Tuesday, September 15, 2015

Apple, the most productive company on Earth

Apple unveiled their newest products during their “Hey Siri” September event. What grabbed my attention was the following paragraph from Farhad Manjoo’s NYT article, “Apple’s iPhone Keeps Going its Own Way”:

In many fundamental ways, the iPhone breaks the rules of business, especially the rules of the tech business. Those rules have more or less always held that hardware devices keep getting cheaper and less profitable over time. That happens because hardware is easy to commoditize; what seems magical today is widely copied and becomes commonplace tomorrow. It happened in personal computers; it happened in servers; it happened in cameras, music players, and — despite Apple’s best efforts — it may be happening in tablets.

The “Commoditization” of a tech product mentioned here refers to the lowering of its price due to a reduction in its manufacturing costs. As important as this improvement in mass production technology is,1 Apple manages to maintain its huge margin of profit precisely by outsourcing this kind of “commoditization innovation” overseas, to the likes of Foxconn (for outsourced assembly) and Samsung/LG/Sony (for outsourced parts such as batteries). As Ben Thomson says, “Apple’s scale gives them unmatched leverage in the global supply chain, ensuring Apple always has the best components made in the best factories for the best prices.”

Apple instead focuses on another kind of innovation: what many call the “surprise and delight” factor. Now that we have the final details of the 9th iteration of Apple’s flagship smartphones (I count the original iPhone, 3G, 3GS, 4, 4S, 5, 5S, 6, and then 6S), I thought it would be fun to try and identify the big milestones along the way, to see exactly how Apple has managed to deliver the “surprise and delight” factors time and time again for the last 8 years:

1. The original iPhone was a revolutionary computer-in-a-pocket that delighted customers with the natural and intuitive user experience enabled by capacitive multi-touch screen (“you had me at scrolling”). This buttery-smooth performance that iPhones came to be known for was not really matched by the competition, to the extent that in 2012, Google decided to address this issue specifically with the Android Jelly Bean 4.1.2 initiative aptly named “Project Butter”.

2. One year after the release of the original iPhone, the most significant “delight factor” in iPhones arrived in the form of the App Store. Even Apple was taken by surprise by the explosion in its popularity, especially when it came to games.2 The quantity and quality of native iPhone apps really helped differentiate iPhones from the rest of the smartphone crowd (read: Android). But the competition gradually caught up: Android apps caught up first in terms of quantity, and then (eventually) in quality as well. While some might disagree with that last point, no one can deny that Android has now become a mobile platform that companies like Instagram can no longer afford to ignore. The buttery-smooth performance and the sheer volume and quality of apps of iPhones could no longer be held as unassailable. By the time iPhone 4 was to be announced, Apple needed to deliver another delight factor.

3. And boy did they deliver. iPhone 4 was the first mobile device to sport a high-pixel density screen, and it was a qualitatively different experience from what was on the market up to that point. In the same way that original iPhone ushered in the era of stylus-free capacitative-touch smartphones, Apple’s “resolutionary” introduction of the “retina screen” with the iPhone 4  (and later with iPad 3) essentially started the trend in the entire tech industry of developing screens with ever higher and higher pixel densities [and “ppi” was added to the list of metrics by which tech-savy customers appraised a mobile device]. It is actually amazing to think that before iPhone 4, no one really complained about their 1024 x 768 screen resolution of their laptops for well over a decade.

4. In addition to buttery smooth touch-screen operation, easy-to-install-and-run apps and high pixel-density screens, Apple quietly introduced another standard that soon came to be expected of any new mobile device:  simple design, metallic material, and chamfered edges. Many people still point to the hardware design of iPhone 4 and 4S to have been the most revolutionary and significant. The trend of using more and more metal in mobile devices was real: HTC One series was praised for its execution in embracing this trend; Samsung disastrously tried to ignore this trend with Galaxy S4 and S5, even though it had its reasons for doing so (replaceable battery, expandable memory, IP67 waterproof design).

5. Let’s categorize the above four innovations into three groups: “mostly-hardware improvement”, “mostly-software improvement”, and “hardware and software improvements working in conjunction”. The App Store (2.) clearly falls in the software category; the material/design (4.) falls in the hardware. But the other two (1. touch-screen performance, and 3. retina screens) fall into the hardware+software category. The next “delight factor”, introduced with iPhone 4S, also falls into this last category: a fast and easy-to-use camera. Starting from iPhone 4S, Apple’s iSight cameras consistently delivered shooting experience and image qualities that were delightfully superior to the competition. With its yearly camera improvements, Apple has been the trailblazer in smartphone camera performance. And now, camera performance is something we all expect (along with performance, ecosystem, screen, and design) from a good smartphone.

Apple has not always gotten it right. I can see at least two areas where Apple was either late to address, or has yet to seriously address real customer needs when it came to using mobile devices: screen size and battery life. iPhone 5’s increase in screen size was too little and too late; Apple’s insistence on making iPhones thinner and thinner is incongruous with the needs of most customers who would rather sacrifice thinness for a much-improved battery life.

6. With iPhone 5S, Apple introduced Touch ID and the M7 motion coprocessor. As impressive and important as they are, I will not include them in this list of “key delight factors.” Instead, I want to finish off this list (as of September 2015) with the 3D Touch. A clever extension of the Force Touch first showcased on the Apple Watch and the new 2015 MacBook Pro trackpads, 3D Touch is Apple at its best: leading the technology industry with a new direction with the introduction of a new “surprise and delight” factor. Notice also how this is another example “hardware and software improvements working in conjunction; again made possible by the fact that the company controls both the hardware and software layers of its products.

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But there is something more important than the fact that Apple has the ability to design every aspect of its hardware and software: Apple understands that its main product is “customer experience” — the “delight and surprise” factor. Here is Steve Jobs during a Q & A session at Apple’s 1997 developer conference:

And one of the things I’ve always found is that — you’ve got to start with the customer experience and work backwards to the technology.

This almost obsessive focus on getting the customer experience right is what gives Apple its edge, not only in the introduction of some new hardware/software technology, but in its execution of the said technology.

David Allen (of “Getting Things Done” fame) defines “productivity” in the following way:
Productivity is not just about producing more; it’s about producing experiences. In other words, if you go on a vacation to relax, but you don’t relax because the last two days before you left created such a chaos... that’s an unproductive vacation. If you go to party to have fun and to rock out, and you don’t, then that’s unproductive. Productivity is simply about achieving desired experiences as results, but those could be relaxation, or could be fun.3

In that sense, then, Apple is the most “productive” company in the tech industry right now.

1 It is what makes our 21st century quality of life possible.
2 It’s quite remarkable that until 2009, Steve Jobs was still predicting a mobile future dominated by web apps instead of native apps.
3 In short: “Make sure you get the right things done, and focus on the big picture.”

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