“The ability to learn faster than your competitors may be the only sustainable competitive advantage”
-- Arie De Geus
You've gotten away with it, and now its come back to haunt you. You didn't pay attention for the last 9 years as Apple put an incredible infrastructure of technologies in place. You listened to your IT managers who told you that it would be too hard, too much work and too expensive to bring Macs into the organization. You incorrectly assumed that because Apple has such a small market share overall that you would, at the critical time, understand everything you needed to understand to compete with Apple. You were wrong.
Pick a Market, any Market
So now you have an idea about a market you want to dominate. Let's look at some candidates. Apple, sometimes with the help of a partner, delivers these products and services to its customers:
Operating systems, desktop computers, notebook computers, backup storage, Wi-Fi base stations/routers, displays, keyboards, mice, smartphones, handheld computers, book readers (iPod touch), music players with cameras and video cameras, earbuds, Apple TV with HDMI, remote controls, ring tones, movies, TV shows, music, podcasts, news, games, voice and data services, office productivity software, professional and home video editing/management tools, professional and home photo editing/management tools, Nike Sports Kit, and AV cables. And maybe a tablet computer in 2010.
See anything there that looks appealing? To jump in at any place in the above list, you'll have to develop key technologies, both hardware and software, out market Apple, and fight for retail shelf space and/or Internet cred.
You've looked around and discovered that the trusty Windows XP you've forced on your employees for so many years doesn't contain the key technologies you need to compete. Even Windows 7 will merely be a product you pay for, but you'll be hard pressed to use it to develop competing technologies. Windows Mobile doesn't have the right stuff either. You find yourself being dragged into Google's Android OS, but you don't understand it fully and are not sure if it gives you a competitive advantage over Apple. Should you build your own mobile OS? Is it too late?
While you Were Sleeping
Meanwhile, Apple has become more vertically integrated. They build their own OS, their own computers, and they have PA Semi as a source for proprietary, low power systems that you'll pay through the nose for from other sources. Apple's iPhone has eaten up so much of the NAND Flash market, that your buyers tell you the waiting list is long, and prices are high.
Had you been paying attention to Apple, bringing Macs into your organization, developing expertise and in-house talent, you'd have a lot of very smart engineers to draw upon when it came time to develop competing technologies. A few of your brightest, who managed to get a Mac for their desktop, begged you to pay for attendance at WWDC. Being pound-wise but penny-foolish, you denied the request, stating "We are a Microsoft and PC organization." So they left you, started their own companies, and now -- at the critical time when you want to enter a highly competitive, emerging market for, say, tablet computers -- you have no where to turn.
Back in 2000, you got the idea that the Mac was a toy. It used AppleTalk. It had an aging, obsolete OS called Mac OX 9 that crashed a lot, didn't have enterprise support, and no professional level technologies like a kernel and memory protection. So you skated in the early part of this century, believing that Apple had nothing to offer your company. But you overlooked the incredible array of technologies, under Steve Jobs' supervision, that have been incrementally developed for the last nine years.
So you didn't nurture anyone in your organization who understood UNIX, hardware accelerated open GL/ES, OpenCL, Grand Central Dispatch, Cocoa and Cocoa touch, Bonjour, Bootcamp, Xcode, QuickTime and H.264, Core Image, Core Graphics, Core Data, Core Audio, Apple contributions to Webkit, Spotlight (derived from metadata file system), launchd, and Time Machine.
What Are Your Options?
But now you want to compete with Apple and haven't paid attention to what they've quietly achieved. As a result, you have no basis for understanding when and how Apple innovated, how they used their technologies to solve customer problems creatively, and what challenges you face when competing with Apple in any of the product areas listed above.
You're left with two choices:
- Build an inferior, compromised product that looks like Apple's but pales by comparison once journalists and customers get their hands on it. You'll quickly exit the market in disgrace.
- Spend a lot of time and money catching up, building alternative technologies, spiced with knowledge of what Apple has done, then apply your own creativity and innovation. The problem there is that Apple has nine year head start on you.
Apple leveraged itself into a company with US$38B in annual sales, $33B in the bank, and nearly 300 retails stores of which 221 are in the U.S. And those stores are jammed every day and all weekend. You ignored the fact that 100 percent of this enormously successful company's employees and almost 100 percent of its data center runs Mac OS X.
All this happened for the last nine years while you and your partner, Microsoft, lingered with Windows XP. You made snarky comments at power lunches about Apple going out of business and building toy computers for brain dead home users.
Even when your own son, who understood the issues, demanded a MacBook for college, you rationalized that there was no place in your company for even an R&D group to track Apple's developments. Your IT managers duped you into believing that you didn't need to use or understand the very best computers on the planet because they were too expensive. (In fact, they're very easy to maintain, so the advice you got was self-serving.) You figured that if you acquiesced, too many of your employees might want one. To put a halt to that, you hired consultants, and they all told you that Apple wasn't committed to the enterprise, so you signed a big check and carried on.
And now, you want to take on Apple. Your options are limited, your expertise insufficient, and your basis for innovation bankrupt.
Like Ebenezer Scrooge, however, it's not too late to change.