Could the iPad be Apple’s last great disruptive product?

by Tim Bajarin

February 10 2013

Oft-quoted Silicon Valley analyst and consultant Tim Bajarin, is president of Creative Strategies.


One of the things Apple has demonstrated over its lifetime is that it has become the great disruptor. When the Mac came on the scene in 1984 and introduced computer users to the graphical user interface, it shook up the text based DOS OS market so dramatically that it forced Microsoft to follow their lead quickly in order to stay relevant. Now GUIs are the norm on all PCs.

18 months later, Apple pushed the Mac as a disruptor to the publishing market with the introduction of desktop publishing. Marrying the Mac, a desktop laser printer and Aldus’ Pagemaker software, Apple championed a desktop publishing solution that completely changed the publishing world by letting people create content on demand and publish it without the help of traditional publisher’s big iron solutions. Today, personal publishing at the desktop or on the Web has its roots in Apple’s disruptive Desktop Publishing blitz.

In late 2000, Apple upended the music market with the introduction of the iPod and its radical and easy way to access, buy and play music on the go. While pirating music was the real disruptor to the music industry back in the late 1990’s, only the tech literate went online to get MP3 files. While early MP3 players came out to make digital music playback more portable, it took Apple with iPod and iTunes to really disrupt the digital music market and bring it to the masses.

Then in 2007, Apple disrupted the cell phone market with the iPhone. While Apple did not invent the smartphone, they reinvented it in ways that completely disrupted the carrier’s way of managing and controlling their own programs and added the element of a truly intelligent OS and apps to the smartphone landscape. The iPhone has literally redefined what a smartphone is and has dramatically disrupted the entire world of telecommunications around the world.

Apple did not invent the tablet, they reinvented it

In 2010 Apple introduced the iPad. They did not invent the tablet. They reinvented it and in the process reinvented the personal computer. Now the iPad has become a major disruptive force in changing the dynamics and fortunes of the traditional PC industry. Thanks to the iPad and tablets overall, PC and laptop sales were off around 10% in 2012. Our estimate is that PC and notebook sales will be off at least 10% in 2013 and it could see an even steeper drop as tablets gain more ground in business and consumer markets. A more interesting projection is that for the first time, tablets will outsell notebook computers worldwide in 2013.

The disruptive nature of the iPad was not predicted by anyone except perhaps Steve Jobs, who clearly understood the impact the iPad would have on the market. To all PC makers chagrin, they too did not see tablets coming and were not prepared to make the transition from a high volume PC business to the next big personal computing device for the masses.

Although they are trying to play catch up with Apple and Samsung, the Wintel crowd is behind in tablets and I am not sure they will ever really gain ground against Apple and the Android crowd.

Is Apple done disrupting markets?

While Apple continues to deliver record sales and record profits, the financial community seems to think that Apple is done innovating and disrupting markets. Their demands for outlandish quarterly profits have sunk Apple’s stock over the last seven months and I have heard some even suggest that Apple has peaked and it’s downhill from here on in.

However, if you study Apple’s history, especially since Steve Jobs returned to the company in 1997, Apple’s actual cycle of creating innovative and disruptive products is around three-to-four years on average. In the case of the time span from the iPod to the iPhone, it was actually 7 years.

This suggests that Apple is not driven by time clocks or stock price when it comes to innovation. Rather, they take their time and think things through. They focus on the fusion of the hardware, software, and service ecosystem aspect of new and innovative products, before they bring them to market.

There is a key reason for this attention to detail. Apple has an internal mantra that when they introduce a new category of product that has the potential of shaking up or disrupting a market it must be done so that Apple will have a two year lead at the very least over their competition. If not, they won’t touch it.

That is why Apple didn’t just deliver a new MP3 player, but rather an entire hardware, software and solution approach when the iPod was launched in 2000. The same goes for the iPhone and the iPad. In both cases, from time of launch to time competitors come even close to catching up, Apple always has at least a two-year lead.

What’s left to disrupt?

So, is Apple done disrupting markets? Don’t bet on it. Most likely the next market they will disrupt will be the TV market and while we don’t know exactly what they are doing, given their track record I am pretty sure that this product will have a dramatic and disruptive nature on the television industry when it does come out. If done in dramatic fashion, competitors may need more then two years to catch up with them this time.

Another industry Apple could disrupt is the auto industry. Although cars are getting smarter, they have a lot of room for innovation around embedded screens that are popping up in cars even in the mid-price range.

Imagine if Apple and one or two major car-makers get together to write the next chapter of intelligently connected automobiles that marry dedicated applications, an ecosystem of services and always connected automobiles and what its potential impact could be on the future of road travel.

Waiting for a Dick Tracy watch

Another industry Apple could disrupt is the watch industry. Many people are watching closely the Pebble Smart Watch that is just now shipping to see if its connection to iPhones and Android phones takes off. This particular product is an interesting first step in marrying the smartphone with a watch but it mainly brings smartphone alerts and calling info to the watch’s face.

While I really like the Pebble smart watch idea, what I really want is Dick Tracy’s watch and I am betting that Apple is the company that will eventually give this to us.
Could our homes get smarter too? Of course they can. It is not a coincidence that the former head of hardware at Apple, Tony Fadel, has created the Nest thermostat that is connected to the Internet and is smart enough to watch your heating and air conditioning habits and adjust them automatically.

You can control your thermostat over the Internet too. This suggests to me that the concept of the smart home was in the works when Fadel was with Apple and that Apple has been working on this internally for some time. I am convinced that Apple will be the company that eventually disrupts the home automation apple-cart so-to-speak and makes it another prime market to disrupt in the near future.

Controlling the Smart Screen

In each of the examples I state above, you may have noticed that a “screen” is involved. Screens are mostly necessary for managing, viewing and even controlling content.
In the case of Apple TV, there is a possibility of Apple actually doing a physical TV, but if so, think of it as mainly a giant iPad in that it could have the same guts and intelligence of that is in an iPad.

However, if I was a betting man, I would bet that the heart of Apple’s true TV product lies in the way the iPhone and iPad interacts with their giant iPad or any other TV via a smart box and that the real disruptive products comes in the way they marry the iPhone and iPad into the next generation TV viewing experience.

All smart cars will have screens in them too. Imagine if a dedicated iPad is embedded in a car that doubles as the car’s map as well as the vehicle for a whole host of auto-dedicated apps.

Imagine a 2-inch square iPad

As for the smart watch, what if Apple could create an iPhone or iPad that is 2 inches square and could be worn on our wrists. While it may have some touch screen features, the real way you would interact with it is via Siri a la Dick Tracy.

As for the smart home, imagine iPads integrated into appliances, the kitchen or even bathroom mirrors that turn them into highly intelligent devices within the home as well as being the center of a whole homes automation system.

If any one thinks Apple has stopped innovating then I have a bridge in NYC that I would like to sell them. Apple is a very smart company run by some very futuristic thinkers that have a toy box of integrated products and services to work with.

To think that they will not take this and use it to disrupt other markets is short sighted. It might take time, but Apple is more than capable of continuing to innovate and drive markets in new directions.

(A version of this article appeared originally in Techpinions and is posted here with permission of the author).

Oft-quoted Silicon Valley analyst and consultant Tim Bajarin, is president of Creative Strategies.
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