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Design Thinking and Innovation at Apple Inc

The following presentation is based on a case on Apple Inc about how Apple goes about implementing innovation and design thinking at their firm, and how there's a shift with the arrival of Tim Cook. The case was a part of our course called BusinessInnovation in New Environment (BINE)

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Design Thinking and Innovation at Apple Inc

  1. 1. Design Thinking And Innovation At Apple Inc. Presented by, G R O U P 6
  2. 2. Some Facts about Apple…….. By 2012, Apple revolutionized the computer, music, mobile and retail industries through it’s sleek products, innovative stores and new business models. On March 15, 2012- Apple’s share prices reached US$600 for the first time in it’s history even when the world economies were struggling to recover from the worst recession since the Great Depression. With market capitalization of about US$550 billion and annual sales exceeding US$100 billion, Apple was worth nearly three times the industrial giant General Electric, exceeded value of Sony Corporation by a factor of 25 and became the most valuable publicly traded company in the world. When Steve Jobs returned to Apple, it’s share price had hovered around $5 with an uncertain future.
  3. 3. Catalysts of Apple’s Success………….. 1. The new device was same as the old one; different, but same. 2. Apple’s Radical Innovations also came with a high level of consistency. 3. Apple did not solely rely upon clever strategic moves or innate sense of market timing, but lay deep commitment to understanding people i.e. their market. 4. Apple kept it’s eyes on the core computer business. 5. Even through difficult times, the core commitment to product design and development stayed alive. Commitment Consistent Innovation Essence
  4. 4. Attitude adopted by Apple…..  Design Thinking  Simplicity in Design and Use : People’s perspective and needs followed by product designing [technically]  The minutest of details do not matter as much their aggregation does. But at the same time those trivial details can’t be overlooked eg: Packaging.  Discover what we can live without and what can be developed elsewhere. Eg: Elimination of slots for inserting diskettes.  Adapting to its own technology and building upon it (Incremental Innovation) Eg: iPod Mini – first ever to come in colors.  Not just Fashion. Their designing went from inside to the outside.  Problems were taken as moving targets.
  5. 5. Innovation approach  It followed principle of “Simple is sophisticated“  Smallest details were looked after  Platform strategy  Iterative customer involvement  Beautiful products
  6. 6. Was there a systematic approach???
  7. 7. Well…. YEAHH!!
  8. 8. A systematic approach...  Highly systematic and calculated approach, particularly in the products manufacturing process.  Design team at apple plays a crucial role coming up with innovative ideas to the way products are designed.  Very specific needs of the customers are targeted through the strategic innovation approach.  Strong emphasis on innovation in production and customer care and quick response to customers’ feelings about the products.
  9. 9. Can it be imitated ?  Although numerous firms have been trying to imitate Apple’s innovative approaches, it has proved a headache to them.  Dynamic and flexible innovative approaches are utilized keeping in mind minute level details regarding customer specification and needs.  Imitation of the company innovative strategies is also curtailed because it operates on strong patents.  Furthermore, the company innovation is multifaceted, and does not incline on just a single area of manufacturing.
  10. 10. Seems like NO !!!  All these features make it extremely hard for imitators to mimic Apple’s approaches to innovation.  Even if they do, the company discovers yet another innovation strategy immediately, thanks to the technical and design team at apple.
  11. 11. •Empathy for customers/users •Aggressiveness/Achievement •Positive Social Contribution •Innovation/Vision •Individual Performance Values that Apple management integrates •Team Spirit •Quality/Excellence •Individual Reward •Good Management •Research driven strategy •Palpating market
  12. 12. • Change in selection and implementation of new projects. • Better innovation capabilities. • Focusing on minutest of details. • Increased focus on quality. • Better market evaluation before product development. Changes in the business approach due to integration of Apple’s management:
  13. 13. Factors which it affects • Intended Market •Sales and Distribution Activity •Improved Customer Relations •Product/Service • Increased Technology competency • Better IP protection • Manufacturing and service delivery system How Apple’s Management affects Risk Reward Framework for Assessing and Selecting Innovation Projects?
  14. 14. • Value Culture of Apple • Cost Culture of Apple • Resistance by the employees • Aversion to acquisitions and mergers • Unconventional and bold risk taking • Simplification and elimination method of design Obstacles Encountered
  15. 15. How far has Apple come under Tim Cook
  16. 16. A bit about Tim Cook  Joined Apple as SVP of Worldwide Operations in March 1998  Served as EVP of Worldwide Sales and Operations  Was COO until he was named as CEO of Apple Inc. on 24th August, 2011  Also serves on the Board of directors of Nike Inc. and the National Football Foundation
  17. 17. What Cook brought to the table  He let go of the people with disagreeable personalities, whom even Jobs tolerated earlier as he focused on building harmonious culture, against the common notion that "Apple's ability to innovate came from tension and disagreement.“  He believed in having the company’s views to be sustainability and climate change  Although the openness to outer world increased a little bit under Cook, the tradition of maintaining the secrecy still continued.  He helped strengthening the supply chain of the company
  18. 18.  He personally catered to the issues brimming at the time  Further he made the Apple’s presence felt in the Capitol Hill as well as the Wall Street, both of which were earlier kept at bay under Jobs  Under his reign, Apple Inc. has launched several new products like iCloud Apple EarPods, OSX and the recent ones, the iPhone 6S and 6S Plus and the iPad Pro, that stand way ahead of its competitors.
  19. 19. Launch of iPad Mini and iPhone 5C  With the increasing demand for smaller tablets Apple Inc launched its iPad Mini series to compete for this growing segment, following in steps of Samsung Galaxy Tab.  Medium Range Budget phones market capture. Apple launched its first low price phone series iPhone 5c targeting the booming medium and low budget smartphones segment.
  20. 20. Google Play effect  Based on App Annie data, Google Play has over 1.4 million available apps, compared to just over 1.2 million for Apple’s App Store. It exceeded Apple’s digital store in download volume.  Google play can install apps directly from the web.  Developer Friendly: Can change their metadata at anytime. Also update more freely and quickly.
  21. 21. XIAOMI, HUAWEI : New challengers..  Apple CEO Tim Cook has said time and again that China is an extremely important market for his company.  However, China is a special situation because Apple is competing against strong domestic mobile device manufacturers. Chinese consumers are particularly enthralled with one of Apple's top competitors in that space: Xiaomi.  Xiaomi's mobile device market share was soaring and its unit shipments skyrocketing. If Apple wants to compete more effectively in China, it'll need to handle the Xiaomi issue and start to steal market share.
  22. 22. The recent showstoppers  Capacity- 16, 64 and 128 GB  4.7” (6S) and 5.5” (6S Plus) Retina HD  A9 chip with 64 bit architecture and embedded M9 motion coprocessor  12 MP iSight Camera  Video recording for 4k videos iPhone 6S and 6S Plus (Major features)  5 MP FaceTime HD Camera  Touch ID  FaceTime video and audio calling  iOS 9
  23. 23.  Touch ID  Apple Pay  Assisted GPS  Digital Compass iPad Pro  Smart Connector for connecting with keyboard  12.9” Retina Display  A9X chip with 64 bit architecture and M9 motion coprocessor  8 MP iSight Camera  1080p HD video recording  1.2 MP FaceTime Camera
  24. 24. Think Different.