Recently, in an interview, Mark Zuckerberg 3.0 (that’s Mark with the designer shirt and million-dollar wristwatch) decried Apple’s lack of innovation and said the company makes money by squeezing developers and gatekeeping their ecosystem. However, that wall is starting to wear out with the rise of innovative products from other phone makers. 

iPhone sales have been steadily declining, so much so that unit sales are not recorded in their annual report. However, the company has grown its revenue by charging a premium on its flagship products. With a lack of significant upgrades, iPhone users are clinging to their older phones and slowing the rate of upgrades. Also, the Galaxy Fold series has a strong pull on business-class users, offering an engaging and bold experience. 

History Repeating Itself?

Years back, Apple was in a major rut. They made all sorts of products just to survive. This was after its founder, Steve Jobs, was unceremoniously ousted from the company. However, upon his return, he cancelled 70% of the products and focused on the iPod, a major hit that revolutionized music consumption. Thereafter, he went on to produce the iPhone, combining iconic marketing campaigns, novel technology, and an uncompromising design focus. The iPhone has been the highest-selling product in the world from inception, having sold more than 2.7 billion units globally.

What’s so valuable in this lesson is how Apple utterly dominated the world’s leading smartphone platform at that time with its invention and continual evolution. Blackberry saw companies replicate its strongest selling point of push emails, instant messaging, and creating opportunities for 3rd party applications, but they kept crawling in response. The Blackberry storm, which was RIM’s response to the rise of touch screens from the iPhone, was a terrible flop. Blackberry saw Apple and Android phones eat away at their market share as if they were buried alive. 

What can Apple do Next?

The technology market is super dynamic, and companies that do not innovate will be beaten. While Apple has acknowledged the need to improve iPhone sales, it has failed to address the elephant in the room, which is to improve the iPhone design significantly. There has been no major upgrade on the iPhone design for over five (5) years besides switching the position of cameras. 

Apple can consider a foldable design for the iPhone Pro versions to rival the Galaxy Fold Series or infuse some augmented reality elements in their phones, a technology they are familiar with from the Vision Pro headset.

Apple’s recent lack of innovation can offer some valuable insights for entrepreneurs to always keep the gears of their business moving, which includes:

1. Stay Ahead of the Curve

Continuously monitor industry trends and emerging technologies to anticipate changes and stay competitive. Make product-market fit decisions that you can afford, and you have good evidence that demand will validate and drive your product-market fit decision.

2. Encourage a Culture of Innovation

Foster a work environment that promotes creativity, experimentation, and risk-taking to drive innovation. This is easier said than done. Don’t fall into a trap of shiny-object syndrome, where every new idea is the right one. Leverage a wide range of opinions from your team, customers, suppliers and partners to choose the highest value innovations.

3. Diversify Your Products or Services

Expand your offerings to reduce dependence on a single product or service, making your business more resilient to market fluctuations. Don’t diversify for diversification’s sake. Remember that replicating your previous success will likely be just as difficult with a new product or service. Use the learnings from Steps 1 and 2 above to make great diversification bets. Always, always, always evaluate the diversification investment return to just putting more fuel into your existing business before you make a decision to move forward with diversification.

4. Responding to Competitive Pressures in a Real Way

As competitors advance in artificial intelligence, Apple’s delayed response emphasizes the need for businesses to remain agile and responsive to industry trends. Siri still stinks. Today, in fact, while driving Siri refused to find my sister’s contact name for an iMessage after literally calling her for me when I asked five minutes earlier. This is after their Siri Intelligence “innovations” and Apple’s ChatGPT hoopla. If you are going to compete, do it seriously and make sure the basics are working. 

5. Focus on User Experience

Prioritize customer needs and preferences to create products or services that meet their evolving expectations. Listen to your customers and spend time with them. Talk even more to customers that chose a competing or substitute product. Their knowledge is priceless and will keep your priorities focused.

About the Author: Salvatore Tirabassi is a seasoned Chief Financial Officer and change agent with over 25 years of success transforming finance to innovate, grow, and increase shareholder value. Based in or operating out of the New York City Area, Salvatore specializes in providing Fractional CFO services to businesses, offering strategic financial guidance to drive growth and success. Connect with Salvatore on LinkedIn or CFO PRO+Analytics for more financial management and strategic planning insights.