On January 24th, 1984, Apple unveiled its Macintosh, two days after its famous Super Bowl commercial directed by Ridley Scott had portrayed a dystopian, grey conformist future, with a female athlete smashing the giant screen with a hammer throw. The ad was aimed at IBM’s dominance of the home and business computer market, and the Macintosh was the first mass-market personal computer that featured a graphical user interface, built-in screen and mouse.
It was the first of a series of Apple challenges to conventional markets by the introduction of innovative products. Still in the future lay the iPod, the iPhone, the iPad and the iMac. The approach provides an illustration of the way in which innovation can challenge complacency and displace market leaders. People who attack the market dominance of brand leaders fail to appreciate their vulnerability. Many of the big names that once seemed so dominant are now remembered only for their downfall. Failure to adapt to changing technology or changing tastes has brought down many one-time giants, ranging from Woolworths to Pan American, and from Blockbuster to Kodak, together with many, many more.
Most of the top names of the FTSE 100 of half a century ago are no longer with us, and the average age of an S&P 500 company in America is now 20 years, down from 60 years in the 1950s. Churn and change characterize the market, rather than continuing long-term dominance. In November Jeff Bezos predicted that Amazon will one day go bankrupt, and told the firm to “stay hungry” to postpone that day.
The market system thrives on the “creative destruction” that new ideas wreak on established players and practices. It is what makes us richer by providing products and processes that meet more of our needs. Apple has been a trailblazer in this respect and has earned its accolades.