At the core of Apple’s product strategy shift was a doubling down on autonomy within its product development process. The Apple machine is operating at such speed and scale, it’s not realistic to think one person can control or run the machine. Apple wouldn’t be able to push its entire product line forward simultaneously if every decision had to go through one gatekeeper. Instead, the Apple machine was designed to take on a certain level of autonomy in order to instill Apple’s values in all employees. Designers of various disciplines have been given greater say over the user experience.
Floundering Competition
As product strategy changes were underway within Apple, the competition began to flounder. A growing number of bad product bets were placed, peaking with the ultimate misdirection in tech of the past decade: voice computing and the stationary smart speaker mirage. The subsequent embrace of stationary screens positioned on kitchen countertops has seen limited adoption. Foldable smartphone sales have not been impressive. Apple competitors are now struggling to capture consumers’ attention and money with routine annual smartphone updates.
We are at the point when tough questions have to be asked about Apple’s competition, or lack thereof. What company can realistically give Apple a run for its money? The number of paid subscriptions across Apple’s platform is increasing by 170 million per year. Google wants to compete in some hardware verticals that Apple plays in, but it’s fair to question Google management’s commitment. At times, their heart just doesn’t seem in it. Amazon and Microsoft have stronger motivations to do well in hardware, but their lack of design thinking is hard to miss. Meta would win the award for strongest public commitment to hardware, but the company’s culture and heritage don’t seem to mesh well with what it takes to do well in hardware. Snap, Spotify, Sonos, and the long list of smaller companies dabbling in hardware all lack the ecosystems to truly go up against Apple toe to toe.
When thinking of competition outside the U.S., a growing number of consumers are looking for entry points into comprehensive (and premium) ecosystems. Apple is selling both the all-around best smartphone in the market and tools and services designed to live both below and above the smartphone. Android switching rates are increasing while Apple entices hundreds of millions of iPhone-only users to move deeper into the ecosystem.
A risk that any company in Apple’s position will face is complacency. With most of its product categories, Apple’s largest competitor ends up being itself. The fact that Apple’s ecosystem updates are accelerating rather than declining as the competition breaks apart is a potential sign of Apple decoupling itself from the “competition drives us” mantra that is found in Silicon Valley. There is a deeper drive within Apple – a feeling that if Apple doesn’t create it, no one else will - that is driving teams forward.
Check out the daily update from April 5th for additional discussion on this topic.
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