Apples and Oranges

Last Wednesday Apple became the most valuable technology company, as measured by its stock market capitalization (AAPL), on the planet. Investors value the i everything maker more than IBM, Microsoft, or Hewlett-Packard. It’s easy to see why; when was the last time you got really excited about a new laptop or server? And do you even care about the operating system running them? No, probably no, and Apple knows it.

Comparing Apple to other global technology companies is, to use a gem of a cliché, like comparing apples to oranges.

Apples see the world as a place full of individual consumers who require simple yet powerful products to serve their needs. It may be communication, entertainment, or business but Apple’s products (iPhones, iPads, iPods, iMacs) share a similar look and feel as well as many applications. Just like there are different shampoos that can do a decent job of washing your hair or different sneakers that can protect your feet but fill those needs in slightly different ways, the apples look at their products as consumer based.

The term “Consumer Products” is used to categorize companies offering a vast portfolio of products under a common name (Proctor & Gamble, 3M, Johnson & Johnson). It’s a bit of a contradiction but when you think about your product based on the needs of the individual consumer you more than likely will produce something many people will like.

Oranges, on the other hand, look to serve specific needs of general customers. They offer ‘scalable solutions’ for ‘increased performance’ and ‘greater capacity’. All good things I’m sure but they often fail to identify how they’ll fix a specific problem or help take advantage of an opportunity that users can identify with. For example trying to run a report on last month’s expenses (by the way there’s an App for that).

Oranges continually back themselves into competitive corners by trying to isolate and dominate specific customer markets or niches using products that can quickly be commoditized. It’s cool that a printer can do double sided color high resolution printing very fast but if I wait a month or two there will be a knock off at half the price. Who’s come up with a computer easier to use than a Mac? Please let me know where I can get a music player that’s cheaper, easier to use, and with more legally available content than an iPod and I’ll buy it.

Apple’s new dominance signals more than just Wall Street affirmation. It signals a move away from the needs of businesses pushing the edge of technology to the needs of consumers. This shift means trouble for companies like Microsoft and Dell who rely on high volumes from businesses to compensate for low margins. Google may have a dog in the fight but so far they haven’t produced a significant ‘total solution’ – one piece of technology as a product. You need to buy a phone from another company to get the Android operating system or by a computer to make use of Google’s applications.

Again, Apple beats the competition. I may have to find a service provider for the iPhone but the product comes from one company. If I buy a Mac, one company supports my hardware and my operating system.

Apple won’t remain the dominant technology company for long, no single organization can. What Apple’s resurgence means to us is that the click of the keyboard and the drag of the mouse have their days numbered. Simplification, miniaturization, and customization are quickly replacing the complex, bulky, and commoditized. Good.

Later.