Apple & The Innovator's Dilemma

obvious Child · Aug 15, 2013

The Innovator's Dilemma is a book by Clayton Christensen.

The basic premise is how big, successful companies go about doing their business in all the right ways but decline by failing to see how smaller rivals can disrupt their business.

Good examples are the ones Christensen mentions primarily, such as how small steel mills took over the low margin rebar business from the big mills and eventually innovated up until there was nothing left to disrupt, causing the big steel mills endless problems.

Another is how Andy Grove, Intel's CEO had a talk with Christensen about his theory and put into place the Celeron Processor to prevent Cynix and AMD from doing the same thing to Intel. Seems that Grove didn't quite see ARM processors in the same way though and ARM manufacturers like Qualcomm have been eating Intel's lunch lately, disrupting their business on the mobile side.

Right now, I personally see Android being the serious disruptor for Apple. It's already gotten to the point where Android phones are taking larger and larger chunks of the high margin business. Tim Cook seems to realize this is happening with the tablet market and thus why the iPad Mini came out chasing both the Amazon Kindle and the Google Nexus. The rumors about a Retina iPad Mini seems to suggest that Tim Cook is taking this threat seriously to the point he's willing to sacrifice significant margin (as well stock price) to disrupt the disruptor. The rumored low cost iPhone at this point seems like a token gesture as the high end smartphone market has already been disrupted.

So what are your thoughts? Has Apple gone from being the disruptor to the disruptee?

specklebang · Aug 15, 2013

obvious Child said:
The Innovator's Dilemma is a book by Clayton Christensen.

The basic premise is how big, successful companies go about doing their business in all the right ways but decline by failing to see how smaller rivals can disrupt their business.

Good examples are the ones Christensen mentions primarily, such as how small steel mills took over the low margin rebar business from the big mills and eventually innovated up until there was nothing left to disrupt, causing the big steel mills endless problems.

Another is how Andy Grove, Intel's CEO had a talk with Christensen about his theory and put into place the Celeron Processor to prevent Cynix and AMD from doing the same thing to Intel. Seems that Grove didn't quite see ARM processors in the same way though and ARM manufacturers like Qualcomm have been eating Intel's lunch lately, disrupting their business on the mobile side.

Right now, I personally see Android being the serious disruptor for Apple. It's already gotten to the point where Android phones are taking larger and larger chunks of the high margin business. Tim Cook seems to realize this is happening with the tablet market and thus why the iPad Mini came out chasing both the Amazon Kindle and the Google Nexus. The rumors about a Retina iPad Mini seems to suggest that Tim Cook is taking this threat seriously to the point he's willing to sacrifice significant margin (as well stock price) to disrupt the disruptor. The rumored low cost iPhone at this point seems like a token gesture as the high end smartphone market has already been disrupted.

So what are your thoughts? Has Apple gone from being the disruptor to the disruptee?

I want to say up front that I only skimmed the Wiki article and I sure didn't read the book. So, with a 5 pound grain of salt.......

The stupidest thing I have seen in business is the endless demand for growth. This is the insanity of public companies vs. privately held ones. You can find a company like Grapple, they can make 100 billion dollars in 2010 and their stock will be $500. Then, in 2011 they make $70 billion and their stock will fall like a rock. After all, the CEO was paid a billion one year and this year he wants 2 billion, not 500 million. So, they'll take desperate measures. Fire the workers and hire H1Bs. No more free toilet paper - put in a coin operated dispenser.

Now, I'll tell you a story about The Specklebang Corporation. It's based on a true story but some of it is bull**** for dramatic purposes.

In year one, we lost $20K. In year 2, we made $50K, in year 3 we made $500K, in year 4 we made $1M and so forth. By year 10, there were partners, some rewarded for their efforts, some who invested money, time and equipment. At a meeting, I spoke about our future prospects which began to dim because of internet competition. I told the group that this coming year we would make less than the year before. Such wailing and hysteria. Much boo-hoo.

So, I said "hey, schmucks, why the bitching? We're still making over a million. They said we must grow, I said I was too tired. They said that without growth, their income would fall. I said "so what, you're already rich". They said "we must have more, not less". So, I sold my shares and went on to a life of sex, drugs and rock and roll. I grew my hair down to my ass, got teeny bopper girlfriends and followed the Dead. They kept drawing money out until the company collapsed.

Stupid. Who needs all this growth? If Grapple closed up today they'd still have more money than god. Greed. It''s all just greed. How much is enough?

Just saying.....

Apple - you can tell that without Steve, they having got the moxie. Cook ain't Steve. They can still sell a few Iphones...

(any resemblance to reality is purely coincidental)

PirateMk1 · Aug 15, 2013

specklebang said:
I want to say up front that I only skimmed the Wiki article and I sure didn't read the book. So, with a 5 pound grain of salt.......

The stupidest thing I have seen in business is the endless demand for growth. This is the insanity of public companies vs. privately held ones. You can find a company like Grapple, they can make 100 billion dollars in 2010 and their stock will be $500. Then, in 2011 they make $70 billion and their stock will fall like a rock. After all, the CEO was paid a billion one year and this year he wants 2 billion, not 500 million. So, they'll take desperate measures. Fire the workers and hire H1Bs. No more free toilet paper - put in a coin operated dispenser.

Now, I'll tell you a story about The Specklebang Corporation. It's based on a true story but some of it is bull**** for dramatic purposes.

In year one, we lost $20K. In year 2, we made $50K, in year 3 we made $500K, in year 4 we made $1M and so forth. By year 10, there were partners, some rewarded for their efforts, some who invested money, time and equipment. At a meeting, I spoke about our future prospects which began to dim because of internet competition. I told the group that this coming year we would make less than the year before. Such wailing and hysteria. Much boo-hoo.

So, I said "hey, schmucks, why the bitching? We're still making over a million. They said we must grow, I said I was too tired. They said that without growth, their income would fall. I said "so what, you're already rich". They said "we must have more, not less". So, I sold my shares and went on to a life of sex, drugs and rock and roll. I grew my hair down to my ass, got teeny bopper girlfriends and followed the Dead. They kept drawing money out until the company collapsed.

Stupid. Who needs all this growth? If Grapple closed up today they'd still have more money than god. Greed. It''s all just greed. How much is enough?

Just saying.....

Apple - you can tell that without Steve, they having got the moxie. Cook ain't Steve. They can still sell a few Iphones...

(any resemblance to reality is purely coincidental)

Sounds like a made for TV drama. Who will play you? Mind you no A-Listers they don't do TV.

obvious Child · Aug 15, 2013

specklebang said:
Stupid. Who needs all this growth? If Grapple closed up today they'd still have more money than god. Greed. It''s all just greed. How much is enough?

It's not about a company's growth per se, it's more of its competitors growth into the niches and industries that matters. And in most business, you stay still, you die. Apple right now looks like it's being disrupted on all fronts rather than it being the disruptor.

Apple - you can tell that without Steve, they having got the moxie. Cook ain't Steve. They can still sell a few Iphones.

Larry Ellison seems to disagree that they still have moxie. It's clear that Cook ain't Jobs. Merely because they can still sell iPhones doesn't mean it's not happening to them. Big steel still sells steel. Intel still sells processors. But neither of them are quite where they were from years ago.

AGENT J · Aug 15, 2013

obvious Child said:
The Innovator's Dilemma is a book by Clayton Christensen.

The basic premise is how big, successful companies go about doing their business in all the right ways but decline by failing to see how smaller rivals can disrupt their business.

Good examples are the ones Christensen mentions primarily, such as how small steel mills took over the low margin rebar business from the big mills and eventually innovated up until there was nothing left to disrupt, causing the big steel mills endless problems.

Another is how Andy Grove, Intel's CEO had a talk with Christensen about his theory and put into place the Celeron Processor to prevent Cynix and AMD from doing the same thing to Intel. Seems that Grove didn't quite see ARM processors in the same way though and ARM manufacturers like Qualcomm have been eating Intel's lunch lately, disrupting their business on the mobile side.

Right now, I personally see Android being the serious disruptor for Apple. It's already gotten to the point where Android phones are taking larger and larger chunks of the high margin business. Tim Cook seems to realize this is happening with the tablet market and thus why the iPad Mini came out chasing both the Amazon Kindle and the Google Nexus. The rumors about a Retina iPad Mini seems to suggest that Tim Cook is taking this threat seriously to the point he's willing to sacrifice significant margin (as well stock price) to disrupt the disruptor. The rumored low cost iPhone at this point seems like a token gesture as the high end smartphone market has already been disrupted.

So what are your thoughts? Has Apple gone from being the disruptor to the disruptee?

I "personally" never though apple as either

IMO they will never win the PC market but they will continue to make money

as far as cell phones/tablets

their appeal is the same in this area, mainly but certainly not all NOVICES and people who are OK with their over controlling soft/firm/hardware.

its not like their products are junk or anything like that but they are just user friendly to the novice, rookie, and uneducated, they also have GREAT "marketing"

but the reality is theres nothing really the iphone or ipdad or ipod did/does that is revolutionary, unique or dominate. Especially to the point of controlling the market because it cant be replicated.

also i wouldnt call android the disruptor id call them the leader, IMO i see it like this

yeah in the US Chrysler probably outsells Lamborghini im sure, or the dodge dart might outsell an BMW M5 but i dont view chrylser as the leader

buuuuuut thats just my opinion

specklebang · Aug 15, 2013

obvious Child said:
It's not about a company's growth per se, it's more of its competitors growth into the niches and industries that matters. And in most business, you stay still, you die. Apple right now looks like it's being disrupted on all fronts rather than it being the disruptor.

Larry Ellison seems to disagree that they still have moxie. It's clear that Cook ain't Jobs. Merely because they can still sell iPhones doesn't mean it's not happening to them. Big steel still sells steel. Intel still sells processors. But neither of them are quite where they were from years ago.

When they replaced the Ipod mini with a bigger Ipod mini, I could tell they were lost.

JC Callender · Aug 15, 2013

Apples biggest problem is no Steve Jobs.

obvious Child · Aug 15, 2013

specklebang said:
When they replaced the Ipod mini with a bigger Ipod mini, I could tell they were lost.

Haha. I remember seeing a mini in the wild. One of my old coworkers at an old job had one.

Apple & The Innovator's Dilemma

obvious Child

Equal Opportunity Hater

specklebang

Discount Philosopher

PirateMk1

obvious Child

Equal Opportunity Hater

AGENT J

"If you ain't first, you're last"

specklebang

Discount Philosopher

JC Callender

obvious Child

Equal Opportunity Hater

Apple & The Innovator's Dilemma

Equal Opportunity Hater

Discount Philosopher

Equal Opportunity Hater

"If you ain't first, you're last"

Discount Philosopher

Equal Opportunity Hater

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