An ibike? A solar-powered iPhone? Or maybe an iKey?
During 2010, Apple received 563 patents. In addition to the iBike, a solar-powered iPhone, and an iKey, Apple’s patents included a wand remote and a touchscreen iMac. When asked about Apple’s products, one person who follows their patent history said it was not about superior technical ability. Instead, it was all about vision.
That takes us to Apple’s founder and CEO, Steve Jobs, who just announced he was taking a medical leave of absence. Asked about how much market research he did to develop the iPad, he answered, “None. It isn’t the consumers’ job to know what they want.”
It also takes me to Steve Jobs’ commencement speech at Stanford, 2005. Wonderfully inspiring, it provides insight about this gentleman who describes what he “stumbled into by following his curiosity…”
The Economic Lesson
We call Apple an oligopoly because it competes against few firms, it has some control over price, it enjoys the benefits of mass production, and market entry and exit are relatively difficult. Also, as demonstrated by Apple, product differentiation is the key to successful competition.
As one Bloomberg commentator said, with Apple, “…after buying something you never thought you needed, you decide you can’t live without it.”