Why was Apple able to get its tablet to market before everyone else? And why were they able to reap so much profit from it?
As much as we’d all like to see more innovation and invention in the cable industry, who’s going to pay for it?
Research and development is expensive. The way that a successful company makes money is by taking a business model that works and rejigging it into a variety of different forms in order to maximize revenue – and minimize costs.
When it first came out, it was common to hear people complain that Apple’s phenomenally successful iPad was nothing more than an oversized iPhone.
But that was exactly the point.
They took what they knew already worked and changed it into a slightly different form thereby opening an entire new market.
That they didn’t reinvent the wheel allowed them to bring a mass-market tablet device to market long before every other major tech company while simultaneously minimizing research, development and design costs.
As happy as I was to see the debate and discussion that arose from this week’s Minivan post, I think it important to reel in the discussion and ask people to consider ways to innovate and reinvent the technology that doesn’t involve mass engineering changes. Remember: The train has barely changed in the last 100 years, so why then should the gondola?
As it stands currently, the industry has little incentive to innovate. People are buying their products and their products are even being used sans innovation in mass urban transit applications – despite the fact that some still don’t believe ski lifts are appropriate in cities.
What then is the motivation for innovation, invention and change?
That’s not to say that the industry shouldn’t. Instead it’s to ask: Why would they bother?
6 Comments
There’s massive incentive to innovate: the completely wide open market of urban transit. It doesn’t matter how much business you currently have, having more business is better.
Did you just claim that trains have barely changed in the past 100 years? The diesel electric was a hybrid well before hybrid cars were invented. NYC’s subway looks much the same as it did 100 years ago, but streetcars now have low floors for easy entry, automatic salting for tracks, switch heaters, GPS, automated announcement, signal priority, automated payment… And that’s just streetcars – let’s not even go into maglevs or other bullet trains.
But this is all in a technology that hasn’t shifted in it’s use in 100 years. They’re still pulling people around city streets or freight across the country. Gondolas are moving into an entirely new market that is completely different. The industry is just lucky that most of the features don’t need to be changed at all and most of the technology can still be used.
I agree that “having more business is better” but you’re make an assumption:
Innovation = More Business
Also:
More Business = More Profit
Both those assumptions are the desired outcome of innovation, but there’s no guarantee of either. Remember: The urban market is a small fraction of the cable manufacturer’s business (less than 20%). That makes it difficult to see how innovation tailored specifically to the urban market could pan out profitably.
I’m not disagreeing with you, I’m simply saying that the decision to spend millions of dollars on new innovations for the urban market is about risk analysis. Will those millions pay off? Or will they basically be flushed down the toilet?
Looking at the current market share is not useful. The market share for anything was small before it was big. If you can’t see past today then tomorrow you’ll be stuck in yesterday. Or something.
I thought what we were doing here is imagining gondolas as a potential future mass transit technology. If a gondola manufacturer can tap into that market sucessfully, then they might well turn that 20% number into 80% – or higher. There are many more people in cities than on mountaintops.
I absolutely equate innovation with more business. Tapping into a new large market either requires innovation or dumb luck. And you can’t assume your competitor will rely on dumb luck.
I totally agree with what you’re saying, Matt. I also think it important, however, to pay attention to the business case behind the innovation.
Right now I think the industry is caught in a classic “disruptive technology” trap. They’re currently only listening to their core customers (ski resorts) because that’s where most of their money is coming from. Problem is, no one’s listening to the needs of the urban market.
There’s a huge opportunity here for an upstart to say “you know what, forget the ski resort market, we’re only going to focus on the urban market.” If the industry doesn’t spot that potential issue, they could be faced with some serious headaches soon.
“Why was Apple able to get its tablet to market before everyone else? And why were they able to reap so much profit from it?”
I once read an article about Apple being excellent in inventing new needs.
Invent needs!
I like the simplicity behind this statement. And yes: there were mobile phones before and yes: there were mp3 players and tablets before. But somehow they manage to do something very right, at a right moment.
Well, right now I’d say they’ve got a very difficult position, though Apple is still outstanding, it will become difficult to reinvent something new. But we will see soon what else we need.
I for instance really much like the idea about this one: http://www.youtube.com/watch?v=mRcx1rxTLG8&feature=player_embedded
Since we have got too many gadgets and devices it is time to combine it. I don’t speak I only speak for myself when I say having a notebook, having a desktop computer and having a computer at work is a bit too much. Keeping all files together and scripts and plans up-to-date at all devices (sometimes even on your smartphone and/or ipad) – it becomes confusing. So we need working solutions to scale it down again.
Honestly though in the end it is not really about what we need – it is about what we want. 😉
About new design:
Have a look here:
http://www.youtube.com/watch?v=0Bhpk_BlnCM
(it is with German language, but look at 5:30 ! )
But a cable propelled new transportation system must be BETTER than other transportation systems.
You are going to the station, you have no waiting time, you get into the gondola and drive away. That’s the greatest advantage. Time is money.