By Bill MacKenzie
Forward-looking supply chain managers track Apple with an eye toward seeing what tech features are being introduced by the company and how they can be used by other brands for their businesses. By way of example, Apple first introduced fingerprint recognition for the iPhone last year and recently is trumpeting its latest improved “retina” display (iPhone 6 / 1080p full HD resolution reportedly) as the new state-of-the-art industry standard. Maybe so, you are thinking — we’ll wait and see. I say, maybe you should be more interested in what Apple is doing — not for the products they introduce, but the components they use in them.
You may recall that crack-resistant, tempered glass was championed by Apple. This raised the ruggedness and thinness standards for mobile devices and liberated the form factor limitations of existing physical keyboard centric / framed display industrial designs for mobiles.
Apple’s purchasing clout in the mobile telephony market is well known by supply chain professionals and is actively mapped by forward-looking managers. They want to see what new features needing hardware support will (eventually) be available to other hardware products and brands. This is particularly relevant for companies in vertical markets where comparative volume is insignificant. While these companies can be at the bottom of the sourcing food chain, being able to swiftly adopt new hardware features that can enhance their product offerings once Apple has commoditized them can be a potent competitive advantage and brand-enhancing strategy.
For instance, vertical market companies in retail businesses closely track Apple’s reported embracing of NFC in future iPhones because it will drive migration of this technology into other mobile devices. This also offers much more secure transactions, much to the delight of the credit card industry. It is interesting to note that the U.S. has been the largest market NOT to adopt NFC. Plus, the device companies will find it much easier to add it to their slim form factors vs. the bulky Mag Stripe readers.
Remember way back when Apple’s entry into the smartphone market was given a slim chance by industry pundits? How could they compete in a market place then dominated by other more prominent companies such as Blackberry, Nokia and Handspring? Apple’s target when the iPhone was introduced was to sell 1 million phones into a smartphone market that was then at a 10 million unit installed base, dominated by the brands previously mentioned and attracting potent new Japanese, Korean and Taiwanese competitors. An aggressive 10 percent market share in one year? …Bah, said the industry experts — Apple doesn’t understand the market and doesn’t have a business relationship with any carrier companies — never happen.
Apple hit that mark in under nine months and never looked back in the years since, changing the industry landscape and the sourcing picture for mobile electronics along the way.
In the case of finger print recognition, an area I’ve been directly involved with in years past, it is a great choice for personal computing devices where the owner is the primary access party — a one to one match-up of finger print on a scanner to a data base of one finger print as a access key. As a secure access device for personal and general workplace devices where huge markets exist for foolproof systems, the technology currently has low utilization. This situation is led to higher than acceptable error rates driven by the recognition limitations of the technology such as read distortion. This is often caused by a simple a build-up of body oil contaminants on the reader image surface and the mobile device’s ability to do a real time comparison to a clear finger pattern with the available finger print data bases (law enforcement, company personnel files, etc.).
That said, Apple is famous for working through problems like these when an untapped market opportunity exists. So keep an eye on future offerings like finger print recognition and think how your product might take advantage of their progress.
So what about displays?
Well, Steve Jobs always had a talent for determining what it is a consumer really wants in a device (aided by an extraordinary talent for self promotion and marketing I might add). His pronouncement regarding what drives display technology is interesting, compelling and definitely not based on dry industry statistics that require an engineering degree to understand what they mean in human terms.
According to Wikipedia, when introducing the iPhone 4, Steve Jobs said, “The magic number for a Retina display is about 300 PPI for a device held 10 to 12 inches from the eye. One way of expressing this as a unit is Pixels Per Degree (PPD) which takes into account both the screen resolution and the distance from which the device is viewed. Based on Jobs’ magic number of 300, the threshold for a Retina Display starts at a PPD value of 53. 53 PPD. That means that a tall skinny triangle with a height equal to the viewing distance and a top angle of one degree will have a base on the device’s screen that covers 53 pixels. Any display’s viewing quality (from phone displays to huge projectors) can be described with this size-independent universal parameter.”
So while we will have to wait until the new iPhone 6 is available to see if we can discern a new display standard, what I can say is that Apple is a sure bet to drive better and more user-oriented technologies into the mainstream. Best of all, it’s based on human perception and need — not on what is easy for component technology companies who often “one-up” each other in the usual spec wars, with “improvements” that often have no meaning to the average user.
Again, Apple’s history in pushing this humanistic perspective into technical spec-driven industries is legendary. It also often leads to new markets and big businesses (think desktop publishing as an example).
[I was a product manager in Apple’s peripheral products division when Steve Jobs was pushing laser printers because of their superior image quality. PPD managers at the time favored dot matrix printers because the industry accepted metric of the day was cost per page –an impact printer’s was $.03 and the laser writer’s was $0.25 per page. Steve got his way, the desk top printer industry was born and laser printer quality became the accepted industry standard.]
So, while I admire Apple for their product offerings, I admire them more for the technologies they commoditize and make available for those of us helping other companies to improve their product offerings where cost of goods is pivotal to revenue generation, profit margins and overall company performance.