Apple’s Product Portfolio Management

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What product management might learn from tomorrow’s announcement

At 10:00 AM, September 7, 2016, Apple will have their annual September product announcement.  

By annual, I mean, that they seem to have gotten on a “time-based product roadmap,” as opposed to announcing when the “product is ready” scheduling basis. I say this because there has been a September announcement for iPhones every year for the past five years.  

I also suspect their somewhat regular, but late October announcements, might be move up to tomorrow, so they don’t repeat the low inventory or lack of shipments for new products for the Christmas selling season again. Remember, a few years ago, they announced a new iMac, but were not able to ship in volume until after the holidays? That revenue impact attracted investor attention with concern about Apple’s long-term viability.

It is also expected they will be announcing a new Apple Watch tomorrow.

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This is on the heels of supply channel reports that the inventory Apple Watches and iPad 2 Airs have been depleted and rumors of new MacIntosh Airs or replacements.

If true, this suggests there might be new introductions across the iPhone, iPad, Apple Watch and Macintosh product lines.

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These announcements might be significant for Apple’s product portfolio management in 2 ways:

Apple has been criticized in the past for:

  1. Relying too heavily on the iPhone product line revenue
  2. Not innovating

Let’s take a look at each in comparison to tomorrow’s announcements:

1.  Product Portfolio Management

Good product portfolio management means a company has products at each stage of the product lifecycle:Risk, Revenue Maximization, Revenue Smoothing and Competition Blocking.  The purpose is to provide a reduction in risk, maximization of revenue, distribution of revenue and to not make the entire company susceptible to peaks and valleys in overall revenue and/or in one product or product line. (The Apple Watch announcement months before shipment might have been for competition blocking and image polishing reasons).

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While iPhone and iPad sales have been shrinking year-over-year, Mac sales have just started declining after over a dozen and a half quarters of increasing sales.  The Apple Watch is just at the beginning of its adoption with major value propositions for people interested in fitness, health and style.  As more value propositions are added, the Apple Watch should increase in sales and start penetrating the market beyond just early adopters.

  1. The multiple product line announcements tomorrow, might also reflect Tim Cook’s management style from his education and experience in supply side management.  His calm demeanor and management style probably has most things planned out, scheduled and contains superb SWOT analysis to have alternative plans if problems occur.
  2. This is in contrast with Steve Job’s tendency to be spontaneous and impulsive which might conflict a bit with good portfolio product management which has each product/product line complementing the others resulting in steady, overall revenue growth.

Using the supply chain inventory as a leading indicator for future product introductions must also be a new metric to watch.  I use to watch semiconductor shipments, when forecasting the PC market when I was a DataQuest.  I found from my sister Semiconductor Industry Service to my PC Industry Service, that shipments there were about nine months ahead of PC sales.  My forecasts turned out to be pretty good as a result.

2.  Innovation.  

If updating all of their major product lines at one time is not innovating, then I don’t know what is.  

Innovation, some people believe, is only “new” products perhaps in a new market.  But updating, improving, and transforming existing products is innovation too.  Its incremental revolution. In fact, most innovation is the later not the former.  

Tim Cook has mentioned in several interviews over the past several years that Apple’s innovation pipeline is full.  

Tomorrow’s announcement might be a demonstration of that fact. Plus the continuing maturing of Apple’s product lifecycle management to consider good product portfolio management.

Process maturity and product portfolio management are two things all who are involved in product management should strive to achieve.

2016-12-01T12:12:13+00:00

About the Author:

Go to https://dfradin.youcanbook.me, to schedule a time to talk. David Fradin has trained thousands of managers throughout the world in the successful management of products. With over 47 years of experience across major companies, 75+ products and services and 11 startups, he infuses his workshops with insights gained as an expert product leader, product manager and product marketing manager at companies like Apple and HP. He was classically trained as an HP Product Manager and was then recruited by Apple to bring the first hard disk drive on a PC to market. As a result of his leadership and management skills, Apple promoted him first to Apple /// Group Product Manager and later Business Unit Manager at the same organizational level at that time as Steve Jobs. He recently authored “Building Insanely Great Products: Some Products Fail, Many Succeed…This is their Story” Lessons from 47 years of experience including Hewlett-Packard, Apple, 75 products, and 11 startups later. Go to: http://amzn.to/2lyRhn7 Coming soon will be "Organizing and Managing Insanely Great Products" and "Marketing Insanely Great Products." His workshops cover the founding values, vision, product lifecycle and management employed by Apple at its start and which it subscribes to today. You can learn more about his workshops at https://spicecatalyst.com/get-brochure-professional-development-training-courses-description/ Soon to be released by Wiley and Sons, in the Early of 2017, is a seven volume set of university level textbooks entitled: "Foundations in the Management of Successful Products" covering keys to product success, product market strategy, marketing, soft skills, user experience, user interface, product engineering, and product support. What students will learn in the workshops, online courses and books are cover what has made Apple the most valuable company in the world today.

2 Comments

  1. Jeff September 6, 2016 at 2:49 pm - Reply

    Product management is not actually a thing at Apple, Inc. – in spite of Phil Schiller’s actual title. And that worked with Steve Jobs micro-managing (except iClod) Whiteout sj being the mother-of-all product managers, the engineers make all sorts of product changing decisions that negatively impact the customers. The feature-robbing release of FinalCut Pro was the earliest example, then iPhoto defeaturiing, then Apple Airport wireless routers lobotomy, and releasing a MacBook that has exactly one port (including charging!) and will we be able to both connect the new iPhone to existing ear buds _and_ charge that iPhone at the same time?

    True PRDs and MRDs matter.

    • David Fradin September 6, 2016 at 3:07 pm - Reply

      I don’t quite agree with Jeff.

      Phil Schiller’s title revolves more around what I would call “product marketing manager.”

      I know a number of people at Apple with the title Product Manager (Even one of the Final Cut Pro product managers), but even with that title, they may not have as part of their job description to clearly understand what their customers want to “do.” See the blog posts here on “Do” and the Apple Watch.

      Failure to do that, no matter what the product is or who is responsible for it, significantly enhances the chances of product failure. You cite several good examples, but there are also many examples where the people at Apple do a good job of understanding the “do” and their products are quite successful.

      The USB-C port on the MacBook and possibly no mini-jack for the earphones might be as groundbreaking as was the elimination of the floppy drive, the DVD, the lack of a stylus for the iPad, and no physical typing pads for the iPhone. Those things were roundly criticized at the time but proved to be good decisions.

      If an “agile” process and/or PRD/MRD takes into account what people “do,” then those products will most likely succeed. The product lifecycle process followed is not as important.

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