Apple Has an Innovation Problem – The iPhone 8 Will Be Proof
by Daniel Newman | June 13, 2017
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Over the past few weeks, I’m sure you have seen the barrage of coverage about the Apple iPhone 8 that will be coming out soon.

At this point, Apple seems to be on a yearly iteration pattern of releasing a new device with very small upgrades that most people cannot discern from one generation to the next. Well, supposedly this is all about to change as there has been big promises from the rumor mill that the iPhone 8 will be a departure from the uninspired and product-wide feature creep that has seemingly replaced innovation and imagination at Apple.

Now this isn’t entirely Apple’s fault, to some extent market pressures are now forcing mobile device manufacturers to constantly put out new devices with barely noticeable differences to keep up with customer demands for shiny objects and the marketing departments needs for new products to develop slick ads for.

Nevertheless, Samsung, HTC, Google and Hauwei could put out 15 phones a year and their combined marketing launches wouldn’t generate the hype of a single iPhone launch. This is the Apple effect and as a byproduct, I have extraordinarily high expectations of each release and I would expect that buyers about to drop 500 to a 1000 dollars on a new device would too.

However, there is a problem: The Apple effect tends to cause a blind spot in buyers, who become so infatuated by the hype surrounding every new product launch that they cannot see that the products they are being sold offer merely small upgrades to the device they practically just bought. If asked how the new device will make their life better, they would probably struggle to answer because almost none of the upgrades are all that noticeable or meaningful. The most discussed upgrade from the iPhone 6 to the iPhone 7 was the removal of the headphone jack. Sure, that may not have been their biggest technical masterpiece, but it surely was the most hotly debated. But no worries, just add a 30-dollar dongle and you can plug your headphones in again; so long as you aren’t hoping to charge the device. That requires a different dongle or it’s just not possible. Brilliant, Apple.

Now, at this year’s Worldwide Developer Conference (WWDC), Apple didn’t talk a lot about the new iPhone. That will come later I’m sure, but they did talk a whole lot about other “Big Innovation,” especially around Augmented and Virtual Reality, as they have finally come out of their silent state to address the fact that Mixed Reality is an important technology trend, and that Apple should probably become a player in that space. Sadly, their “innovative” launches around the topic were hardly impressive. In fact, most of what Apple announced was leveraging others’ technologies. More troublesome is that, in comparison to what Samsung, Microsoft and others are doing, Apple appears to have fallen far behind the curve.

Let’s give Apple a pass on this and instead put on our fanboy hats, and give 3 quick cheers for their big AR/VR coming out party, because this is what Apple fans do. As a user, I feel it is my requisite duty to fall in line and play that game. But now that I’m done, let me quickly point out that Apple’s late arrival to the party is actually okay. I kind of liken their strategy to the Steve Ballmer strategy at Microsoft during his reign. In many ways, I think he and Tim Cook are the same person: All focused-on profits and operational efficiencies while missing trend after trend. However, that is a topic for another day. I digress. Let’s say for a moment that Apple is putting their toe in the water, but ready to make a full-fledged launch into the Mixed Reality market. The key is going to be the processing power of their new mobile devices considering two things:

  1. Most people will want to use AR/VR from their mobile device.
  2. The chip/modem in the iPhone will be the enabler of Mixed reality experiences.

Knowing this, it would probably be a good idea for Apple to use the most prolific technology they can access in their devices – to be certain that their users will be able to enjoy the advancements in Mixed Reality that Apple plan to make, not to mention other edge computing advancements. However, if you have been reading up on what is going on with Apple, their operational focus has them instead suing some of their most critical innovation partners – like Qualcomm. Qualcomm is currently the only chip maker whose technologies allow for gigabit download speeds, meaning that only with the Qualcomm chip can the iPhone 8 deliver Gigabit LTE, which at this point may not be hyper-relevant, but it will be soon as emerging tech will require what Gigabit LTE (Eventually 5G) and faster more powerful modems can deliver. Sources though, are suggesting that Apple will be skipping on using the Qualcomm chip in some or all its iPhone 8 devices as the two are battling out their differences in court. The greater data speeds will have huge impacts on all edge computing capabilities including mixed reality and as apps are developed to leverage mixed reality, iPhone 8 users won’t be able to benefit from Gigabit LTE unless they once again upgrade their device.  This is becoming a pattern for Apple as they throttled the Qualcomm modems in their iPhone 7 series in order to allow equal performance from an inferior Intel chipset that they used in some of their 7 series devices. Perhaps what is even worse is allowing your customers to buy an inferior product for a lot of money, when giving them the best technology is not only possible, but available today. Choosing profits over experience at the cost of their loyal customers doesn’t seem like the right path for Apple, and yet, here we are.

In recent months, we have been trying to figure out what Apple is up to, and why they are struggling to innovate. With a war chest larger than some countries’ GDP at Apple’s disposal, it obviously isn’t a resource issue, and with a massive supportive customer base, it certainly isn’t a lack of demand either. I really can’t see why, as a society we would tolerate buying inferior products, when better is available today. I realize this is a bit of a detour from the innovation discussion, but it’s worth noting as the approach is common among companies struggling to innovate, yet still strong from a brand perspective.

I suppose maybe Apple doesn’t care. Maybe they are going to wait another year and then, maybe, get a better chip into the next iPhone. And since they know the supporters will keep splurging with their hard-earned money, why not leave a few strategic features out of the device? Is Apple’s strategy now to capitalize on fan loyalty at the expense of delivering the superior products and outstanding user experiences the Cupertino giant used to be famous for? Are we beginning to see Apple turn into an “also in” company for whom “good enough” has replaced “Think different?” One thing is clear: Apple’s litigious approach of suing-for-profit instead of leading with innovation is the wrong strategy, and it is already proving disastrous for the upcoming launch of the iPhone 8.  It may not cause them any significant financial woes, but Apple’s most valuable assets are its brand and its passionate user base – a user base that became passionate because they fell in love with a company that pushed innovation and sought to deliver the best products on the planet. That was Apple at one time, but not any longer. Now we have a very different Apple, one that knowingly charges premium prices for inferior products and doesn’t seem able to innovate as well as it used to, let alone as well as its competitors. I know this not only as an analyst, but I have come to realize it myself as a significant user of Apple Technologies. This begs the question: how long will consumers continue to put up with Apple’s current path before deciding to spend their hard-earned money elsewhere? Because, as long as we keep buying underwhelming and uninspired Apple products, why in the world would Apple get back to being the company it used to be?

For more on what is going on with Apple and Qualcomm visit our other coverage on the topic here.

Qualcomm Fights Back: Defending The Future of Innovation and IP Laws
What Apple Didn’t Talk About During its May 2 Earnings Call


Photo Credit: C_osett Flickr via Compfight cc

About the Author

Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio