The situation at Apple is emblematic of the broader media and consumer technology segment in some ways. In other ways, the rest of the sector population could only wish that Apple were emblematic of it. The second comment alludes to Apple’s stellar earnings report, handily beating all expectations. Any company, in any industry, would wish to be like Apple at such a time. The first comment, on the other hand, refers to a different reference point, one having to do with the descent of invention and ascent of execution in the ranks of relative visibility – and relative value – for both Apple and the industry it leads.
Coming out of a 10-15 year stretch during which Apple, and consumer media more broadly, gave rise to a string of innovations that is unprecedented, such a run will be difficult to sustain. For Apple, the list includes iTunes, the iPod, the iPhone, the iPad, Apple TV, and the App Store – all of these segment-redefining in greater or lesser degrees. For the Internet, the list includes Google, Facebook, Twitter, now Groupon, and Apple. While we can’t go so far as to claim that popular media innovation has reached its absolute limit, a case can be made that probability at this point favors incremental adjustments – a steady progression of enhancement – rather than revolution and the breaking out of brand new systems. There are only so many times that telecommunications, consumer devices, and popular entertainment can be torn down and recreated in the span of a generation or two, let alone 10-15 years.
Still, while the social network can no longer be invented, it can be perfected. Digital communication exists, but can be improved. Digital advertising is everywhere, but has a very long way to go. And online commerce is only beginning to test out possibilities, despite having been around since Amazon and eBay. As Apple has just demonstrated, substantial growth can be realized even if only one novelty – and really just a giant iPod Touch at that – is introduced in the course of a year. Growth is now likelier to happen on the heels of execution, successful competition, and tight management.
With all this by way of background, the Apple news that everyone has been thinking about these past couple of days can be taken in context: The unfortunate departure (hopefully temporary, if not brief) of Steve Jobs from his regular position. While this is truly sad for Mr. Jobs, it is not catastrophic for Apple, and the stock market seems to agree. It is to Mr. Jobs’s credit, in fact, that he has succeeded to implement a system, a set of values, and a brand, that necessitate his presence less and less to preserve at Apple. Given the more probably evolutionary than revolutionary changes in the industry ahead, a well oiled machine with emphasis on operations will fare quite well. Competitors, entrepreneurs, innovators, investors, should take note, as Apple once again leads the way into what will undoubtedly be a lasting trend: To grow by execution.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.