Tuesday, October 31, 2006

The Future Was Staring Us in the Face

The process of creating the iPod. How did Steve Jobs do that? ...

"The iPod turned five yesterday and much ink has been spilled in the last week about the product’s success, its ubiquity and impact on Apple. The state of the digital music market at the time of the iPod’s introduction has been relatively ignored though. It’s hard to imagine its embryonic state in 2001 from the perspective of 2006 and five years of hindsight. At the time, everything in the space, from devices to software to services, was up for grabs as various industries grappled with the problem of creating a new model for the music business. Several products already existed, but no one had quite nailed it before Apple came along.

One of the most remarkable things about the iPod’s introduction was the clearly articulated argument that Steve Jobs made when it was introduced. It’s preserved on YouTube and truly worth a look. Jobs’ argument is carefully constructed and compelling on many levels. However, aside from his famed “reality distortion field,” the argument adheres to basic business principles and provides an extremely useful template for the introduction of new products and services into emerging or underdeveloped markets.

Describe the Target Market:

On deciding where to innovate next, Apple chose music. Why?

“We love music, and it’s always good to do something that you love. More importantly, music is a part of everyone’s life. Music has been around forever; it will always be around. It is not a speculative market. Because it is a part of everyone’s life, it’s a very large target market all around the world. It knows no boundaries.”

Although I’m sure he (and his team) examined it in great detail, Jobs stays away from hard numbers such as demographics, market size, dollars spent and average music library size. During the pitch, he keeps the focus on where music fits in people’s lives, not where it fits into Apple’s bottom line.

Know What You Are Not Going to Do:

It’s a given that the digital music player market wasn’t exactly saturated in 2001, but Jobs’ back of the napkin analysis of the opportunity space was clever in its adherence to simplicity. He compared traditional CD players, Flash-based units, Mp3 CD units and hard drive jukeboxes on a simple price per song basis. Again, a basic analysis but one that illuminates the choices available to Apple. More importantly, Jobs was clear about what Apple wasn’t going to do. “We studied all of these and that’s where we want to be.”

State Clearly What You Are Going to Do, Part 1:

Jobs described where the iPod fits into Apple’s product portfolio in one simple sentence:
“iMac, iBook, iPod.” Having established it as part of Apple’s consumer-focused offering, he offered why Apple could go there:

“No one has found the recipe for digital music. Not only do we think we can find the recipe, but we think the Apple brand is going to be fantastic because people trust the Apple brand to get their great digital electronics from."    (Continued via adaptive path)    [Usability Resources]

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