Moreover, you create real value by innovating and pushing the future forward, reaping the reward from that. Nintendo has similar strategies.
More insanely, Apple has a 90% share of the revenue for PCs costing more than $1,000. Although smaller than the market for PCs costing less than $1,000, that's still a huge market and Apple has cornered nearly all of the money in it.
And Apple can do it precisely because it's hard. If it was simply a matter of targeting the high end, everyone would be doing it.
Fighting for market share and making infinitesimal margins across a large market share is the relatively easy and obvious way to do things, and it involves relatively easy and obvious processes of copying/iteration.
Everybody is doing it, but their execution is abysmal. They're trying to go toe-to-toe with the leader in those segments without the business and development processes to support it. Apple has singularly focused their entire company on this problem and have the execution nailed. Motorola, Dell, etc. are distracted by the low-margin high volume part of their business and can't focus enough to get it right.
In the PC market Dell would love to go high-end, but they can't because Acer will ship the same machine, with plastic rather than carbon fibre, and sell it at 1/3 the price. Apple doesn't have that worry.
Dell probably would love to have Apple's revenue share, but they don't have Apple's requirements for style so would make a hash of it. Theirs would also end up being plastic instead of carbon fibre.
Technology is an echo-chamber. Step outside it and look at what other people have done, then learn from their success.
JCrew is clearly in a commodity market, but they're not exactly upscale. I'd consider them the $800 laptop. Not Walmart/Netbook, but certainly not expensive. And there are expensive clothing manufacturers, but there's a reason why Gap sells hundreds of millions in jeans, while $500 designer jean brands come and go like the wind.
You would think so, but while WalMart has proven that WalMart can do it in retailing, many other businesses have proven that they can't.
So in the end I agree that simply proving such-and-such is possible is not a recipe for any old company doing it.
Apple even pointed this strategy out in the original 2007 MWSF keynote where the iPhone was announced. They showed their math, pointed out the global annual sales volume of phones was almost 1 billion devices. They then said 1% of that would be a great starting point because that's still ten million phones out the door and it's a good place to carve out a high value niche.
The only innovation I can really find where they were truly leaders is the concept of the app store - which admittedly has been huge - but outside of that they sell an extremely well executed smart phone and tablet.
Aside from that, Nintendo's strategy is miles away from Apple's.
I am not trying to 'troll' anyone here, but I think if you look at the truly innovative business processes, technologies, and sheer inventions, Nokia as a company has Apple beat hands down over the last few years.
Yes, in some sense, building a better mouse trap is innovation, and no one can deny Apple's success as a company especially over Nokia's, but I would still strongly contend it has more to do with sheer execution and market positioning over sheer innovation.
What parts does one have to look at to see the innovation? I feel like I'm missing something obvious...
And that was just version 1.0 in 2007, which is still better than most Nokia phones today. Then they launched the App Store and the iPad.
I'm sure someone had a touch screen phone, somewhere, before the iPhone. But no one nailed all those little features of user experience. I'm sure the software/hardware for a consistent multitouch screen capable of being manufactured at scale was alone a very big deal.
Another interesting point about the Nintendo model, their approach is not only more innovative, but it's not cutting edge, and it's cheaper than the competition.
Four years later and Nintendo's been first to mass market with a 3D device and the central innovation for the wii 2/HD appears to be advanced haptics, something we've seen a number of Apple patent applications for. It will be interesting to see if Apple again catches the rest of the phone industry napping with their implementations of these technologies.