This is a well-known story but I think this article highlights two critical aspects of Apples’ success ve Microsoft:
• Having a vision matters and having the “right” one is absolutely critical
• You must cannibalize success to continue to drive future growth. We discussed this in our Org Growth class re Rita McGrath's Wave of Transient Advantage--Over emphases on “Exploitation of existing strength” will result in hitting the Stall Point
IT IS ALL ABOUT LEADERSHIP
When Microsoft stock was at a record high in 1999, and its market capitalization was nearly $620 billion, the notion that Apple Computer would ever be bigger — let alone twice as big — was laughable. Apple was teetering on bankruptcy. And Microsoft’s operating system was so dominant in personal computers, then the center of the technology universe, that the government deemed the company an unlawful monopoly. This week, both Microsoft and Apple unveiled their latest earnings, and the once unthinkable became reality: Apple’s market capitalization hit $683 billion, more than double Microsoft’s current value of $338 billion....
....The most successful companies need a vision, and both Apple and Microsoft have one. But Apple’s was more radical and, as it turns out, more farsighted. Microsoft foresaw a computer on every person’s desk, a radical idea when IBM mainframes took up entire rooms. But Apple went a big step further: Its vision was a computer in every pocket. That computer also just happened to be a phone, the most ubiquitous consumer device in the world. ...
..Like many successful companies, Microsoft nurtured its dominant position, but at the risk of missing potentially disruptive innovations. “You have to acknowledge that Microsoft has been successful and it still is,” said Robert Cihra, a senior managing director and technology analyst at Evercore. “But clearly, they’ve struggled over how to protect the Windows franchise while not having that hold them back in other areas. I think even Microsoft would agree that they’ve been too concerned with protecting Windows over the years, to their detriment.” By contrast, “Steve ingrained in the DNA of Apple not to be afraid to cannibalize itself,” Mr. Isaacson said. “When the iPod was printing money, he said that someday the people making phones will figure out they can put music on phones. We have to do that first. Now, what you’re seeing is that the bigger iPhone may be hurting sales of iPads, but it was the right thing to do.” Mr. Cihra agreed: “Apple laid waste to its iPod business. They’re happier selling 74.5 million iPhones than they would be even if they still were selling that many iPods, which they wouldn’t be anyway because someone else would have cannibalized them.” .