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The Apple iPod Story

Ask 10 random people on the street what is the most innovative company in the world right now and I wouldn’t be surprised if you hear Apple 10 times.  So, we can’t get far into this blog without a story about Apple.

In the late 90s, as the Internet was taking off, Apple was on its last legs.  In fact, back in 1997, when Steve Jobs first started working at Apple again (before he was named CEO), Michael Dell (founder of Dell Computers) was quoted as saying that if he was in charge of Apple, he’d liquidate the company and return the money to the shareholders.

What a great quote, here we are at the end of 2013 and Apple is the most valuable company as well as most valuable brand in the world.  Meanwhile, Dell Computers was recently taken private by a group led by Michael Dell, largely because the market for personal computers has shrunken considerably as people turn towards alternatives like smartphones and tablets (um, like the iPhone and iPad).

So, what is Apple’s secret?  Was it all just Steve Jobs (and right hand man Johnny Ives)?  Today, we tend to think of Apple as being a top-down organization.  They are seen as secretive, fast, cool, and radical with a global scope and their success is all but inevitable.  But was this really the secret sauce that Steve Jobs brought back to Apple in the late 90s?

Let’s look at the invention of the iPod, the product that really put Apple back on the map, transformed it from a personal computer manufacturer to a personal electronics manufactures (spurring them to change their name from Apple Computers to simply Apple), and started the tremendous growth that Apple has enjoyed in the 21st century.

Few people seem to know that the iPod was actually proposed by an Independent Contractor named Tony Fadell.  Fadell developed the complete iPod/iTunes platform in just 8 weeks after proposing it to Apple.  At this point, Steve Jobs took an interest and Fadell was given carte blanche to hire partners and a team.  Now an employee at Apple, Fadell created and led a team of 35 from Philips, IDEO, General Magic, Apple, Connectix, and WebTV.  Apple designed the user interface and exterior design but outsourced  the technical design to a company called PortalPlayer.  In turn, PortalPlayer provided the platform and selected other design chain partners like Toshiba, Texas Instruments, and Wolfson Microelectronics.  All in all, the iPod went from concept to development in just 6 months!

What led to the success of this process?  In the end, it was speed and openness, combined with business system innovation and rapid, iterative collaboration between Apple and its partners.  Apple’s secret appears to be its ability to manage contradictions.  So, beyond the perceptions we see:

  • Secretive, Insular –> Open, collaborative
  • Top-down –> Inspiring, fulfilling
  • Machine-like –> Evolving
  • Fast –> Persistent
  • Cool and creative –> Disciplined executor
  • Global Scope –> Developed world focus
  • Inevitable successful –> Fortunate
  • Dominant –> Challenger, cannibal

Much like the contradictions that we saw with the word “hacker.”  Innovation and contradiction seem to be closely tied together!

 

Apple iPod Development

 

Image from: http://www.digieco.co.kr/KTFront/forum/ForumFileDown.action?file_id=376&fileName=%EA%B0%9C%EB%B0%A9%ED%98%95_%ED%98%81%EC%8B%A0_(open_innovation).pdf&forum_id=rnd