Most people have forgotten that for every successful product Apple has released, there have been multiple failures.
Prior to iPad, Apple made Newton, a personal digital assistant that crashed badly in the market. Before Mac, it had Lisa, which was technically advanced for the time, but sold so poorly that Apple wound up dumping its stock in landfill to get a tax break.
More recently, there’s been Apple TV, which Steve Jobs himself has described as a “hobby”, a product that hasn’t (at least at this stage) radically redefined anything very much.
Admittedly, it is still early days for the iPad, which could fail to transform much as well.
The point of all this is Apple has taken some big risks, and the result is it has had its share of product failures.
But those who look at companies like Apple with their string of hits almost always conveniently forget the failures still occur, and they happen with a regularity that makes focusing on big hits a very risky business.
How, then, is Apple successful? In between its big hit products, Apple spends a lot of time doing traditional product development based on incremental innovation. It releases, for example, Time Machine, which makes it easy to do backup. And Airport Express, which simplifies the process of doing wireless networks. They are both boring products which help pay the bills.
Apple is successful because of a balanced innovation portfolio. It doesn’t rely only on big, transformational change to the exclusion of all else, because this results in a very significant concentration of risk. Constructing an innovation portfolio with care has resulted in the company coming back from the dead to challenge powerful incumbents in three key markets.
In less than 10 years, Apple has become the leading consumer electronics products company in the world. Innovation portfolios work, and they are one of the only ways to drive reliable growth.