16 February 2011

Is Apple sustainable?

Now that Steve Jobs has handed over the CEO role to his successor - Tim Cook - the question everyone is asks is 'will Apple be able to sustain its momentum?' This question is being echoed around the world and a multitude of answers and POV's have popped up everywhere. At the risk of being redundant I would still like to add another POV to this.


The impact of Apple on mobile today is almost beyond believe. The iPhenomenon has taken the mobile, media, music and PC industry by storm. As an example, Apple did only enter the mobile phone area less than 4 years ago. In a ridiculously short time span of 2 years, they redefined the whole mobile phone user experience. In less than 6 years they've single-handedly created the only major revenue stream for musicians and record labels in the digital space. They're now repeating this for the movie industry with the iPad and all of this through one single point of commerce contact... iTunes.

What started out as clunky iPods and a very basic version of iTunes has grown so drastically over the past several years that Apple is now the world's second largest company in terms of market capitalization, after Exxon.

The impact on us in terms of mobile services and marketing agencies has been tremendous. Applications have become a mainstay in todays mobile marketing. Mobile sites are more relevant than ever in regards to marketing purposes. Apple MUST have inspired Google to introduce Android and has certainly turned up the heat on Nokia to temperatures that even the sauna-loving Finns find unbearable.

So whether you like Apple or not, its a player you cannot avoid when you're in the mobile and/or mobile marketing arena.

From a business point of view, creating a sustainable business is beyond doubt one of the biggest possible achievements. Popular reads like 'Good to Great' and 'Built to Last' provide insights in a variety of Fortune 500 companies that got it right. IBM, HP and General Electric are among them. They've been around for decades if not more than a century. During their existence they've weathered a great many changes, crises and challenges. Some, like Nokia, have changed their core business completely, where others have stayed closer to the intentions of their founders. But in general, the majority of businesses cease to continue operating, or are acquired, absorbed and forgotten.

The question is, what makes these businesses sustainable and why have they survived? Is it a question of adaptation or goal setting or just luck? How do you ensure that a business model evolves over time?

Although a great many explanations have been given there is one simple thing that regroups most of the reasons why a business would survive; vision and a mission.

While a vision is about is providing a perspective and direction, the mission is about what a company really would like to achieve for its customers. The vision is needed to see changes coming and innovate products & services before the competition does. It is at times also about disruptive change for which great business leadership is necessary. For example. when IBM decided to pull out of PC and lap top production, selling it to Chinese Lenovo. In hindsight this has not harmed IBM at all. It must have generated heated debates internally at IBM though before they managed to take that step.

Now what about Apple? Innovation based on visionary thinking? Tick. Disruptive change? Tick.But what about Apple's mission? Now here is where it gets interesting.

It might be clear from what Apple has done so far that they had a vision and that there was enough leadership to drive disruptive change. Beyond doubt Steve Jobs has played an all important if not determining role in defining the projects. He must have based this on some form of vision that included driving disruptive change in the market. This surely must have been part of his greater plan.

But when I started searching for an Apple mission statement I quickly found out that there is none. So, I ask you, is this bad?

The thing is, without a mission statement it can quickly become unclear for future employees of Apple what the brand stands for. How do you transfer the 'meaning of a company's life' to the next generation?

A mission statement can of course not be disconnected from a vision. If one knows what the company's going concern is because there's a clear mission statement, then a vision is needed to at least guide its resources into the right direction. Now as much as we all agree that Steve Jobs is a visionary leader, I struggle to find proof of how he communicates his vision, other than through releasing great products and services under the Apple brand. What matters in all of this is the closed character of Apple's products, its brilliant user interface design and the perfect integration of iPhone's, iPads, applications, music, iTunes and basically everything they produce. Take the notification for example that shows up on your iPhone when there's an update available, for one or more apps on your device. 90% of the users update their apps instaneously. The marketing and customer relationship implications of this feature on its own are enormous.

The question remains however, how much of Steve's brilliancy is transferable and how will this affect Apple's sustainability? I have nagging doubts about this and I am sure I'm not alone in this.

Don't get me wrong here though. I am not saying that Apple is about to go away any time soon. The trouble though is that they've had a 'Job-less' period where they completely lost the plot and quickly fell into the trap of producing shortsighted evolutions of existing products.
Apple will be able to leverage its current product range for quite a while longer, churning out fine revolutionized versions of the iPhone, iPad and all their computer variations. But what if higher resolution displays, faster processors, more memory and a slicker UI run out of steam?

Apple, being what it is, with its tendency for secrecy and total control, has not yet reassured its shareholders that it can transfer its core values and competitive edge to a future generation of managers and leaders.

Why I find this important against the background of mobile and iconmobile's own core-business values is that somehow it shows that there's an opportunity for existing players in the market to analyze Apple in detail. Maybe there's a mission statement and a vision that can be derived from which consumers and businesses alike can benefit in the future. I would like to conclude with three observations around this:

  • First and foremost it would be good to have a real competitor for Apple. Windows Phone is a good first step, Android certainly isn't. Thrown into the market by Google because they can, it now starts showing the same grueling compatibility issues as we know so well from Symbian. However, some of the Apple business model aspects, such as the complete control on application approval are beginning to irritate quite a few big brands in the market so there is room and opportunity for a new player.
  • Secondly, it would be great to continue seeing great products coming out of Apple. The joy and delight they bring everywhere in the world for people from all ages and backgrounds is nothing short of amazing.
  • Last but not least, it would be great to understand what makes Apple so great and what we can learn from this in terms of UI design, digital business models and digital hardware.
In the mean time I wish Steve a good recovery. I hope he will realize that a great leader is even greater if others can stand on his shoulders.

Matthieu Vermeulen – Managing Director iconmobile France

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