon

Re:elite

[onkelonkel]

What does a Rolex _do_.? It costs a lot of money. This will occasionally impress some people. If impressing people who are impressed by Rolexes is important enough to you to make the $3000 cost worthwile then by all means buy one. Being impressed by $3000 wristwatches is totally incomprehensible to me.

I wear a $29 timex ironman. It keeps almost perfect time (loses 4 seconds a year), it has a countdown timer and 2 alarms and runs about 5 years on a battery. Nobody is going to hold me up for my watch either.

Re:elite

[seebs]

There's a sort of metalanguage there; you spend the money to communicate that you're committed to making an impression, which is a way of establishing group membership.

You know what? I never want people like that to talk to me. I will stick with jeans and t-shirts, because that gets me into conversations with people who have something to say, which is much more interesting to me than "a LOT of money".

Over hyped? No, genuine excitement.

[Gary W. Longsine]

Apple really hasn't done much hyping of the iPhone, if you think about it.

• January 10, 2007: MacWorld 2007 keynote, introduces iPhone
• Apple.com iPhone web site
• A couple interviews showing the phone, letting reporters hold it for a couple minutes
• A very few magazine articles with access to Steve Jobs and the iPhone
• Super Bowl "Hello" iPhone commercial
• June 3, 2007: Apple starts running four new commercials that demonstrate features of the phone

Really, this is far, far less promotion than you see for typical new products. Heck, hamburgers at Burger King get more hype than this, by far, in a six month period. Even though they probably eat a whole bunch of them, bloggers don't get excited and blog about it.

Apple's biggest contribution to the "hype" came from keeping the project secret until it was up to a point where it could be demonstrated, and then keeping their mouths shut after the MacWorld Keynote, and refusing to answer questions about anything that wasn't demonstrated by Steve Jobs on January 10.

What we're seeing in the media, blogs, and in meatspace is, I think, genuine excitement. People can look at the information that's available, which is I grant you incomplete, but they can also look at the phone in their hand. They can tell immediately that several things they don't like about their phone are fixed by the iPhone. Visual Voicemail is damned exciting. A phone that can access the internet simply and easily is exciting. The Google Maps commercial makes girls squeel and giggle with delight when they see the pins drop... (try it sometime.) I don't think it's hype. I think it's genuine interest.

Re:Another pre-emptive iPhone Hype Artcile

[DECS]

>>The last thing that enjoyed this much hype was Snakes on A Plane. Remember how good that was when it actually came out? I predict iPhone will share the same fate, and shares of Apple will plummet!

I already used that joke on about the Zune!

In both cases = lots of fake astroturfed excitement, no real excitement from users. The media celebrated the Zune until it was obvious that it had bombed.

With the iPhone, there is real excitement from users, but lots of criticism from the media, particularly trolls hoping to FUD it out of existence.

If you haven't noticed, the market does not agree with you.

iPod vs Zune: Microsoft's Slippery Astroturf [roughlydrafted.com]
Zune vs. iPhone: Five Phases of Media Coverage [roughlydrafted.com]