Now That The iPhone Is 10, It’s Time For Apple To Kill It

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Originally posted at Forbes.com

Joi Ito is the Director of the “Media Lab” at MIT — a place where brilliant creatives come together to grope around on the edge of the inventive darkness in which the future most of us think we see melts into things far more mind-blowing. In his recently released book Whiplash: How to Survive Our Faster Future, Ito quotes Google’s Larry Page, from this 2013 interview in Wired magazine:

{M}ost companies decay slowly over time. They tend to do approximately what they did before, with a few minor changes. It’s natural for people to want to work on things that they know aren’t going to fail. But incremental improvement is guaranteed to be obsolete over time. Especially in technology, where you know there’s going to be non-incremental change.

If you’re a leader, there are nine words there that are worth repeating and burning into your organization’s memory: incremental improvement is guaranteed to be obsolete over time.

I was reminded of these words and Ito’s principle of “Risk over Safety” as the internet took note of the significance of yesterday’s date: the 10th anniversary of Steve Jobs’ memorable reveal of the first iPhone at Macworld. That iconic moment radically altered not just the smartphone world, but how we interacted with technology on a far more fundamental level. Even beyond that, however, the development of the iPhone exemplified Apple at its absolute best — bypassing mere incremental advances in favor of aiming for exponential ones, even at the expense of their own current products.

Source: statista

Source: Statista

When the iPhone debuted, the iPod accounted for nearly half of Apple’s revenue portfolio, and enjoyed near total dominance with an estimated three-fourths of the U.S. market for MP3 players. When Apple began working on their phone project three years before, the iPod’s success served as a catalyst and inspiration rather than a sacred revenue cow that was to be protected at all costs, even if it stood in the road blocking the iPhone’s path. Jobs is famously quoted as encouraging his company to “cannibalize yourself,” and the dawn of the iPhone era represented that core principle put to practice. The numbers, as they say, don’t lie.

Today, at the ripe old tech age of 10 years old, the iPhone now sits where the iPod once did as the single most important product in Apple’s financial universe. The iPhone ended 2016 accounting for nearly 60% of all of Apple’s revenue, a number which had peaked at nearly 70% only one year ago.

Which means it’s time for Apple to kill the iPhone…not in one fell swoop, of course, and not as the intended goal. Adding another camera lens and water-resistance is nice, and subtracting the headphone jack is edgy, but the time for Apple to stick to revenue-enhancing incremental changes of the iPhone is fast coming to a close. The impact of Moore’s Law isn’t just on the price of computer processing power. No matter how innovative your product or service once was, sticking to incrementalism in order to most efficiency milk the maximum amount of revenue out of it is a losing proposition. As your incremental change curve flattens out, the development that will render you obsolete will be disappearing in your windshield before you ever noticed it approaching in your rear-view mirror.

Apple is the company that most purely illustrates the power of Simon Sinek’s “Golden Circle,” and yet even it is capable of being left behind by the accelerating pace and scope of change. The temptation to hold tightly to “what” they do in the iPhone is powerful. Nevertheless, Apple must ignore the chorus of financial analysts as they have done before and push forward toward finding the next physical manifestation of “why” they do what they do. It’s time for Apple to build the iPhone killer.