Although we have been discussing many intriguing topics in class, ranging from Enron to Nike, I found the Apple topic the most interesting. Perhaps it has to do with my loyalty to the brand, or with the mystique surrounding the unveiling of new products, but I was immediately drawn to this blog post that focuses on Apple’s lack of innovation. Unlike so many articles that applaud Apple for its innovation and success, it was almost refreshing to read about another view.
Prior to reading this blog post, I was unaware that Android phones have 4 times as much of the smart-phone market share as the Apple iPhone does. This year, iPhone market share actually fell from 19% to 17%. Even though Apple does not have as much market share, their profit margins (at 38-42%) are considerably higher than competitors like Samsung. The author of the blog post I found suggested that the reason Apple is still able to enjoy such large profit margins because they are able to get away with essentially re-releasing the same phone every couple of years and to sell them at a premium. It took me a couple of seconds to really think about this and realize that, yes, those sneaky little weasels have been getting away with making minor tweaks to products and calling them “new!”, “innovative!”, “must-have!”.
It really is odd that Apple does not utilize the economic concept of “planned obsolescence”. With such a loyal customer base, maybe they don’t need to. Even if they are just making minor changes to their products, how can this be creating any more of a “me-too” product than those companies that make a living off of trying to anticipate Apple’s next move and then to copy them first? In terms of the smartphone industry, Apple may be intentionally holding it back. They spend less money on research and design than their competitors, which probably means that they could be much more innovative if they wanted to. I think that Apple stands in a precarious position- do they have a responsibility as a successful corporation to be more innovative? To give back to the community more? To drop the price of the iPhone? To give back more to shareholders?