Apple and disruptive products

It looks like pretty much everybody has been disappointed by Steve Jobs' performance at MacWorld this January. Sure, he announced some cool products, but nothing groundbreaking. Wall Street was so not impressed that the stock took a hit.

To be fair, it was difficult to top last year's iPhone announcement. That's the downside of a taking everyone by surprise. Everyone after that such high and unrealistic expectations that you're almost certain to disappoint. And Wall Street sure has a reputation of easily having unrealistic expectations. But there is also one big difference this year: the announcements were mostly Mac-centric. Apart from the Apple TV that says goodbye to its connection to the computer (read: the Mac), the big products are the Time Capsule (a Mac backup device) and of course the MacBook Air.

If the Mac products are generally pretty cool, they don't generate the sale nor the buzz Apple needs to keep its revenue line and mind share. That's what Apple's non-Mac products can do. The iPod accounts for 25 to 50% of the company's revenue, and the iPhone has had everybody talking about Apple much more than any recent Mac product.

None of the products I've said Apple could come up with were announced. No Apple TV that allow you to browse the Web, nor a dockstation transforming your iPhone into a full-fledged laptop. Maybe Apple isn't ready yet. But maybe it's something else. In this week's column, Bob Gringely wrote the following:

"If you could buy a Mac that attaches to your HDTV for web surfing as well as all the other Apple TV functions, even at the original $299 price, it would have been a HUGE hit. But it might also have hurt Mac Mini and iMac sales, so Steve couldn't bring himself to do it."

I'm glad Bob Cringely agrees with me, but his other comment made me realize that Apple might NOT be interested in releasing those products because those are DISRUPTIVE products. They threaten to cannibalize Mac sales without bringing in as much revenue.

A $300 Apple TV-turned-Web appliance would indeed compete with the $600+ Mac Mini or even a $1200 iMac for those who have limited needs and crave Apple's legendary user-friendliness. Likewise, a $400 iPhone with a $??? "laptop dockstation" would compete with $1100+ MacBooks.

Very few companies are able to successfully cope with disruptive innovations, and Apple doesn't look to be part of the lucky few. If Steve Jobs has been ready to introduce non-Mac products (the iPod, the iPhone and the Apple TV), they've always been complementary to the Mac. At the very least Steve agreed they could be neutral. The Apple TV and the iPod Touch can now download music and movies directly from the Web without the need of a computer. But none of these products are running the risk to threaten Mac sales.

Apple has created a great mobile platform with the MacOS X embedded in the iPhone. And one day the embedded platforms will grow up to a point where they start competing with full-fledged computers. But it is entirely possible that Steve Jobs won't let his own embedded platform grow for fear it begins to compete too much with the Mac. Just like we've seen the innovations in the PDA market plateau since Microsoft won the market (hey, they don't want them to hurt Windows sales).

Maybe Apple will introduce disruptive products in 2008. But maybe Steve Jobs is so tied to the Mac it won't let any other product hurt it. If that's the case, the Mac might become a liability for its own company.