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. "

Comments

Apples the king at failing

[Richard McBeef]

I mean, hell, they've been a doomed company for what 10 years now? 12?

Re:Apples the king at failing

[NDPTAL85]

Of course Microsoft and Apple are both trying to make as much money as they can.

The difference between the two is that with Apple the exchange of money for product represents a transaction that benefits both parties. A happy company and a satisfied customer. With Microsoft all you get is a happy Microsoft and an angry/sad customer.

So Microsoft customers get the raw end of the deal. They pays their money and get nothing in return.

Not to stigmatize failure but to tolerate it

[Anonymous Coward]

I keep telling that to my father.

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, which looked alright... until the iPod came out. Don't underestimate the importance of style when it comes to selling consumer electronics.

Re:Bleh

[Applekid]

It's pretty much on-target within the Apple Product Cycle.

Obligatory link to The Onion

[angle_slam]

Oooh, Look At Me, I Read The Economist!

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.

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.

Same with Microsoft

[rlp]

Apple learned from its mistakes and tried again

Same with Microsoft, except it usually takes them three tries.

Re:Same with Microsoft

[Fnord666]

Same with Microsoft, except it usually takes them three tries.

I thought it was three tries before they gave up and just bought some company that already knew what it was doing.

Re:Same with Microsoft

[drinkypoo]

I thought it was three tries before they gave up and just bought some company that already knew what it was doing.

Close. They have to buy three companies before they get a product worth putting their name on.

Of course, that doesn't stop them from marketing the two other products as well. Sometimes concurrently.

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.

Re:Bias

[Applekid]

"Just look at the stability of the latest IIS vs the earlier ones, for example."

Clearly that was stolen from Apache. ;)

Look at it this way, when my sister walks into the women's locker room, she's greeted and smiles and can go about her business. When I walk into the women's locker room, it's screams and thrown soap and a visit from the police. Talk about unfair!

Tough bankruptcy laws?

[C10H14N2]

What sort of political shilling is that?

Perhaps the author should look towards Central Europe ca. 1991-2001 to see what economic wonders occur when you have /loose/ bankruptcy laws. It was GREAT for the "entrepreneurs" and loan officers working on "commission" when you could write a loan to finance your business, liquidate it, write off the loan having effectively pocketed the cash, then walk straight back to the bank to pull a new one for a new business, rinse, repeat and retire to the Caymans having produced absolutely nothing.

Mac wasn't born from the Lisa blunder

[Anonymous Coward]

The Macintosh was born from the wreckage of the Lisa, an earlier product that flopped

Not quite, they were developed at the same time. The Lisa project began in 1978 and released in 1983. The Macintosh, 1979, released 1984.

Makes sense!

[Shky]

I tried telling my parents when I was in high school that those were *wise* failures they were seeing on the report cards. If only this article had been around back then...

Not sure why they brought the ROKR into this

[raitchison]

The Motorla ROKR was designed to fail with the arbitrary 100 song capacity limit.

The last thing apple wanted was a successful ROKR that might have cannibalized sales from the iPOD and the Apple branded music phone that everybody knew would come out eventually.

If the ROKR were an Apple product, you could make a case that Apple "failed", in this case Apple succeeded, they held off the market until they could debut their own device that makes them money.

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:elite

[seebs]

You seem to be totally unaware that some things are actually better than other things, and some things are purely about status.

Not all status symbols are actually good. Most decent restaurants are actually better than fast food, but what exactly does a Rolex do that a regular watch doesn't?

A good segment of the population are, to put it bluntly, fucking morons who will believe anything they see on TV. That does not exactly bolster your case.

Re:Appeared to have failed?

[Weedlekin]

"The only NeXT technology that appears in Apple computers is BSD."

Well, there's Interface Builder. They got that from NeXT. But apart from Interface Builder and BSD, there are no NeXT technologies whatsoever in current Apple computers. Except of course for Cocoa, which is heavily based on NextStep/OpenStep, hence the fact that it has all those classes with names prefixed by "NS". But with the exception of BSD, Interface Builder, and Cocoa, there are no NeXT technologies in Apple computers at all. Unless of course you count Objective-C as a "technology", which NeXt licensed for programming in NeXTStep and OpenStep while Macs were being programmed in Pascal and C++. But I agree that apart from BSD, Interface Builder, Cocoa, and Objective-C, Apple computers are completely devoid of NeXT technologies. OK, I'll admit that Portable Distributed Objects also came from NeXT. I'll give way on that one. But if you discount BSD, Interface Builder, Cocoa, Objective-C, and PDO, current Apple computers are totally and completely free from NeXT technologies. Utterly without _anything_ from NeXT. Honestly. I mean, WebObjects, which is admittedly a NeXT technology, isn't even installed on most Macs, so _the majority_ of Macs are free from it. Well, they are. Really. So I can, without any pangs of conscience, categorically state that, with the exception of...

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.

Since I've got some karma to burn:

[jstockdale]

I mean, hell, they've been a doomed company for what 10 years now? 12?

Just longer than FreeBSD's been dying if I recall correctly ;-)

Netcraft confirms it!

(In Soviet Russia Netcraft confirms YOU!)

*ducks*

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.