With its enormous success has come an enormous pile of cash: over the last few years Apple has accumulated a monumental cash hoard of more than $58 billion. The company has been making modest acquisitions over the last few years, but sooner or later it will have to either spend the money in the form of some blockbuster acquisitions, or return it the cash to its shareholders in the form of dividends. So how should Apple spend its money?
The first order of business is to identify what we call a “strategic framework,” a way to think about Apple and the markets in which it competes that may offer some insight into the company’s future.
The company depends for its success on the integration of all of these elements into a functional device + network + content creation + content delivery system to create an effective market system for its brand. Some of these are markets that it has influence on, some that it controls, and some for which relies on partners. Each has unique characteristics, and factors and attributes that could make it highly appealing or less attractive.
There’s also another vantage point we can also use to explore Apple’s options, not by looking at the ecosystem of providers, but at customer groups.
Having defined the global smart phone standard, Apple’s brand identity is now closely tied to its mobile users, who are generally individuals and families. Its brand is also linked with the e-distribution model of iTunes and Apps, and in the home market, the emerging competition with Netflix and the other streaming video services.
But Apple is weaker in the business market, where Microsoft built its wealth-building global franchise as the operating system and software suite of choice for corporate IT departments, which locked the company in for the past 2 decades. What would it take for Apple to make strong progress in the business market?
If you’re interested in innovation strategy, you know that it’s not wise to bet on a single strategy, and you know that the diversification of the company from its core computer market into entertainment devices and communications devices, and the markets that support them, has been a key element of its growth and success.
So what would I do if I were the CEO? In this article we’ll look at each of the four markets, and at the various customer grouping, and venture some speculation about which may hold the greatest interest for the company, and why.
By Langdon Morris
Langdon Morris is a co-founder of InnovationLabs LLC, one of the world’s leading innovation consultancies.
Langdon is also a Contributing Editor and Writer of Innovation Management, Associate Editor of the International Journal of Innovation Science, a member of the Scientific Committee of Business Digest, Paris, and Editor of the Aerospace Technology Working Group Innovation Series.
He is author, co-author, or editor of eight books on innovation and strategy, and a frequent speaker at innovation conferences worldwide. He has lectured at universities on 4 continents.