Just Stop It: Apple Does Not Need a New Category

This post was originally written in October, 2013 but still applies.

Every time one more journalist wakes up from his sleep they talk about how Apple may be doing fine for now but it really really needs a new breakthrough product.

Time Magazine says “Apple has to create a new category, or it will sink into normality”.

Apple is doing very well leading one of the biggest transformations in last 20 years. You would have to be a complete idiot to expand out of an extremely large market where you have a strong lead (at least as measured by smartphones actually used by people to connect to the internet).

Apple is making ungodly sums of profit in a highly lucrative market that is still growing very fast. This is a market (smartphones) that grew 46% as a category, according to Gartner.

Let me address some of the ideas raised:

• Big Market: I think you have to be living under a rock to believe that smartphones are not a huge category — and as we all know Apple is going after the non-PC segment tablet market too and leading.
• Growing Market: The phone and tablet markets are growing fast.
• Unsaturated Market with High Replacement Rates: Yes, everyone in the silicon valley seems to have the latest gadget but the numbers tell you clearly that the market is growing very rapidly as a category.

Now let’s look at the ideas everybody seems to want Apple to execute on:

I just don’t see why you would run around throwing darts when your core product and go-to market is very well aligned, working and delivering tremendous cashflow and profits in a growing market.

If anything, Apple needs to double down on the markets its already in. This how the greatest companies like FedEx, WalMart, Amazon, etc have all won. Good to Great and the hedgehog concept requires this discipline.

(Originally published Oct, 2013)