Lovingly annotated.

http://www.youtube.com/watch?v=t4OEsI0Sc_s

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So much so that anyone who appeared to have changed their design values after the iPhone 1 launch has faced intense, prolonged litigation with Apple. While others were moving in the direction of the iPhone, Apple did it first, an indisputable bar.

One of Microsoft’s chief motivations in its acquisition of Nokia is the existing user base opened up to the tech giant. Now, when Microsoft launches a new mobile operating system, it can start with subscribers, rather than generating them from day one.

The long game sheds innovation and zero-day success (the “next big thing” approach) for broad adoption. When innovation can no longer propel a company to success, it must gain worldwide appeal to stay relevant and drive sales.

Update: The Atlantic takes the same approach, but to a different conclusion. This lack of innovation threatens Apple’s core existence.

The addition of Japanese and Chinese markets alone can dramatically swing Apple’s market share upward. Combined with the lower price ($99 for the base model) and color palette, it is engineered to be cheap and flashy, appealing across the world. The current iPhone user base appears to be missing the point: Apple, for half of its division, no longer cares about innovation and aesthetics. Adoption is the new key.

The Lumia, Nokia’s flagship, is a great comparison. The phone’s bizarre endless screen, coupled with a bright range of colors, made it trendy. It sounds juvenile, but the Lumia nearly singlehandedly saved Nokia, selling a remarkable 13 million phones in the first two quarters of 2013 alone.

Apple does sit in an interesting position: with unheard of cash assets, a revenue rivaled only by petroleum companies, and a computing empire shadowing traditional market agents, the company can afford a 6% drop. Investors will remain, shareholders or not, allowing Apple a remarkable degree of freedom for a company of its size. It simply will continue to be healthy, so long as it advances.

Essentially, because Android was easy to access, as opposed to iOS, it created a stable platform from which developers could really experiment. As a result, Google’s Nexus models in particular began to rival the design cues and innovation standards of even Apple.

Android today holds nearly 80% of smartphone deliveries, a radical shift from even 2011.

Jar-Jar Binks aside…

“The complexity for minimum component costs has increased at a rate of roughly a factor of two per year. Certainly over the short term this rate can be expected to continue, if not to increase. Over the longer term, the rate of increase is a bit more uncertain, although there is no reason to believe it will not remain nearly constant for at least 10 years. That means by 1975, the number of components per integrated circuit for minimum cost will be 65,000. I believe that such a large circuit can be built on a single wafer”

Eventually, transistors will be too small to practically exist, a critical point when the industry as-is will have to shift. When transistors enter the atomic size level, further reductions in size are, at least now, impossible. Likewise, Apple’s innovation has reached a critical mass, when the company can never again meet investor demands for more and more radical approaches.

This point in particular is damning for Apple. Risky innovation could deliver the desired change, but also risks being too radical. Apple then loses.