Apple iPhone

This week my Palm Treo 650 died and I replaced it with an Apple iPhone. These first few days, I have to say I’m very impressed. It far surpasses the Treo 650 (which cost $499 compared to the iPhone’s $199).

Also, by coincidence, this week I read a 2007 Fast Company article about Apple titled “If he’s so smart…Steve Jobs, Apple, and the limits of innovation”. The gist of the article is that Apple is perhaps a bit TOO focused on innovation. No doubt, their products lead the way (Mac, Newton, iPod, iPhone) but they have tended to lose dominance in a market, soon after other companies enter it.  According to the article, the other companies are better at executing, better at quality control, better at reducing costs and making money.

Even if that’s true, I wouldn’t recommend to Apple to be less innovative, but rather to enhance their execution and management capabilities.  But this raises a perennial management question: is innovation somehow incompatible with effective execution?  For example, the quality control method, Six Sigma, is widely believed to be incompatible with innovation.

What concerns me about Apple is their strategy of controlling the complete product, the complete user experience.  Historically, companies that tried to retain such tight control have always lost out in the marketplace, to other companies that are more open to partnerships and distributed innovation.  In my book GROUP GENIUS, I describe how distributed “collaborative webs” are always more successful than single companies, and I give several examples of how the more closed, controlling company lost out–in spite of starting with a better technology or bigger market share.  I didn’t use this example in the book, but that’s how Wintel beat Apple over the last 20 years.

The Application Store on my new iPhone 3G is very exciting, exactly what Apple needs to do: to open up the iPhone to a bigger collaborative web of innovators and developers.  This will be the real story over the next year.