Apple and the innovation dilemma

April 26, 2012

Just how long can Apple run the table in the post-Jobs era? It was simply a matter of time before those whispers turned into a question asked out loud. George Colony, the CEO of Forrester, a research and advisory firm that has followed the company as closely as anyone, is taking a particularly dim view of Apple’s future. In a blog post that was guaranteed to spark a conversation, Colony says Apple’s days as a market leader are numbered; its “momentum will carry it for 24-48 months” and then, absent a “charismatic leader” in the Jobs mold, it will devolve from “being a great company to being a good company.”

Colony doesn’t get too specific about what this means, but we know. It’s not just about market cap, or stock price or any other shareholder metric. Colony is talking about that combination of imagination and execution pixie dust that has made Apple the most significant high-tech company of the moment, and one of the most important ever.

It’s a pretty big statement, especially since Apple is on fire: $6 billion earned on $40 billion in revenues in the most recent quarter, the iPhone selling as briskly in the rest of the world now as it did in the United States for years, 65 million iPads sold in two years, more cash than it knows what to do with, and at least one analyst speculating that it’ll be a $1,000 stock before long.

It’s also not the toughest bet to make, since high-tech companies, in particular, almost always glow hot for only so long, with rare exceptions – especially after the charismatic founder leaves or is kicked out. We’ve seen it at Sony, Polaroid, Disney and even Apple, Colony argues, when Jobs was kicked out in 1985.

But it’s a sucker’s bet. Here’s the easy counter: There is virtually no chance Apple doesn’t have tricks up its sleeve that were developed in the Jobs era. And it’s those tricks, of course, that got them this far. They have something everyone can see: a management team in CEO Tim Cook and designer Jony Ive, handpicked by Jobs more than a decade ago. Indeed, Cult of Mac editor Leander Kahney says Ive is all the proof you need to know that Colony has it wrong:

Apple’s design chief Sir Jonathan Ive – the man Steve Jobs once called his “spiritual partner” and the genius behind Apple’s iconic aesthetic and design language – is still working at Apple. More importantly, as Jobs bragged to his biographer, Jony Ive has just as much operational power at Apple as Tim Cook himself. Cook is only nominally Ive’s boss: In reality, thanks to Steve, they’re equals.

Apple’s demise will come not from a lack of inventiveness, but – if it comes as swiftly as Colony postulates at all – because someone else comes up with a game-changing something that nobody else, Apple very much included, saw coming. That’s the way giants are toppled: Personal desktop computers kill the mainframe, laptops marginalize desktops, tablets steal the PC’s thunder.

The real danger for Apple is that no company has a monopoly on the gift of thinking different. What’s more likely is that missteps for which Apple has been forgiven will be seen as failures rather than as forgivable works in progress by a mad genius. What would the tech press have made of the Apple TV hobby in the hands of anyone but Jobs? Without Jobs, how much leash would they have given Apple during the tortuous cloud timeline that began with .mac and sucked through three incarnations, until last year’s iCloud?

In fairness, this can be argued either way. This is the sort of bet that people easily take sides on, but for which there is insufficient empirical data to really know the outcome. Like two big-city mayors betting on their NFL teams in the Super Bowl, there is a rooting interest and a delightful salon game component.

And, yes, Apple will – someday – be a shadow of its former self. IBM is the classic high-tech survivor, but the number of times it has reinvented itself is head-spinning. Palm, which owned the personal assistant market until it was slow to see the futility of unconnected PIMs, is at the other end of that spectrum.

Colony’s mistake (if I may be so bold) is not in the fear factor, but in the time frame. I’d be shocked if Apple doesn’t have a five-year plan and sufficient institutional knowledge to plough that field – the absence of the serendipitous Mr. Jobs notwithstanding. The real danger begins in the following five years, as founders we haven’t heard of, working right now, come out with something different. Something Jobsian. What will Cook and Ive, who might have grown weary of Apple or each other by then, do in response?

But that’s years off. Until then, the over/under seems a pretty safe bet to me.

PHOTO: Carmen Shippy (L), the first person in line to buy the newly released Apple iPhone 4S at an Apple Store in Clarendon, Virginia, high-fives staff as she leaves the store, October 14, 2011. REUTERS/Jason Reed


We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see

What Mr. Abell is saying is that everything has a curve.

Posted by sfgla | Report as abusive

As the old saying goes, ‘Money & Power corrupt’ & ‘What Goes Up Must Come Down’. Apple is only a fad & cannot last forever.

Posted by GMavros | Report as abusive

The next breakthru vision Apple needs to embrace is the realization that everything done so far has left the user stranded at the portal of virtual world looking in. Apple needs to take users by the hand and lead them thru that portal between the 2d world and the virtual 3d world and give them tools that allow them to function in 3d world three dimensionally. You’ll then be “in” your phone. You’ll be “in” your pad. Most importantly of all, you’ll be “in” your puter, no longer stranded at the 2d portal forced to do everything in virtual world by reaching in and grabbing things to manipulate them.

Posted by politbureau | Report as abusive

I agree with the main premise that Apple will not fade in the near future, but “Personal desktop computers kill the mainframe”?!? The PC only brought computing into the home, but did it kill the mainframe? Mr. Abell needs to do a little research before writing such garbage.

Posted by wthcares | Report as abusive

Apple will fade when Microsoft starts integrating OS and tablets and phones. MS has several months until completion.
Apple’s only chance is to upgrade iOS to fully functional OS x, evolve OSx to something suitable to mobile and desktop users, and EVEN THEN chance of success depends if ever Apple can integrate with business infrastructure.

Posted by Ananke | Report as abusive

I have to agree with Mr.Colony. Apple has pretty much handled every tech market out there. Some claim TV is their next victom. But questions remain about margins selling a TV. After all Sony is slowly getting out of TV.
Who would have thought Sony moving from TV’s? No I look at several areas Apple has slowed in. First off Mac sales are off,second iPod sales are also off. Basically two of the products that gave a shot in the arm to Apple.
I also look at the saturation point of products like a iPad or a iPhone. Not everyone can afford one and not everyone can afford to keep upgrading. Also Apple has lost some of its advantage in both Tablets and especially phones. Other makers have more model choices and have built up their Application selections. Amazon has the Kindle Fire with many features of the iPad. Can Apple maintain its run? That’s asking a lot of any company and history proves its hard to do.

Posted by jscott418 | Report as abusive