The next 2 decades of Apple

Jeff Gardner
Nov 14, 2018 · 6 min read

This is taken from something I wrote during the excellent AltMBA last year. I’d love to know what you think in the comments below.

What separates the companies worth billions from the companies that fail? Luck certainly plays a part but you’d be hard pressed to find anyone that would posit that luck is the only variable. Is it talent? Leadership? Yes, to both. But that’s not all. Great companies align themselves around a common goal. Great companies have a coherent strategy. Great companies subjugate everything else in service to that strategy.

But where does good strategy come from? And what distinguishes good strategy from poor strategy? The excellent book Good Strategy/Bad Strategy asserts that good strategy comes from three core principles:

  1. A diagnosis that explains the challenge
  2. A guiding policy for dealing with the challenge
  3. A set of coherent actions which are designed to carry out the action

So it follows that the best companies are the ones in which leaders are able to accurately identify the opportunity, convey the meaning and the weight of that opportunity to every level of the company, and then mobilize the full power of their assets through a guiding policy that coordinates the actions of every person in the company.

Strategy is the confluence of the stories that we tell ourselves, the assets that we can bring to bear, and the self-imposed boundaries we place on ourselves based on our values. So, let’s have a closer look at how one possible future plays out within the confines of perhaps the most famous and well known company in the world right now, Apple.

NB: I’ve never worked at Apple so some/much of this is bound to be inaccurate.

  • $285+ billion dollars in cash!
  • One of the most recognizable brands in the world
  • Brand clout (negotiation skills to enter any market they want)
  • Strong cadre of evangelist customers
  • Design capabilities
  • Hardware engineering capabilities
  • Software design capabilities (are you seeing a pattern yet?)
  • Cloud computing infrastructure
  • Tight vertical integration of hardware, software, and services
  • Tightly coupled distribution channels (App store, iTunes store, etc.)
  • We demand the highest degree of control over every aspect of our user experience
  • We won’t put out anything that’s not the epitome of good taste and adheres to our design discipline
  • We focus on the user experience for the masses rather than customization for the few
  • We won’t compete on price
  • We respect the privacy of our users
  • We have better taste than anyone else
  • Our customers are discerning people with good taste.
  • Integrated software and hardware results in a better user experience
  • We don’t have to play by the status quo. We build and structure things our way.
  • We don’t settle for anything less than excellence
  • We’re unique
  • We say No to many more things than we say Yes to
  • We were founded by Steve Jobs for christ’s sake

The way forward

So, you happen to find yourself sitting on $285 billion in cash. A dominant brand name. Many thousands of dedicated employees with deep expertise in design, engineering, supply chain logistics, and a penchant for secrecy. What should you do?

Defining the strategy of an organization is terribly risky, terribly scary business. It requires you to choose one path and eschew all others. There is no “right” answer. No way to earn an A, at least not in the traditional or immediate sense. Strategies sometimes take decades to play out and either vindicate or victimize their creators.

At its heart, Apple is a consumer company. They create products for the mass market and they have made a long term bet on the fact that the mass market does appreciate and care about well designed and carefully crafted objects. And, by extension, that the mass market will pay a premium for those objects. So where does Apple go now. They have dominated the profit share of the personal device market for the last 2 decades. They have brought luxury good pricing and marketing to mass market unit volumes and they’ve been paid handsomely for it. Is there anywhere for them to go from here? What is another item that many, if not most, of the first world uses and depends on on a daily basis? Is there an item that requires tight integration of hardware and software? Of course there is, but it doesn’t fit in your pocket. The average American spends just over 100 minutes in a car each day. That’s a little over 7% of the day! What’s more, we’re completely captive audiences during that time. Cars are Apple’s future.

Imagine for a second the following scene. You say goodbye to your kids, kiss your partner, and head out the door. You don’t carry keys since the watch on your wrist and the phone in your pocket sense your intention and unlock the car door when you’re still ten feet away. As the door opens, the electric motor powers up the car. By the time you’re seated the driver’s seat has already adjusted to your preferred position and, since it’s cold out today, is already warming up.

“Siri, take me to work please”, you say casually.

Siri acknowledges your request and begins to reverse out of the driveway. You pull the newspaper from your bag and pick up where you left off at breakfast. A few minutes later you’ve finished the article and you put the newspaper back in your bag. Glancing up you notice that you’re about to get on the freeway.

“Siri, what’s on the news?”, you lean back and close your eyes.

Siri begins playing news reports from your predetermined news outlets, interspersing it with updates from family members, social news, and other sources. Once you’ve caught up you take your iPad from your bag and set it up on the small desk in front of you. Without the need for a steering wheel there’s plenty of space for the small device and attached keyboard. You spend the remaining 25 minutes of your commute answering emails and preparing for your first meetings of the day.

As you step out of the car directly in front of your office you ask Siri to come back for you at 6 that evening. The door softly closes, more pulled than pushed, and the car pulls away.

While this scene may seem futuristic to you, Apple already possesses all the technology to pull it off. They have a highly refined system of designing and engineering complex machines. They have strong relationships with key manufacturing partners. They can build the software, they can update that software over the air, and they can use the devices that you already carry with you everywhere to integrate the user experience into a single, seamless whole. They even have the cash to cover any “incidentals”.

The Apple of late has lost some of its brilliance. Some of its irreverence. They have grown comfortable milking their cash cows and aren’t pushing themselves. The next evolution of Apple needs to be inspiring. It needs to shock. It needs to force us all to level up our expectations. It needs to have a clarity of purpose that can only come from good strategy backed by coordinated action.

Data Driven Investor

from confusion to clarity, not insanity

Jeff Gardner

Written by

American living in Italy. Head of Platform Partnerships @intercom. Musing on the outdoors, technology, and lifelong learning.

Data Driven Investor

from confusion to clarity, not insanity

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