Running head: APPLES INNOVATION STRATEGY

Apples Innovation Strategy

STR/581

Apples Innovation Strategy

Apple Inc. is considered the worlds best company by many magazines (Doughtery,
2011). Greatness comes in various ways but the humble start of Apple Inc makes its greatness
unique one. The business community and the world in general are not only marveled at the
height the company has attained but the advancement and financial strength it continues to
demonstrate.
In 2012, the year its visionary founder died and there was change of management, Apple
posted $36 billion dollar in revenue and a quarterly net profit of $8.2 billion compared to the
prior year when the company posted $28.3 billion revenue and net profit of $6.6 billion
(Johnson, Li, Phan, Singer, & Trinh, 2012). This paper evaluates the innovation strategy
employed by Apple Inc. The history of Apple is a worthy introduction to the topic.
History
Apple Inc. is an idea of Late Steve Job and his friend Steve Wozniak who were both high
school drop outs living at Silicon Valley. While the two were working for Hewlett Packard, they
teamed up to from Apple Inc. in the basement of Steve Jobs house (Society, 2012). The
company started in 1976 with innovation and sales of Apple 1 that was rejected by their then
employer, Hewlett Packard. The company went public in 1980 and the stock has always
performed very well. The stock closed at $113.45 on Friday 18, 2015 and has reached a peak of
$134.54 before. Sam Gustin (2012) described Apples winning strategy - has innovation,
opportunity and execution. According to Gustin (2012), Jobs does not wait for customers to say
what they want but instead Jobs and Apple define needs that customers do not know that they
have.

Apples Innovation Strategy

Innovation Strategy
This proactive innovation was displayed when Apple took over the retail music industry
with their iPods, iPhones and iTunes. Apple is currently exploring growth through innovations in
three major trends, namely Smartphone, tablets and personal item like watches. The next section
will address the description and evaluation of Apples innovation strategies.
The innovation strategy of Apple comes from the organizations ability to think outside of
the box and anticipate what consumers will want in the latest advances in technology. Apple will
partner with other business that have technology that will help Apple provide the newest and
best in technology. Apple had recently started production of the Apple TV, which relies heavily
on the use of applications, as well as new remote controls options through SIRI, and an
overhauled operating system. This is the next step in Apple's attempt to own the living room,
and arrives ahead of the company's own internet TV subscription service, expected to arrive
sometime in the next year (Bhagat, 2015). Apples use of technology could not be maintained
or created without multiple uses of opportunities: people, culture, processes, partners, and
networks all make Apples innovation strategy possible.
What has been historically true, is no longer the standard for Apple, as Steve Jobs has
since passed, and Tim Cook is at the helm. However, the general direction has held steady, with
mobile technologies leading the charge. According to Cook, innovation takes place at the
intersection of hardware, software and services (he might have added content) (Forbes, 2012).
We will briefly evaluate the pros and cons of the strategy and offer possible alternative views.
Anywhere one looks these days, an Apple device may be seen, whether its a handheld
device, hand worn device, or a mobile computer. The pros of the strategy are overwhelming.

Apples Innovation Strategy

Being the leader in the mobile industry is a major advantage. Apple has convinced the masses to
adopt technologies that no one could find a use for. A good example is an iPad. There were
tablets before it, but no one really had any use for them. They found a way to make it useful, and
to market it in such a way that other firms (such as Samsung) also found themselves in a position
to profit.
Strategic partnerships are also at the cusp of the overall innovation strategy. TomTom is
the company that runs the iMaps software. This is an area where Apple has no expertise, yet can
enjoy top quality mapping. Recently, there has been a partenship agreement made with Cisco, to
Deliver Fast Lane for iOS Enterprise Users (Apple, 2015). Some of the other partners for apple
are the major mobile carriers in the US, such as Verizon and At&t this is more on the retail end,
while the list on the manufacturing end is much longer. Foxconn has been in the news a good bit
as the manufacturer for most of apples technology, and the Chinese manufacturer has some
questionable working conditions. This in turn puts the beneficiary under fire, as the sponsor of
this activity. TPK Holdings makes the touch panels used in all Apple devices, and posting record
profits, with 70% of it coming from business with Apple. One thing to note though the
partnerships are often in absolute ignorance of competition. For example, Quanta Computer (of
Taiwan) manufactures most of the iMacs and Macbooks, but they also make HPs and Gateways
(CNBC).
The company seems to be aiming for singularity, but that is hardly a possibility,
especially given the continuing patent litigation and the speed of evolution of the high tech
market. The strategy that they are pursuing can be a drag if their partners back out of the deal, or
partner with a competitor. Also, pursuing technologies not yet known can mean wasted money,
as not all innovations are a hit.

Apples Innovation Strategy

Conclusion
Apples innovation strategy is an assertive one in nature, providing the ability to think
outside the box. This has positioned the company as a leader in new technological products such
as computers, tablets, television and phones. Apple will continue to form strategic partnerships
in order to present new cutting edge products and services. This will also assist in penetrating
new service markets to add to the very successful line up of products and services.

Apples Innovation Strategy

References
Apple Press Info, Apple and Cisco Partner to Deliver Fast Lane for iOS Enterprise Users,
Retrieved from http://www.apple.com/pr/library/2015/08/31Apple-and-Cisco-Partnerto-Deliver-Fast-Lane-for-iOS-Enterprise-Users.html
Bhagat, S. (2015). Apple Unveils new Apple TV, believes future of TV is apps. Retrieved from
http://www.washburnreview.org/news/apple-unveils-new-apple-tv-believes-future-of-tvis/article_0cba1592-5e1f-11e5-aaf9-4f2607fb49b0.html
CNBC, 10 Significant Apple Business Partners, retrieved from
http://www.cnbc.com/2011/08/25/10-Significant-Apple-Business-Partners.html
Johnson, K., Li, Y., Phan, H., Singer, J., & Trinh, H. (2012). The Innovative Success that is Apple
INc. Marshall University Scholar - These, Dissertationsand Capstones, 418 - .
Society, S. C. (2012). A Brief History of Apple Inc. Valley Hiostorical Society.
Shaughnessy, Haydn, (2012). Forbes. Tim Cook's New Innovation Strategy For Apple, Right On
Time. Retrieved on 9/20/2015 from
http://www.forbes.com/sites/haydnshaughnessy/2013/07/02/tim-cooks-new-innovationstrategy-for-apple-right-on-time/