When the Apple iPhone first launched it was truly ground-breaking. Other companies had previously launched smartphones, but these were either rudimentary, such as the IBM Communicator, or variations on a concept with a small screen and fixed keyboard. Each of these were designed primarily for business activities. However with the launch of the iPhone in 2007, Apple were able to provide a product that satisfied the mobile demands of both social and business consumers. It was the first device that combined a mobile phone with a music library, desktop-style web browsing, email, and additional apps – and all through a touchscreen.

In doing so, Apple performed a radical innovation. They threw out the old concepts used by companies such as Ericsson, Motorola, and Nokia, and they established a new dominant design that has been followed since, both by Apple, and their competitors. Yes there have been successor devices, and with each of these launches the product has gained more features. However these launches have alternated between incremental innovation of the core concepts, and architectural and modular innovations that have changed the components and concepts, all while retaining the general touchscreen and app design.

But where do Apple get these ideas from? Steve Jobs has been quoted as suggesting he does not agree with market research. At the time of the iPhone launch he said no one had previously been asking for a device that combined music, email, business apps, proper web browsing, and all in a mobile phone. Yet the idea proved to be very successful once he released it.

“Some people say give the customers what they want, but that’s not my approach. Our job is to figure out what they’re going to want before they do. I think Henry Ford once said, ‘If I’d ask customers what they wanted, they would’ve told me a faster horse.’ People don’t know what they want until you show it to them. That’s why I never rely on market research. Our task is to read things that are not yet on the page.”

Steve Jobs

Of course, if we read the quote in full Steve Jobs says he does not rely on market research. It doesn’t say he does not do it, or that he ignores it. Instead, the implication is that market research is not the only driver for product development.

Outside Ideas

Absorptive Capacity theory suggests that innovation can come from the absorbing of inputs from both internal and external environments. Internal sources of knowledge can come from the sharing of ideas between projects, changes to the organisational culture, the deliberate diffusion of knowledge throughout the organisation, and the removal of silos. External sources of knowledge can be from trade shows, informal conversations between engineers from outside companies, the recognising of trends, and the cooperation between rivals on non-competing technologies, as well as from discussions with customer groups.

Apple have demonstrated with collaborations, and the recent purchases of outside companies that they are fighting against the not invented here syndrome. They have realised that the expertise does not always exist within Apple. For example, when Apple wanted to move into wireless power charging they purchased New Zealand company Proxi. Apple also purchase the touchscreens for their iPhones from Samsung, even though Samsung is their main competitor in the mobile phone market. They are also not afraid to regularly recruit to bring new talent into the company.

Let The Experts Take Risks

One very clever thing that Apple has done is moved many of the R&D development risks out to external companies. Rather than Apple continuously developing screen technology for example, they have decided to simply buy in the best technology that is available, once it has proved itself. The screen manufacturing companies can risk their own R&D budgets trying out new and different techniques, while Apple sits back. Then when the screen technology jumps forward, such as when LCD moved to OLED, Apple can then jump in and place a big order with their chosen partner.

Learning and Knowledge Transfers

The collaborations, partnerships, business purchases and recruitment ensure continued learning and knowledge transfer. Even though Apple may potentially use the same hardware components as competitors, or recruit the same talent, Apple plan to get ahead by being the first to recognise the value of new external information, then assimilate it and apply it to the commercial market.

To do this they have had to remove the silo mentality and secrecy that has been prevalent within Apple for many years. And yet this is a battle that Apple is still fighting. To create the big marketing splashes and retain temporary leads over their competitors, Apple is slipping back into areas of secret development with siloed projects hidden away from the general development community. Occasional newspaper reports suggest Apple is working on its own microchip, or battery, or screen. Although this may give Apple an edge of their competition, they need to ask themselves, it it worth entered into areas where we are not the true experts?

Your Business Can Benefit

Your business does not need to do everything inhouse. Perhaps there are non-core components of your product that could be manufactured or developed outside. Perhaps its something on the periphery of the business that it is essential that your business has, but not essential that it is done directly.

Dedicated floors of office space could be let go, with WeWork style shared work environments taken up instead – you can still have dedicated offices within the floor but save on the facilities team.

Racks of servers in the IT department could be discarded, with use of Amazon Web Services hosting in the cloud. You can still have full servers, or shared hosting, and at a fraction of the cost of running it yourself.

Rather than pay large sums for dedicated software to be written to fulfil a business task, you could look out for SaaS, software that is cloud hosted, that is ready to use straightaway.

If you would like some quick advice then please add a comment below, or send me a direct message.

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