Apple’s Knack for Growth

| Editorial

Every company wants to grow in revenues and earnings, but not all succeed. Apple seems to have a knack for growing in any technology and any geography it touches. It's no accident.

One of the aspects of today's Apple Earnings Report is that Apple has a special knack for growing in markets and growing the popularity of its products. Not every company is able to do that. I believe it's because Apple is a very practical and feedback oriented.

By that I mean that Apple, first off, understands is customers. That's done no so much by self-serving, outsourced, delusional market surveys as listening to its own younger employees who are in touch with the youth culture. I have seen this myself as an Apple employee. So when Apple puts a video camera and an FM radio in an iPod nano, it's not just featuritis, it's a fundamental recognition of the ways in which young people communicate and entertain themselves.

Secondly, Apple pays very close attention to initial sales results and doesn't let poor performance linger. Issues that may come up with a different culture or language are attended to immediately, and any Apple executive on foreign soil who doesn't instantly fix sales problems is replaced. Quickly.

Finally, Apple's products are designed in such a way that the joy factor generates word of mouth marketing for Apple. Because Apple pays so much attention to industrial design, simplicity and the "just works" design, customers love to tell their friends. After all, there are so many other frustrating products, poorly conceived and implemented, that it's no wonder Apple's customers vent their frustrations by focusing on what does work. And using social media to spread the word.

As a result of these factors, Apple is able to grow its revenues in just about any market it enters. That bodes well for the iSlate/iTablet/iPad. Those who believe that the Apple tablet will fail typically base their opinion on the functioning of the product and how it fits in with their own particular needs and preconceptions. However, understanding Apple's knack for growth, described above, is what's really relevant.

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1 Comments

gslusher

Thanks, John—nicely done. One interesting note from the earnings conference call was that 58% of Apple’s revenues came from outside the US. They usually don’t give sales per country, but did mention that sales were well up in France, Spain, and Italy. Another point of interest to me was the capital investment planned for 2010. I can’t remember the exact number, but it was well over $1B and only a minor part was for retail stores. The rest was for facilities (the new campus in Cupertino?), infrastructure (servers?) and manufacturing. (Does Apple help suppliers with their capital investments?)

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