Apple’s mobile strategy, invented entirely under the second reign of Apple (NSDQ: AAPL) Chairman Steve Jobs, is the reason the company has become the most powerful entity in the tech industry. Now that he’s stepped aside, maintaining Apple’s position as the thought leader of mobile is job number one for new CEO Tim Cook and team.
A new era began with the launch of the iPhone in 2007, and it’s fair to say that Apple hasn’t looked back. The App Store an successive iPhones introduced a wide swath of the U.S. and world to application-driven Internet-connected mobile computing, and while Google (NSDQ: GOOG) has managed to take the overall lead as far as market share is concerned, Apple takes home the lion’s share of the mobile world’s profits and a commanding position in the new market for tablet computers.
Any time a leader of Jobs’ caliber steps down, it’s quite natural to wonder what comes next. In the short term, it’s very unlikely that Apple will miss a beat. Product road maps likely extend out several years, and Jobs’ position as chairman (he vowed to be an “active chairman”) will still allow him to be a sounding board for the tough decisions on aspects of Apple’s mobile strategy that he would have always judged in the past.
But to be quite honest, Jobs’ health has clearly declined to the point where he no longer felt he could give Apple as much attention as in years past, which could not have been an easy decision. Apple simply can’t bank on the fact that he’ll be around as new road maps need to be created, or as shifts in the market force adjustments to the old plan.
Nonetheless, there are a few key aspects to Apple’s mobile position that aren’t going away for years and that can’t be easily duplicated:
Developer focus: Apple has the attention of the world’s mobile developer community. They look to iOS first when they come up with a brand new mobile idea, and even big companies lured by Android’s volume know they can make an easier investment in iOS without having to support all the fragmentation inherent in Android.
Unless Google decides it is going to mimic Apple once its Motorola (NYSE: MMI) purchase is approved, that’s going to be the case for several years to come: and if Google turns Android into a Google-only operating system, the lure of Android’s volume will diminish. And it’s going to take a long time before any of the also-rans in the mobile development business garner the same mindshare among developers that Apple enjoys.
Retail: Apple’s network of retail stores is unprecedented in the technology industry, where most companies rely on third-party retailers like Best Buy or online sales to reach their customers. Apple’s shrines to its products attract people in from off the street just to check out the goods, and its local approach to customer service through the Genius Bars beats the pants off phone-based technical support. Retail chief Ron Johnson is leaving the company in November, but the retail operation is a well-oiled machine at this point.
Component sourcing: Apple, under what is believed to be Cook’s direction, has secured long-term supply contracts for vital mobile components at favorable prices. It’s likely to continue this strategy now that Cook is CEO and its immense cash hoard allows it to dictate terms to suppliers eager for a piece of that pile. This gives Apple a profit advantage that can be reinvested in the mobile business, and denies competitors the ability to make similar margins on their own phones and tablets.
The one thing that seems pretty clear about the mobile world, however, is that the pace of change in this market exceeds anything we’ve seen so far in the tech industry, with winners and losers changing hands in just a year or two. To paraphrase a quote from hockey legend Wayne Gretzky that Jobs was also fond of repeating, you want to skate to where the puck is going to be, not to where it has been.
Under Jobs, Apple has had a knack for knowing exactly where the puck is going to be while the rest of the tech industry skates in circles. Cook and the rest of Apple’s management team have been planning for this day for a very long time, and will still have access to Jobs and his philosophies as the make the transition.
One of these days, however, they’re going to have to skate on their own. There’s simply too much at stake in the land rush currently underway for the mobile computing market to assume that the assumptions and conventional wisdom of the mobile world in 2011 will continue to hold sway in 2016.