Product Innovation Is Wired Into Apple’s DNA, and It Shows


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Apple has been held up as the poster child of ease of use and high value customer experience, but how did that all happen? My recent experience purchasing a Macintosh gave me a window into the answer.

I have always had trouble setting up a network involving wired and wireless computers, and when I was at the Apple Store, I asked an innocent question of the saleswoman, “Can you send someone to my house to set up the network?”

Sony had the personal music niche sewn up for a long time with the Walkman, but Apple saw the limitations inherent in having only one CD in the machine.

I expected her to give me some kind of description of Apple’s services or perhaps introduce me to a partner. Instead, she gave me a blank look, as in, “Why would we ever need to do that?” It was sort of like the waiter in the high-end restaurant not blinking when you ask for the steak sauce. Her answer was a crisp, “No. You just plug it in, and it works.”

“What do you mean you plug it in and it works?!” I wanted to scream. “Have you ever installed a network that just worked?! I have a Windows network at home right now that took days to install, a sleepless night and a six pack once it was all over. Nothing just works! This is technology! It works only eventually!”

She was right, though.

All this talk about the customer experience, as important as it is, masks something deeper in the marketplace today. When you get to a point where customer experience is important, you are generally late in a market’s evolution. There are usually multiple competent vendors selling similar products. Customer experience is something vendors address when they can’t really cut prices anymore and a product has enough features and functions to bewilder any geek.

At that point, vendors look for secondary or even tertiary characteristics to give them an edge. Other approaches worth considering in an aging market include product-line extension, value engineering (building more into the product), cost reduction and improving your business processes (a.k.a. making your company easier to do business with).

Not just another PC maker

Apple made its products easy use—as in setting up the network, using an iPod and the like—and itself easy to do business with (the Apple store). These were important decisions. But they were decisions Apple executives made a long time ago because they had to. They realized Apple would not be the No.1 PC maker and needed to make a niche for itself.

Apple became the über computer company, the manufacturer that made machines that did graphics and sound and movies before anyone else thought those things were important. It was the company that did spreadsheets to show that it made “real” computers. Apple leaders did all that and made themselves everything the competition was not: easy to do business with and at the heart of a great customer experience.

My point is that in a parallel universe, executives could have decided Apple was going to be another PC company and paid greater attention to customer experience. Had they gone that way, Apple would, indeed, have been just another PC company—working on razor-thin margins. Quite possibly, Apple would have gone out of business, as it came close to doing once.

I suspect the reason Apple was able to make that pivot is that the founder (though away from the company for 11 years), was involved and still is. Founders are product oriented, and I suspect that the reason Apple has done so well is that Steve Jobs is still at the helm and still cares fanatically about the product details. In other companies, the usual course of events is that a financial whiz kid takes over from the founder, and when that happens the name of the game is pleasing Wall Street first and the customer later. At Apple, the product-oriented founder learned enough boardroom politics and developed the business savvy to hang in there after one-time CEO John Sculley ousted him and he returned with Apple’s purchase of Jobs’ venture, NeXT.

With Jobs dictating the vision, Apple built ease of use into its DNA, and that enabled the company to invent and re-invent products that nobody else thought about. In addition to customer experience, engineers concentrated on product-line extension (Apple had one of the first notebook computers and one of the earliest hand-helds).

Sony had the personal music niche sewn up for a long time with the Walkman, but Apple saw the limitations inherent in having only one CD in the machine and the need to carry extras if you wanted variety. As a computer company, Apple was able to apply tiny high-density disk technology to the problem, and the iPod was born. In contrast, attention to customer experience led Sony to make modifications to the Walkman but it was like asking a fish to invent fire. All the modifications in the world couldn’t turn the Walkman into an iPod. Someone had to re-imagine the paradigm.

So my takeaway from all this is that although attention to the customer experience is important, even necessary, today, it is hardly sufficient for a company to prosper. Customer experience is a way to compete, but product innovation is still huge. That’s why the CRM 2.0 paradigm stresses getting closer to customers and using information you acquire both for messaging—to improve the sales of today’s products—and for defining and designing tomorrow’s products.

Today’s markets require some out-of-the-box thinking, and smart vendors will make sure that they don’t paint themselves into a customer experience corner.

Denis Pombriant
Beagle Research Group, LLC
Denis Pombriant is a well-known thought leader in CRM and the founder and managing principal of the Beagle Research Group, LLC, a CRM market research firm and consultancy.


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