22nd
Competing with Cool
By 2008 Apple, Inc. had become an icon of success and innovation in the business world. Much of Apple’s gravitas is undoubtedly tied to CEO Steve Jobs. No other CEO is the world garners such adoration and media attention. Indeed, in December of 2008 blogger Jeff Segal calculated that Steve Jobs is alone worth $20 billion in additional market value to Apple. His analysis, based on comparing Apple’s revenue, profits, and other variables against other competitors gained a great deal of publicity.
That Apple has become engrained in the world’s collective culture is indisputable. But has Apple changed “the rules” by which companies in the computing industry are expected to play? Further, is it fair to attribute Apple’s success to the brilliant mind of one man? Regardless, Apple’s success, whether it is a function of Steve Jobs alone or not, is a result of years of strategic decisions that have pushed the company to the pinnacle of not only the computing industry, but the entertainment industry as well. This brilliantly executed strategy has resulted in a company that dominates mindshare in the technology community, but still only represents less than 4% of the global PC market.
Apple’s strategies have forced the hand of stodgy media companies, pushing them to embrace the wave of digital innovations. First and foremost Apple gave consumers what they wanted: easy access to digital media in a stable and secure environment, wrapped in a beautiful form factor. Apple was investing in R&D and designing beautiful products while Dell was optimizing their Just In Time Inventory systems and HP was negotiating with their resellers. Apple didn’t change the rules of competition — no one company can do that. Instead, Apple changed the most important parameter in the great equation of competition.
It isn’t about supply chains, resellers, or exclusive partnerships. It’s about “cool”. Thanks to Apple the entire PC (and entertainment) industry has to compete with cool.
