Apple iPod Strategic Product Roadmap in Multidimensional Form
The purpose of this section is to present the multidimensional strategic product roadmap for the Apple iPod from 2001 to 2013. The iPod roadmap is organized in accordance with the multidimensional strategic product innovation framework and evolution pathways diagrams discussed in the previous section describing the genesis of the post-PC era.
Apple iPod 2001: The Introduction of the Post-PC Archetype
In late 2001, Steve Jobs introduced the Apple iPod, a revolutionary portable music player that fit comfortably in one's hand or pocket and enabled users to store and play 1,000 songs from their own personal music collection anytime day or night, or anywhere, including at home, school, work, play, or on the go by foot, bike, car, or plane.
What made the first iPod (shown in the diagram below) so innovative was its effortless one-hand operation vastly simplified via a novel mechanical scroll wheel, its intuitive and visual navigational structure based on playlist, artist, album, and song, its immense storage capacity made technologically feasible by a miniature mechanical hard drive, and its lightning-fast music synchronization speed made possible by a high-speed communication technology called FireWire.
Other notable features included long battery life (10 hours), power transmission and battery charging via FireWire cable, auto-sync with a user's personal iTunes music collection on the Macintosh, multi-language support (English, German, French, and Japanese), and generous skip protection (20 minutes) allowing users to listen to their music uninterrupted while walking, jogging, hiking, biking, climbing, skiing, or dancing!
The 2001 temporal snapshot (time slice) of the multidimensional Apple iPod strategic product roadmap is shown above. As depicted in the
diagram, the first Apple iPod was strategically positioned as a member of the innovative products category and the status market category; that is, in the lower
left-hand quadrant of the multidimensional strategic product roadmap.
Given its strategic positioning as an innovative product targeted toward a status market, the price of the original iPod was relatively high, launching at a list price of $399, and the number of units sold was relatively modest, as shown in the Apple iPod unit sales chart presented in the Apple iPod Market Dynamics section below.
Apple iPod 2002-2003: The Initial Evolution of the First Post-PC Device
From 2002 to 2003, Apple evolved the original Apple iPod design, as shown in the diagram below, by increasing the device's storage capacity from 1,000 songs to 2,000 songs, replacing the mechanical scroll wheel with a touch-based scroll wheel, and lowering the price point from $399 to $299. Apple also made one other big change.
This big change was related to how users would fill up their iPods with hundreds and eventually thousands of songs. For the first release of the Apple iPod, this synchronization process was straightforward, as long as you were an Apple iTunes user. To sync their music, iTunes users would simply connect their iPod to their Mac using FireWire, launch the Apple iTunes music management application, and then seamlessly and automatically transfer any songs from a personal collection in iTunes directly to their iPod. It was as simple as that. There was a catch, however. At that time to be an Apple iTunes user, you also had to be an Apple Macintosh user, since iTunes only supported (ran on) Apple Mac computers. This rather severe limitation left many Windows users justifiably upset and clamoring for Apple to offer support for PCs, not just Macs.
While Jobs was reluctant to support the Windows-based PC platform at first, the installed base of users ripping, downloading, burning, storing, and managing their personal music collections using PCs was simply too large to ignore, especially if doing so jeopardized the future of the Apple iPod business. In short, the risks were too high, the opportunities too great to continue supporting only the Apple Macintosh platform. Apple had to make a major shift in strategic direction, which it did by committing itself to designing and developing Apple iTunes for Windows-based PCs.
In late 2003, Apple released Apple iTunes for Windows, enabling second generation Apple iPod (Apple iPod 2G) and third generation Apple iPod (Apple iPod 3G) customers to easily and intuitively manage their music collection on Windows-based PCs and automatically synchronize it with their iPods. Apple iTunes for Windows also offered immediate support for Apple iTunes Music Store, which Apple had launched earlier in 2003 to allow iTunes users to not only manage and synchronize their digital music collection, but to now purchase individual songs and entire music albums for very affordable prices, a highly significant milestone in an entertainment industry fraught with rampant digital music piracy at the time.
The 2002 - 2003 time slice of the multidimensional Apple iPod strategic
product roadmap is shown above. As depicted in the diagram, the second and third generation Apple iPods (Apple iPod 2G and Apple iPod
3G) were strategically positioned as a member of the premium products category and the luxury market category; that is, in the lower
right-hand quadrant of the multidimensional strategic product roadmap.
Given the strategic positioning of the Apple iPod 2G and Apple iPod 3G as a premium product targeted toward a luxury market, the price of the iPod 2G was still relatively high, launching at a list price of $399, and the number of units sold was still relatively modest, as shown in the Apple iPod unit sales chart presented in the Apple iPod Market Dynamics section below.
Apple Defines the Requisite Core Competencies for the Post-PC Era
Although Apple iPod unit sales were still modest in 2003, Apple had achieved something very unique in the consumer electronics industry in that it subtly redefined the rules of the game for the portable digital music player space. Now, in order to keep pace in this new game defined by Apple, competing businesses had to possess the following requisite list of strategic assets or core competencies:
As we will see in the next two sections, by adding a few more items to the
list of strategic assets above, Apple would create a set of sustainable competitive advantages giving rise to economic moats so vast that they would be effectively impassible, even to the
most stout competitors. Apple's core competencies in a) hardware, b) software, c) services, and d) media ecosystems will be
leveraged to Apple's advantage throughout time, as we shall see along our journey through Apple's post-PC
Apple iPod 2004: The Mass-Market Evolution of the First Post-PC Device
As shown in the diagram below, Apple introduced the Apple iPod mini in early 2004, as a smaller, thinner, sexier, and more colorful variant of its original iPod design. The iPod mini could store and play 1,000 songs, fit comfortably in one's hand, pocket, or around one's arm or waist, scroll and navigate effortlessly like its predecessor, sync lightning fast to a Mac or a PC, and keep users happily entertained anytime or anyplace with a bit more of a flair for fashion than its slightly taller, wider, noticeably thicker, and far less colorful progenitors.
Later that same year, Apple released the Apple iPod 4G, a design evolution of the Apple iPod 3G. As shown in the diagram below, the Apple iPod 4G had one remarkable new feature not yet seen in any prior iPod releases: the ability to store, navigate, and display photographs. This feature was so prominent that the iPod 4G was officially branded and marketed by Apple as the Apple iPod photo. The other important new feature was the ability to store and play 7,000 songs, a significant upgrade from the 2,000 song capacity of the previous two generations.
The 2004 time slice of the multidimensional Apple iPod strategic product roadmap is shown above. As depicted in the
diagram, the fourth generation Apple iPod (Apple iPod photo or Apple iPod 4G) was strategically positioned as a member of the premium products category and the luxury market category; that is, in the lower right-hand
quadrant of the multidimensional strategic product roadmap. Moreover, the newly introduced Apple iPod mini was strategically positioned as a
member of the low cost products category and the mass market category; that is, in the upper left-hand
quadrant of the multidimensional strategic product roadmap.
Given the strategic positioning of the Apple iPod 4G as a premium product targeted toward a luxury market, the price of the iPod 4G was still relatively high, launching at a list price of $349. However, with the strategic positioning of the Apple iPod mini as a lower-cost product targeted toward the mass market, the price of the iPod mini was lower than its cousin, launching at a list price of $249, and the number of units began to rise substantially, as shown in the Apple iPod unit sales chart presented in the Apple iPod Market Dynamics section below. The Apple iPod mini was a smash hit with customers, broke all previous Apple unit sales records, and set the stage for the next phase of Apple iPod growth, as we shall see in the next section.
Apple iPod 2005: The Climactic Evolution of the First Post-PC Device
In early 2005, Apple introduced the Apple iPod shuffle, the smallest, thinnest, and most highly portable variant of its original iPod design, as shown in the diagram below. The iPod shuffle could store and randomly play up to 240 songs, fit comfortably in one's hand (even while exercising) or pocket, be clipped to one's waist, sync lightning fast to a Mac or a PC, and let users rock out day or night, indoors or out, while lying down, sitting down, standing up, walking about or running about. In short, wherever you were of whatever you were doing, the Apple iPod shuffle could be there with you in a completely non-intrusive way.
Apple also introduced the second generation Apple iPod mini in early 2005 (see diagram below), as a design evolution of the first generation Apple iPod mini. The iPod mini 2G increased the device's storage capacity to 1,500 songs from 1,000 songs, offered enhanced battery life, brightened the color mix, and eliminated the gold version.
Late in that same year, Apple introduced the Apple iPod 5G, a design evolution of the Apple iPod 4G, with significantly more storage capacity (50% more), state-of-the-art screen, and sleeker profile (over 30% thinner). As shown in the diagram below, the Apple iPod 5G had another remarkable new feature not yet seen in any prior iPod releases: the ability to store, navigate, and display videos. This new feature enabled iPod 5G users to store and play their favorite music videos, video clips, television shows, home movies, and a limited number of available movies. Specifically, users could store and play 15,000 songs; store, view, and share 25,000 photographs; and store and watch 150 hours of video with the 60 GB iPod 5G model, and approximately half of that with the lower capacity 30 GB model.
Other notable features of the Apple iPod 5G included larger (2.5 inch), higher resolution (320 x 240 pixels), and more vivid (260,000 colors) screen; support for multiple video formats (H.264 at 30 frames per second) and MPEG also at 30 fps); and a new version of Apple iTunes (iTunes 6), which allowed users to buy music videos (2,000 available at launch, including U2 and Madonna), television shows (5 top shows from Disney, including Desperate Housewives and LOST), and movie shorts (6 short films from Pixar Studios) for $1.99 per video, $1.99 per TV episode, and $1.99 per movie short, respectively. Lastly, responding to user demand, Apple offered customers two color options for the iPod 5G: traditional white or black.
Also in late 2005, Apple released its "killer product", called the Apple iPod nano, which at that time represented the most advanced form of the design ever created (see diagram below). The iPod nano was the singular product that we believe Jobs in his heart, soul, and mind knew would have devastating consequences for all competitors, sending every single one of them back to the drawing board and leaving most struggling to survive in the digital music player space.
Consumers in the digital music player market had never seen anything like the iPod nano. It was so thin, so narrow, so light, and so very sexy. At the iPod nano launch event with media professionals, Steve brought the down the house when he rhetorically asked the audience if after all these years they knew the purpose of the little tiny front pocket in their jeans as he slowly removed the sleekest music player known to mankind from his own little tiny jeans pocket.
What made the iPod nano, shown in the diagram below, so unique was not only that it was so "impossibly" thin (thinner than a number 2 pencil), light (lighter than 8 quarters), long-lasting (14 hour battery life), and sexy, but it was also fully capable, in that it could store and play up to 1,000 songs, scroll and navigate just like its larger sibling, sync with a Mac or PC, and store and display photos. Like its larger sibling, the iPod nano available in two colors: traditional white and black.
In summary, the Apple iPod nano was a significant breakthrough during the nascent stages of the post-PC era because Steve and his design team were able to successfully distill the true essence of the original Apple iPod into a minimalist form without sacrificing its core capabilities or features. Quite a design achievement for Apple, a product evolution for mankind, and a massive blow to all incumbent competitors.
The 2005 time slice of the multidimensional Apple iPod strategic product roadmap is shown above. As depicted in the
diagram, the fifth generation Apple iPod (Apple iPod 5G) was strategically positioned as a member of the premium
products category and the luxury market category; that is, in the lower right-hand quadrant of the multidimensional strategic product
Also, the second generation Apple iPod mini (Apple iPod mini 2G) was strategically positioned as a member of the low cost products category and the mass market category; that is, in the upper left-hand quadrant of the multidimensional strategic product roadmap. Moreover, the newly introduced Apple iPod shuffle was also strategically positioned as a member of the low cost products category and the mass market category; that is, in the upper left-hand quadrant of the multidimensional strategic product roadmap.
Lastly, the newly introduced Apple iPod nano was strategically positioned as a member of the premium products category and the mass market category; that is, in the upper right-hand quadrant of the multidimensional strategic product roadmap. The most interesting thing about strategic positioning of the Apple iPod nano is that it sits at the design nexus where Steve's orange path evolution strategy converges with his blue path evolution strategy, as shown in detail in the section below entitled Steve's Evolution Pathways Converge to Usher in the Post-PC Era.
Given the strategic positioning of the Apple iPod 5G as a premium product targeted toward a luxury market, it carried a premium price tag, launching late in 2005 at a list price of $399 for the 60 GB (15,000 song, 25,0000 photo, 150 hrs video) model and $299 for the 30GB (7,500 song, 25,000 photo, 75 hrs video) model. In accordance with the strategic positioning of the Apple iPod mini 2G as a lower-cost product targeted toward the mass market, it carried a more affordable price tag, launching early in 2005 at a list price of $199 for the 4 GB (1,000 song) model and $249 for the 6B (1,500 song) model.
Given the strategic positioning of the Apple iPod shuffle as a low cost product targeted toward the mass market, it carried the most affordable price tag in Apple's iPod lineup, launching early in 2005 at a list price of $99 for the 512 MB (120 song) model and $149 for the 1 GB (240 song) model. Lastly, in accordance with the strategic positioning of the Apple iPod nano as a premium product targeted toward the mass market, it carried a more affordable price tag, launching late in 2005 at a list price of $199 for the 2 GB (500 song) model and $249 for the 4 GB (1,000 song) model.
The Rise of Apple as a Dominant Firm with the Dawn of the Post-PC Era
With the massive onslaught of new product releases in 2005, the number of Apple iPod units sold went off the charts, rising parabolically higher in through 2005, as shown in the Apple iPod units sales chart presented in the Apple iPod Market Dynamics section below.
2005 was the seminal year for the genesis of Steve's post-PC vision. A year when Apple fundamentally rewrote the rules of the game in the digital music player industry, decimated the competition, generated massive investment returns for shareholders, and proved to critics around the world that Steve's vision of the post-PC era had arrived in a tangible form that could be easily slipped into the pocket within a pocket of one's own bluejeans. Who would have guessed that the post-PC era would be introduced to the world from this tiny little pocket.
As we journey further into the multidimensional strategic product roadmaps of Steve's other magical creations, we will find that Apple periodically surprises the market, its competitors, media analysts, equity investors, and delights its customers by unleashing a heretofore unimaginable onslaught of product releases that simultaneously span all product and market dimensions of the strategic product roadmap at one discrete epoch in time.
This simultaneous strategic product onslaught represents the military equivalent of shock-and-awe applied to strategic games between competitors vying for dominant product and market positions across key segments within the consumer technology industry. Few firms in the technology industry have the core competencies required to plan, design, execute, and deliver such a powerful game-changing show of force. Apple is one such company. It has a proven track record of delivering on the impossible and the unimaginable. We will see it again, and again, as we journey forth together.
Apple iPod Market Dynamics: Unit Sales Figures & Apple Stock Price
The following strategic performance chart presents the complex interactions between Apple's stock price, iPod unit sales, and iPod multidimensional strategic product roadmap over time. The complex relationships depicted in this chart are significant because they provide deep insight into Apple's core product strategy and how that strategy drives consumer adoption of its digital lifestyle products and ultimately the market capitalization, or market value, of Apple itself.
In the diagram above, stock
prices are daily closing values, unit sales are quarterly totals, and strategic roadmap slices are annual temporal dimension
Steve's Evolutionary Pathways Converge to Usher in the Post-PC Era
The following strategic pathway diagram presents the dual-path temporal evolution of the Apple iPod from the revolutionary Apple iPod released in late 2001 to the game-changing Apple iPod nano released in late 2005 via the orange pathway through the Apple iPod mini and Apple iPod mini 2G released in early 2004 and early 2005, respectively and the blue pathway through the Apple iPod 2G, Apple iPod 3G, Apple iPod photo or Apple iPod 4G, and Apple iPod 5G, released in mid-2002, early 2003, late 2004, and late 2005, respectively.
In summary, the strategic
performance chart and strategic pathway diagram above may represent the most important figures on this site, as their utility to the various Apple stakeholders listed
is manifold in possible applications and manifest in potential value. This may be particularly true when applied to other current Apple post-PC products, including smartphones and tablets,
as well as future Apple post-PC products, including televisions and wearable computing devices, such as voice-controlled Internet watches and possibly Internet glasses, or inocles, with embedded and personalized intelligent agents, or Inos.
Apple Decimates Competitors as Paths Converge on the iPod nano
As discussed previously in the section entitled Steve Jobs, the Strategic Innovation Framework describes two distinct pathways (the blue path and the orange path) that successful companies pursue in order to accelerate profitable product innovation faster than competitors. When a company, such as Apple, is uniquely endowed with the resources and the core competencies to pursue the both pathways simultaneously, a magic event can happen. That magic event occurs when the blue and orange paths converge or collide at a particular moment in time.
This convergence happened in 2005 on a massive global scale in the digital media player market with the release of the Apple iPod nano, as discussed above in the section entitled The Climactic Evolution of the First Post-PC Device. What was not discussed above, however, was the precise way in which Steve and his talented team at Apple constructed a product with a set of features so compelling that it left all competitors years behind, both in key product features as well as requisite core competencies.
As shown in the table above
entitled The Rise of the First Post-PC Device, the Apple iPod nano offered a groundbreaking set of key product features when it was released in late 2005. The iPod nano feature set included an
"impossibly small" size (thinner than a number 2 pencil at 0.27 inches thin and smaller than a typical pack of gum at 3.5 inches tall and 1.6 inches wide), vivid and crisp color screen (65 K color,
176 x 132 or 23 K pixel, 1.5 inch diagonal display), one-thumb navigation (circular touch-sensitive click wheel), non-rotating storage (solid-state flash memory), typical
capacity (1,000 songs for the 4
GB model), all-day battery life (14 hrs), all at an attractive price for the mass-market consumer ($199 and $249 in the
4 GB models, respectively).
By pursuing a blue-path evolution of the Apple iPod over many years, Apple was able to gain core competencies in navigation technologies, display screen technologies, power-management technologies, and user interface technologies. By pursuing an orange-path evolution of the Apple iPod mini over several years, Apple was able to gain core competencies in miniaturization technologies, flash storage technologies, and volume manufacturing technologies. Collectively, these blue-path and orange-path core competencies combined synergistically to improve ease of use, enhance product intimacy, and refine the overall user experience to the point where Apple could introduce a new game-changing blockbuster product to mass-market consumers that was impossible for any competitor in the media player industry to match.
Specifically, by referring to the diagram below entitled The Rise of the First Post-PC Device with Competitive Differentiation Highlights, we can see that the feature set of the Apple iPod nano dominated all competitive offerings at the time. Green highlights indicate a significant competitive advantage. Red highlights indicate a significant competitive disadvantage. Non-highlighted elements indicate neither strength nor weakness given the mass-market target segment.
The diagram above provides a powerful visual representation of precisely why the Apple iPod nano dominated competitive product offerings in 2005 as well as valuable insight into why Apple was able to decimate all of its key competitors from that moment onward. The best way for Apple stakeholders (defined previously in the section entitled Steve Jobs) to gain this insight from the diagram above is to use it to help answer two fundamental questions:
Addressing the first question,
Creative lost because its most-competitive product offering at the time, the Creative Zen Neeon, was too large compared to the iPod nano (based on relative total volume), did not offer a color
screen, and located its navigation scroll wheel on the side of the device rather than on the front of the device. While the Creative product offered the right storage technology (flash) and a low
price point, these positive features were not sufficiently compelling to offset the aforementioned design flaws taken in the context of the consumer mass-market segment.
Samsung lost because its most-competitive product offering at the time, the Samsung YH-820, was too large, did not offer all-day battery life, utilized numerous buttons on the front of the device rather than a simple scroll or click wheel, and employed rotating hard disk drive storage technology rather than solid state flash memory. While the Samsung product offered a color screen with the ability to display photos and a low price point, these positive features were not sufficiently compelling to offset the aforementioned design flaws in the context of the consumer mass-market segment.
Sony lost simply because its most-competitive product offering at the time, the Sony NW-HD5, was not competitive on size (three times larger than the iPod nano by product volume), screen (monochrome black on white or optionally white on black), navigation (numerous buttons rather than simple click wheel), storage (rotating hard drive rather than solid state flash), or price (almost eighty U.S. dollars more than the iPod nano). While the Sony product offered the ability to store many songs (5,000 songs) as well as long multi-day battery life (30 hrs based on typical user experience and 40 hrs based on manufacturer specifications under atypical conditions), these positive features were not sufficiently compelling to offset the aforementioned design flaws in the context of the target segment.
Addressing the second question, Apple won because it leveraged its blue-path and orange-path competencies to deliver a highly-differentiated groundbreaking product offering with "really big features" and "impossibly small size" for the very first time. Specifically, with the iPod nano, Apple designed, engineered, manufactured, marketed, and delivered a portable media player to the consumer mass market with the right device size (half the size of competitive products based on relative geometric volume), the right screen (vivid and crisp color display), the right capabilities (portable music, portable photos, and portable document storage), the right navigation approach (click wheel on the front face of the device), the right storage technology (non-rotating, solid-state flash memory), the right user interface technology (intuitive, simple, and easy to use), the right battery life (all-day power), the right storage capacity (whole-library storage), the right manufacturing approach (high volume at global scale), and the right product name (nano, emphasizing its incredibly tiny size).
In a nutshell, no other competitor could match the product feature set of the Apple iPod nano in 2005. And more importantly, for Apple's long-term success, no other competitor could match Apple's blue-path and orange-path core competencies in 2005 and arguably anytime thereafter. Honed over time by pursuing the iPod evolution (blue path) and the iPod mini evolution (orange path), these unique multipath competencies enabled Apple to design, engineer, manufacture, market, and deliver a groundbreaking blockbuster product to the mass-market consumer that no other competitor could match.
Moreover, because competitors failed to pursue simultaneous blue-path and orange-path convergence strategies to arrive at game changing new products for the mass market, as Apple did with the iPod nano, their core competencies were wholly deficient relative Apple. As a result, Apple went on to dominate the portable media player market and decimate all of its competitors from that point forward. Moreover, because of its market dominance, Apple was able to command a price premium for its products, thereby enabling it to accelerate its profitable product innovation processes and ultimately advance its leadership position not only in portable media players, but also in new groundbreaking categories of post-PC blockbuster devices, as we shall see our future journey through Apple's other magical creations.
A Final Note on Steve's Gift and the Future of Apple Magic in the Post-PC Era
As a final note for this section, 2005 proved to be an important year for Apple, Steve Jobs, and the product teams at Apple. It represented a turning point for Apple as an industry-leading consumer products company, for Steve as an undisputed visionary force, and for Apple product teams as recognized holders of the industry's most valuable set of core competencies in product design, product engineering, product manufacturing, and product marketing. With Steve no longer with us, it is the latter of the three, the core competencies held by Apple employees, that will most clearly determine Apple's future in the post-PC era.
With the future of Apple resting on the shoulders of Apple's core competency holders rather than its late leader and co-founder, the fundamental questions for Apple stakeholders become twofold: a) Can the multipath product innovation and evolution strategies ingrained in Apple’s DNA over decades of wisdom and guidance from Steve Jobs continue to produce new magic for Apple and its customers as the post-PC era itself evolves? b) Will these multipath product strategies periodically converge and collide to produce unbelievable and amazing new post-PC products or, perhaps more importantly, entirely new categories of post-PC products that no one outside of Apple thought were humanly possible? We believe so, undoubtedly so, which would be quite a gift from Apple's undisputed visionary force. Quite a nice gift, indeed.