Apple's $3 Trillion Valuation


Jay Haynes takes me to task on a point I made recently:

MG Siegler noted that Apple “wants to be the ones to disrupt themselves… But never with stakes this high…”. But I would argue the stakes were incredibly high when Apple decided to disrupt the Mac and the iPod (both about 100% of their revenue) at the same time. And history is a good indication that Apple is probably thinking about disrupting the iPhone, even now. A truly disruptive product to the iPhone might not emerge for years, but I can’t think of another company that would prepare for and execute a self-disruption strategy like Apple. It is in their culture to do it, as long as the new product is insanely great. As a result, Apple deserves a higher future growth rate than the market is currently giving it.

Sure, I guess what I meant was that the stakes have never been this high in terms of the revenue. Of course Apple wants to be the one to disrupt the iPhone and they’re thinking about it — I’m just not convinced it’s possible to replace such a high level or revenue. And that’s not a knock on Apple, I’m not sure anyone can. The iPhone is just that good of a business.

Another point Haynes makes that I absolutely agree with:

Microsoft made the mistake of targeting the “iPod market” with the Zune. But JTBD theory shows us that there is no such thing as an iPod market, just as there isn’t a cassette market, an LP market, or a CD market. Companies get disrupted because they define the market based on their product, not on the customers job-to-be-done, e.g. the markets for listening to music and discovering new music.

That’s exactly the right way to think about it. It’s the end, not the means.

Excellent thoughts!

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    Emphasis on the last part.
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