During Apple’s Q1 earnings call in 2013, Tim Cook spoke a little about the company’s philosophy when it comes to launching new products that cannibalise the sales of established ones.
Their position is clear: focus on dominating future markets not servicing existing ones. If you don’t, you leave room for a competitor to disrupt you.
“I see cannibalization as a huge opportunity for us. Our core philosophy is to never fear cannibalization. If we don’t do it, someone else will. We know that iPhone has cannibalized some of our iPod business. That doesn’t worry us. We know that iPad will cannibalize some Macs. But that’s not a concern. On iPad in particular, we have the mother of all opportunities because the Windows market is much, much larger than the Mac market. It is clear that it is already cannibalizing some. I still believe the tablet market will be larger than the PC market at some point. You can see by the growth in tablets and pressure on PCs that those lines are beginning to converge.”
For me, the most important thing here is that this a central, company-wide principle. In companies that do not hold the same ideology, the culture grows to focus on servicing existing money makers.
Without meaning to make this an Apple vs Microsoft thing, it’s interesting to compare this standpoint to the position of Steve Ballmer at CES in 2012:
“Nothing is more important at Microsoft than Windows.”
While this is (to a large extent) true, it also highlights a very different approach. It places emphasis on the company’s current market leading product rather than trying to create the technology that disrupts it.