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Lessons from Apple

Jun 7th 2007

From The Economist print edition

What other companies can learn from California’s master of innovation

apple-new-logo-lg1FOR a company that looked doomed a decade ago, it has been quite a comeback. Today Apple is literally an iconic company. Look at your iPod: the company name appears only in the small print. Some of the power of its brand comes from the extraordinary story of a computer company rescued from nearcollapse by its co-founder, Steve Jobs, who returned to Apple in 1997 after years of exile, reinvented it as a consumer-electronics firm and is now taking it into the billion-unit-a-year mobile-phone industry (see article). But mostly Apple’s zest comes from its reputation for inventiveness. In polls of the world’s most innovative firms it consistently ranks first. From its first computer in 1977 to the mouse-driven Macintosh in 1984, the iPod music-player in 2001 and now the iPhone, which goes on sale in America this month, Apple has prospered by keeping just ahead of the times.

The company, which is shortly to join the S&P 100 index of leading companies, is not without its critics. The not-always-lovable Mr Jobs is still stuck in a greedy-looking share-option “backdating” scandal. The firm has come under attack for refusing to make its operating-system and music-protection software available to others (a price worth paying, Apple responds, for greater reliability and consistency). And there are grumbles about manufacturing defects and customer service. Apple is hardly alone in the high-tech industry when it comes to duff gadgets and unhelpful call centres, but in other respects it is highly unusual. In particular, it inspires an almost religious fervour among its customers. That is no doubt helped by the fact that its corporate biography is so closely bound up with the mercurial Mr Jobs, a rare showman in his industry. Yet for all its flaws and quirks, Apple has at least four important wider lessons to teach other companies.

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