The how and why of Apple’s dominance; and why it is not done yet

by ashish_sharma_ait

iPod. iPhone. iPad. Why Apple is Done Inventing New Devices.
[Via Cult of Mac]

Most of Apple’s money comes from recently invented gadgets. More than two-thirds of Apple’s revenue comes from product types that didn’t even exist five years ago (iPhone and iPad). And 78% of Apple’s income is made by products unimaginable just ten years ago (throw in iPod and iTunes).

That means, in order to stay on the same growth curve in the current decade, Apple will have to invent product categories as new as the iPod, iPhone and iPad were, right?

Wrong.

The new products were part of a killer strategy Apple came up with in 1997. Apple will dominate the future by sticking to the strategy, not by trying to invent more product categories.

[More]

I have to disagree in part with the article – Apple is not at the end of its innovative cycle. Think innovative networking technology such as white-fi. That will be the final step.

The strategy was to realize that digital content would drive the coming markets – creating it and consuming it. Apple already had a head start on the creating it side. In 1997, it decided to make moves into consuming it.

Almost every move since has been along these lines. It started creating a series of computers designed more for consumption than creation of digital content – first the iMac, then the Macbooks, now the Macbook Air. First no floppy. Then no CD/DVD drives. Everything now comes from digital content served over a network or the Internet.

Then the iPod for consuming music – now no real need for a CD or a CD players. I would bet most CD sales today are made to rip the music into the digital world Apple has helped create.

Then the IPhone – taking an awkward device and bringing it into the age of digital consumption.

Then the iPad –  bridging the gap between digital consumption and creation while providing a unique form factor for entirely new ways to deal with digital.

In Apple’s world, the only physical tools you will need will be Apple’s.  Everything else people will get via Internet downloads. This we now see the reason for iCloud and the fact that their new operating system is download only.

The only thing really hampering Apple in this world – they do not control the connections between the Internet and their  devices. They have all this nice digital content online but have to rely on others to permit the users to get this data.

Apple has had to rely on ATT and now Verizon to provide the connection to the data that Apple wants its customers to access. Or users have to rely on ISPs and wireless hotspots.

But white-fi presents the opportunity for Apple and other high tech companies to  provide these connections between digital devices and the digital realm, without relying on the needs and economic pressures of other corporations. White-fi, for example, has the possibility in certain areas to send a signal 100 km from the transmitter and to permit speeds of 22Mbps.

ATT just accidentally told everyone that upgrading to faster wireless will not cost $38 billion but only $3.8 billion. Pocketchange for Apple and Microsoft. What would happen if a high tech consortium of MS, Apple, Google and others put in money to create their own data service for their customers? Google is already investigating high speed connections for users, as well as wireless transmission.  I expect they all have money in the bank to pay for such a thing. It could use wifi, white-fi, LTE or even new emerging technologies to service their users in ways the wireless carriers still refuse to.

Then Apple and Microsoft will be able to also provide video chatting with their own customers via Face Time and Skype, on handsets whose prodcution they control. Then why would we need the wireless carriers?

So, I think there is one more innovative technology Apple will unveil at some point — the connection to the Internet. Apple will provide the direct connection between the user’s digital device that it sells with the digital data that it serves.

That would be a marvelous day!