Apple’s Product Portfolio Management

Apple's Product Portfolio Management (1)

What product management might learn from tomorrow’s announcementAt 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.

Apple's Product Portfolio Management (2)

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.

Apple's Product Portfolio Management (3)Apple's Product Portfolio Management (4)

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).

Apple's Product Portfolio Management (1)

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.

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