The Puzzle of Apple
Given Apple’s unique characteristics, should it strive
to be a platform or a product leader?
ONE OF THE greatest product
in history is Apple, Inc.,
founded by Steve Jobs and
Steve Wozniak in 1976.
Apple’s list of “truly great” products—
Jobs’ promotional mantra for the Macintosh personal computer—is truly
impressive, but the company has too
often failed or chosen not to develop
industrywide platforms. I will explain.
The Mac, introduced in 1984, pioneered the graphical user interface (
albeit copied from Xerox) for the mass
market. Other great Apple products
include the first mass-market PC, the
Apple II, introduced in 1977; the Pow-erBook, which in 1991 set the design
standard for laptops; the unsuccessful though still-pioneering Newton
PDA, first sold in 1993; and the iMac
all-in-one “designer” PC, released in
1998. More recently, we have seen the
iPod digital media player (2001), the
i Tunes music and other digital media
service (2003), and the trendsetting
iPhone (2007). Jobs does not take personal credit for all these products. He
was absent from the company during
1985–1997 and returned only when
Apple acquired his other company,
NeXT Computer. That firm provided
the basis for another hit Apple product released in 2001, the Mac OS X
operating system. But Jobs created
the design culture and hired or supervised the people (such as Jonathan
Ive, chief designer of the iMac, the
iPod, and the iPhone) most responsible for the company’s current success
and historical legacy.
But I have often wondered what the
world would have been like if Steve Jobs
had thought a bit more like his archri-val, Bill Gates. Microsoft, founded in
1975, does not generally try to develop
“truly great” products, although occasionally some are very good. Mostly, Microsoft tries to produce “good enough”
products that can also serve as industry
platforms and help bring cheap and
powerful computing to the masses
(and mega-profits to Microsoft). MS-DOS, Windows, and Office have done
this since 1981.a
a See Michael A. Cusumano and Richard W.
Selby, Microsoft Secrets, Free Press/Simon &
We can define the term “platform”
as a foundation product or key technology in a system like the PC or a Web-enabled cell phone. A platform should
have relatively open technical interfaces and easy licensing terms in order
to encourage other firms to contribute
complementary products and services.
These external innovations create an
ecosystem around the platform. The
critical distinguishing feature of a platform is “network externalities”: the
more external firms in the network that
create complementary innovations, the
more valuable the platform becomes.
This dynamic should cause more users
to adopt the platform, more complementors to enter the ecosystem, more
users to adopt, almost ad infinitum. b (I
say “almost” because there is some evi-
Schuster, N Y, 1995.
b For more discussion on platform dynamics,
see Annabelle Gawer and Michael A. Cusumano, Platform Leadership: How Intel, Microsoft,
and Cisco Drive Industry Innovation, Harvard
Business School Press, Boston, MA, 2002 and
our recent article “How Companies Become
Platform Leaders,” MIT Sloan Management
Review 49, 2 ( Winter 2008), 28–35.