Abstract: This case study is about innovation at Apple Inc.

(Apple), one of the most valuable companies in the world in terms of market capitalization. Apple led the global technology market by developing innovative products such as the Mac, the iPod, the iPhone, and the iPad which redefined their respective markets. The case discusses Apple's approach to innovation which was driven by a passion for creating breakthrough products. Innovation was part of Apple's corporate DNA. Experts said that Apple was innovative because of its ability to iterate designs, devices, and functionality and create products that became a benchmark for customer experience.The case discusses Apple's founder Steve Jobs (Jobs) role as the chief innovator of the company. Jobs fostered a culture of secrecy at Apple and inspired employees to come out with pathbreaking products by thinking differently. According to experts, it was Jobs's vision of developing 'insanely great' products that had made Apple an icon of innovation. However, his death led to speculations whether Apple would continue to innovate and lead the industry. One of the biggest challenges facing Apple was to launch some groundbreaking products in the future and exceed customer expectations. This case is designed for MBA/MS level students, and is intended to be a part of their General Management/ Strategic Management curriculum.

Introduction:

Apple is a very disciplined company, and we have great processes. But that's not what it's about. Process makes you more efficient. But innovation comes from people meeting up in the hallways or calling each other at 10:30 at night with a new idea, or because they realized something that shoots holes in how we've been thinking about a problem.[...] And it comes from saying no to 1,000 things to make sure we don't get on the wrong track or try to do too much. We're always thinking about new markets we could enter, but it's only by saying no that you can concentrate on the things that are really important." -Steve Jobs, founder of Apple Inc

The iconic founder of technology major Apple Inc.(Apple), Steve Jobs (Jobs), passed away on October 5, 2011, aged 56. Jobs's demise led to speculations about the consequences for Apple and its ability to continue to innovate without him. Jobs was succeeded by Timothy Cook as CEO, but some analysts raised concerns about whether the company would thrive without Jobs's vision and flair for innovation. They were apprehensive whether Apple which was synonymous with innovation would continue to

break new ground without Jobs. According to Jason O. Gilbert, a technology reporter for The Huffington Post, "The biggest challenge for Apple is the one whose answer is difficult precisely because it is hard to define: How do you replace someone whose talents seemed to go beyond design and imagination to almost-ethereal, zeitgeist-y qualities? How do you hand over responsibility for maintaining an aura? For Apple, as for any company, that's a high bar, one it will likely fail to reach. Apple's coolest days are probably behind it." Background Note: Apple was founded by Steve Jobs, Stephen Gary Wozniak (Wozniak), and Ronald Gerald Wayne (Wayne) on April 1, 1976. Working at Jobs's garage they designed a personal computer (PC) that was sold as Apple I. The company was incorporated as Apple Computer, Inc. on January 3, 1977. Thereafter, the company grew by introducing many innovative and commercially successful products such as Apple II (1977) and Apple III (1980). Right from its inception, Apple had been a company committed to building great products using the latest technologies. The strong R&D focus that Jobs and Wozniak insisted on helped Apple to differentiate itself from its competitors. Apple products enjoyed wide recognition among end-users both for their attractive designs and their powerful applications in high-end computing in the education, multimedia, and entertainment industries. A large portion of this credit went to Jobs who had always seen himself as a product architect rather than as a businessman. Apple brought out a number of innovative products and innovative features in the early 1980s. In its early days, Apple's product development strategy focused on replacing existing products with new ones at regular intervals. For instance, Apple I was replaced by Apple II and then Apple II by Apple III. When Apple III failed in the market and there was an onslaught of competition, Jobs was compelled to create products that would differentiate them from the traditional low-end computing products.. Apples Approach to innovation: At Apple, innovation was a way of life and a part of its corporate DNA. Apple's success was attributed to its ability to develop innovative products. Over the years, the company launched some great products in the market which became the benchmark for customer experience. For five consecutive years (2006-2011), Apple was ranked number one on the worlds most innovative companies list compiled by BusinessWeek. Since its inception, Apple had focused on innovation and had ventured into those markets where it could make a significant contribution... Product innovation: Apple became the leading technology company in the world by creating cutting edge products. The company constantly innovated with its business model to respond to market needs and challenges and to deliver quality products and services. The technology

behemoth combined new technology with simplicity to come out with cool and simple products, experts said... Innovation in customer experience: Apple's innovation strategy was customer centric. The company designed new products around the needs of the user, not the demands of the technology. It came out with such products which created value for both the company and its customers. Apple products were such that consumers never really realized they needed just these until they were launched in the market. These products empowered customers through their high quality user experience... Innovation Leadership: Jobs was the chief innovator at Apple. Since rejoining Apple in 1996, he had focused heavily on innovation and he played an important role in the product development process. He ensured that new ideas were aligned with the company's vision. He emerged as the one of the most innovative business leaders in the world. Talking about Apple's struggle to innovate in the initial years, Jobs said, "You need a very product-oriented culture, even in a technology company. Lots of companies have tons of great engineers and smart people. But ultimately, there needs to be some gravitational force that pulls it all together. Otherwise, you can get great piecesof technology all floating around the universe. But it doesn't add up to much. That's what was missing at Apple for a while. There were bits and pieces of interesting things floating around, but not that gravitational pull."... Wheres Apple Headed: For the third quarter ended June 2011, Apple generated quarterly revenues of US$28.57 billion compared to US$15.70 billion in the corresponding period of the previous year. The company recorded a net profit of US$7.31 billion. International sales accounted for 62% of the quarter's revenue. On August 9, 2011, Apple briefly surpassed oil group Exxon Mobil Corporation to become the most valuable company in the world in terms of market capitalization... Exhibits: Exhibit I: Apple-Product Timeline Exhibit II: The Top 10 Most Innovative Companies: 2006-2010 Exhibit III: Apple's Game Changing Products Exhibit IV: ASCI Scores by Industry (Personal Computer) Exhibit V: Apple Selected Financial Data Exhibit VI: Apple Net Sales by Operating Segment and by Product Exhibit VII: Stock Price Chart of Apple

Issues: Study Apple's innovation strategy Analyze the key factors which have contributed to the creation of a unique culture focused on innovation and creativity at Apple. Evaluate the strategies adopted by Jobs to foster a culture of innovation at Apple Understand the relationship between culture and innovation Discuss and debate whether Apple can continue to innovate and stay ahead of the competition without its founder Steve Jobs Explore strategies that the company can follow to maintain its focus on innovation.