OCTOBER 12, 2004
VOICES OF THE INNOVATORS

The Seed of Apple's Innovation
[Page 2 of 2]

Q: With the iPod, Apple moved beyond the PC into consumer electronics. But you're still considered a niche player that picks its spots in bigger markets. Will you try to expand to become a more full-line player, like a Sony (SNE ) or Samsung?
A:
The fact that you're comparing us to Sony is a statement in itself. I'm flattered. We really respect those guys and what they've accomplished over the years. But we're just trying to make great products. We do things where we feel we can make a significant contribution. That's one of my other beliefs.


I've always wanted to own and control the primary technology in everything we do. Take audio. For years, the primary technology was the [marking mechanism] inside a CD or a DVD player. But we became convinced that software was going to be the primary technology, and we're a pretty good software company.

So we developed iTunes [Apple's music jukebox software that later morphed into the iTunes Music Store]. We're a good hardware company, too, but we're really good at software. So that led us to believe that we had a chance to reinvent the music business, and we did.

Q: Many people say we're in a period in which advances in various digital technologies -- from drives to chips to screens to networking gear -- is going to change the nature of innovation. Rather than inventing something from scratch, innovation will be the art of putting all of these capabilities together in new ways.
A:
Of course, you're never going to invent everything. But what's the primary technology? And what's the concept of the product? Where does the conceptualization come from? I guarantee the 1.8-inch hard drive was not invented for iPods. But that's not the primary technology in an iPod.

Q: How do you systematize innovation?
A:
The system is that there is no system. That doesn't mean we don't have process. Apple is a very disciplined company, and we have great processes. But that's not what it's about. Process makes you more efficient.

But innovation comes from people meeting up in the hallways or calling each other at 10:30 at night with a new idea, or because they realized something that shoots holes in how we've been thinking about a problem. It's ad hoc meetings of six people called by someone who thinks he has figured out the coolest new thing ever and who wants to know what other people think of his idea.

And it comes from saying no to 1,000 things to make sure we don't get on the wrong track or try to do too much. We're always thinking about new markets we could enter, but it's only by saying no that you can concentrate on the things that are really important.

Q: How much do you have to do with Apple's innovations?
A:
We go back and forth a lot as we work on our projects. And we've got such great people [in the top executive team] that I've been able to move about half of the day-to-day management of the company to them, so I can spend half my time on the new stuff, like the retail effort. I spent and continue to spend a lot of time on that. And I meet weekly for two or three hours with my OS X team. And there's the group doing our iLife applications.

So I get to spend my time on the forward-looking stuff. My top executives take half the other work off my plate. They love it, and I love it.

Q: So the key is to have good people with passion for excellence.
A:
When I got back here, Apple had forgotten who we were. Remember that "Think Different" ad campaign we ran [featuring great innovators from Einstein to Muhammad Ali to Gandhi]. It was certainly for customers to some degree, but it was even more for Apple itself.

You can tell a lot about a person by who his or her heroes are. That ad was to remind us of who our heroes are and who we are. We forgot that for a while. Companies sometimes forget who they are. Sometimes they remember again, and sometimes they don't.

Fortunately, we woke up. And we're on a really good track. We may not be the richest guy in the graveyard at the end of the day, but we're the best at what we do. And Apple is doing the best work in its history. I really believe that. And there's a lot more coming.

Q: You're back at work on a part-time basis. Are you going to come back full-time?
A:
Yes. That was one of the things that came out most clearly from this whole experience [with cancer]. I realized that I love my life. I really do. I've got the greatest family in the world, and I've got my work. And that's pretty much all I do. I don't socialize much or go to conferences. I love my family, and I love running Apple, and I love Pixar. And I get to do that. I'm very lucky.

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