number of customers
Since the birth of the iPhone in 2007, Apple has been annually releasing new iPhone models and iOS updates. Successive versions have been getting better and, more importantly, diffusing among a growing number of customers. Despite the sale of 2.2 billion by the end of 2018, the sale of the first phone released in June 2007 came down to virtually zero before enjoying the first birthday. To give 2nd life, Apple released iPhone 3G on July 11, 2018. Contrary to the sale of 6.1 million of the first release, the 2nd generation succeeded in diffusing 15 million customers. Since then, successive versions are being sold to a growing number of customers (Fig. 1), leading to the sale of 100 million units of iPhone 12 within the release of seven months. Such a reality resembles iPhone evolution and diffusion as a seasonal crop.
Where is the source of such an idea flow? Is Steve’s magical power good enough? It demands systematic ideation for ferreting out value from the market. Hence, as opposed to just raw creativity, the focus should be on idea management— a core competence of Steve Jobs to show magical performance.
Birth of iPhone for Reinvention of iPod out of Self-destruction
Upon his return to Apple, Steve Jobs got the job of surviving Apple from being bankrupt. One of his flagship ideas was to reinvent MP3 players in this mission, giving birth to iPod. Yes, this portable music player started generating much-needed cash to survive Apple. By the start of 2007, Steve’s this baby was responsible for 48 percent of all of Apple’s revenue. Well before reaching this success, Steve hatched a plan to kill iPod. Within three years of the birth of this remarkable Innovation, in response to a request in 2004 from CEO Steve Jobs, Apple approved a project: the highly confidential “Project Purple.”
Upon projecting the evolution of the smartphone, posing its impending threat of invasion to make the iPod redundant, Steve pursued this self-destruction project. It was the project to kill the iPod for recreating or reinventing it as iPhone. Subsequently, Apple unveiled iPhone in 2007. Since then, Apple has been releasing successive better versions at regular intervals turning iPhone evolution and diffusion into a seasonal crop.
iPhone Evolution and Diffusion—barriers
Irrespective of the greatness of the idea, every innovation faces barriers. Despite its magical performance, iPhone has also been facing such obstacles. For example, at its debut in 2007, virtually all target customers were using alternative devices like RM’s Blackberry, Palm Trio, or smartphones of Nokia. Furthermore, slow mobile internet speed was also limiting the value of the iPhone’s large screen in browsing the internet and enjoying videos. Moreover, not everyone perceives the same value in each innovation. With the given features and individuals’ choices, only a tiny group of people showed a willingness to pay higher than the price Apple was charging for iPhone.
Furthermore, once an innovation shows profitable business opportunities, competition responds. Some of them release copies and also imitations. Others improve their existing products to counter the attractiveness of newly arrived innovation. iPhone also faced such a reality. For example, Google released Android OS to facilitate the innovation of mobile handsets having iPhone-like features. Among others, Samsung took advantage of it. Samsung started designing its mobile handsets and releasing better versions having multitouch user interfaces.
On the other hand, Nokia became desperate to upgrade its smartphone products lines. Similarly, Research in Motion and many others also accelerated their product upgrades. All these and many other factors became significant barriers to iPhone diffusion.
iPhone Evolution and Diffusion—favorable forces
In addition to facing a number of barriers, iPhone also met a few favorable forces. It began with the growing mobile internet speed. Due to increasing higher speed and decreasing cost for mobile data, users started experiencing multitouch-based user interface increasingly helpful. Furthermore, the 3rd part application developers commenced pouring applications at Apple’s App stores. Besides, social networking applications began creating addictive associations, particularly among teens, making iPhone-like smartphone features indispensable. Furthermore, digital content developers ramped up video and audio content to be streamed over the mobile network. These four essential externality factors contributed to the growing popularity of the iPhone’s features like a large screen and multitouch-based user interfaces, including direct manipulation, pinch, rotate, flick and zooming.
To support the growing consumption of real-time video and audio content and the use of computationally intensive applications, Apple faced the pressure of updating the iOS and the underlying processor. Fortunately, Apple found growing chip density, due to the advancement of silicon processing technology, as a strong enabling factor for producing A-series chips. Notably, the race of Samsung and Taiwan Semiconductor Manufacturing Company (TSMC) in decreasing the Transistor dimension, reaching 5nm process technology for Apple A15 bionic chip, became a favorable solid factor. In addition to supporting growing computation power, decreasing dimension has been critical for reducing the power requirement. This progression has led to the A-15 being built on a 5-nanometer manufacturing process with 15 billion transistors for supporting a 16-core Neural Engine capable of 15.8 trillion operations per second.
Suppliers have a great favorable force for iPhone’s Evolution and Diffusion
Apple’s component suppliers have been playing a significant role in its mission of releasing successive better versions. Sony’s image sensor and Largan’s aspherical plastic microlens have been crucial for improving the vital camera module in the successive versions. Besides, Japan Display and Sony’s contribution in keep improving the LCD reaching retina display has been a significant enabling factor. More importantly, the growing advancement of the lithium-ion battery pack for powering increasingly energy-hungry applications has been playing a critical role in the evolution of the iPhone. Besides, the role of Toshiba in improving the solid-state disk drive is also vital. Software features like Siri and image enhancement are also highly favorable for releasing successive better versions.
Apple’s Response—releasing successive better versions leading to diffusion among increasing customers
As explained at the beginning, only a small group of people showed interest in the iPhone. Hence, the first generation succeeded in diffusing only among little more than 6 million customers. Furthermore, the perceived value of the iPhone started drifting downward due to the response from the competition. In retrospect, the legal battle in the court raising the issue of infringement of intellectual properties was not sufficient enough to sustain the iPhone in the market. To counter it, Apple took advantage of the favorable forces. In addition to advancing existing features, Apple also started adding new features. Besides, externality factors also started increasing the perceived value of iPhone features.
Hence, Apple succeeded to keep releasing better versions. Customers started perceiving the increasingly better value of money in successive releases. Consequentially, iPhone succeeded in diffusing among new customers. Besides, existing users of the iPhone became allured to replacing their older versions with the recently released ones. As a result, along with the evolution, iPhone succeeded in diffusing among a growing number of customers. In retrospect, the blooming of the iPhone in each new season has been attracting a growing number of customers. Such a reality unveils the iPhone evolution and diffusion pattern as a seasonal crop, as shown in Fig. 2. In each season, the diffusion wave has been progressively growing. But to such a response in a consistent manner over the years, there has been a great demand for systematic ideation.
