Lessons from Apple’s Mistake: Create Innovative Products for Sales, Not for Innovation

You don’t need to be a particularly gifted manager to understand that a high-tech gadget you decide to sell for $3,500 will not capture a wider audience, nor will it sell like hotcakes. Since it is aimed at a niche audience, early adopters with deeper pockets interested in products that are the latest in technology, you will set your sales plan modestly from the start, but be confident that you will achieve it. After all, it is a premium product, and you are a premium company known for quality and innovation.

However, despite this realistic scenario, tech giant Apple has, with its Vision PRO VR augmented reality glasses, completely underperformed. Namely, its sales strategists have revised their sales projections and now hope to sell around 400 thousand glasses by the end of the year instead of the planned 700 to 800 thousand. In the first ten days after launch, Apple sold 200 thousand Vision Pros, and then demand began to plummet sharply, and judging by media headlines and user reviews, the company has little to look forward to next year.

The first problem is that the product did not satisfy the appetites of new technology enthusiasts, as some reviewers state that the glasses are too expensive, uncomfortable to wear, and lack key applications like Netflix and Spotify. The second and, as marketing expert and The Drum columnist Sam Scott argues, even bigger problem is that Apple’s latest innovation, in marketing terms, is too product-oriented and too little market-oriented. Or, as Forbes nicely summarized, ‘Apple Vision Pro is great, but no one wants it.’

Types of Orientation

To prevent other brands from repeating the mistake that will cost Apple 1.4 billion dollars, Scott attempted in his column for The Drum to answer the question of what principles, or orientations, companies can follow in business, what market orientation is, and why it is the best choice, especially when a company launches a new product. As this marketing expert writes, the goal of every company is to maximize its value to stakeholders or, in short, to achieve the highest profit. For this to happen, they need to know what their orientation is, which he defines as the leading principle or approach to business. Companies can thus be driven by a sales principle or be sale-oriented, which would mean that their life or death depends on the success of the sales department.

The good thing about such companies is that their greatest asset is a quality sales team (from telemarketers to sales representatives), and the worst is that such teams are expensive, but also that it takes time to train them (and time is money, etc.). Comms-oriented or companies whose success is closely tied to the marketing department usually sell products that are very similar to competitors’, so the task of marketers and communication professionals is to create a recognizable, strong brand. These companies most often operate in the FMCG sector, and to illustrate how their business looks in practice, it is enough to think of brands of bottled water or fast-food chains.

In contrast to those companies whose strength is identified with brand strength, competitor-oriented companies depend on the information they learn about the competition. They invest heavily in market research, trying to find out what the competition is planning, where they intend to open a store, or what product they intend to launch, all to outpace them or do something better, smarter. However, as Scott warns, a strategy that is practically based on the moves of the competition will not bring the company to the top; it will always be inferior. Companies like Shein do something similar – they copy someone else’s design and gain a competitive advantage by brutally cutting prices.

The Best Choice

And of course, there are product-oriented and market-oriented companies, and it is precisely in finding the right balance between these two principles that the famous Apple has stumbled with its augmented reality glasses. As Scott explains, the most innovative, creative, and often the most successful companies are often in the category of product-oriented. If they manage to launch a sufficiently innovative product, they often become leaders and transformers of entire industries, as Facebook, Microsoft, and of course, Apple once were. The downside of such an approach is that they often launch products that only they think someone wants. As Scott claims, startups that want to grow based on an innovative product often do not research the market sufficiently and segment it using an insufficiently thorough model of ‘ideal customer profile’ (ICP), which can hinder long-term success.

Market-oriented companies, on the other hand, base their growth on how well they know their target audience, the market: they conduct quantitative and qualitative research, deeply analyze individual consumer segments, based on the data obtained decide how to position themselves precisely, and only then define the famous 4P – product, price, distribution, and promotion. Such orientation guarantees long-term success more than all the previously mentioned, but it is also the most complex. Also, in practice, companies that use only one principle are rarely found, and Apple is one of them. Namely, unlike classic tech startups, Apple has always combined market and product principles in its business, and which of the two will dominate has changed over the years.

As everyone knows, Apple launched the first personal computer in the seventies, the first MP3 player, the iPod, at the beginning of the millennium, and the first smartphone, the iPhone, in 2007. After the death of Steve Jobs, the company turned more towards the market principle, creating what they called the ‘experience ecosystem’, creating a community of brand evangelists and marketing strategies based on specific consumer segments, rather than necessarily products.

The Giant Got Lost

However, with the Vision Pro glasses, Apple seems to have gotten a bit lost. They are indeed an innovative and, in fact, great product, but, to put it mildly, specific. Unlike the iPod or iPhone, which are practical (innovations that fit in your pocket), few want to wear bulky, strange glasses on their noses. The product itself, therefore, cannot (in its current form and price) be attractive to a wide audience. On the other hand, they have a market that is not ‘to be thrown away’, but is narrow and niche. Such a product is extremely interesting to gamers, but also to players in the health and education industries.

The potential exists, behind the glasses stands the powerful Apple, but it seems they need to decide whether to base growth on the market (niche) or the product. If they choose the latter, the product will have to drastically change to make it appealing to the masses. A market approach would be smarter, but in that case, they must deal more thoroughly with the target group. Thus, as Scott concludes, for success, it is crucial, to begin with, to know what the leading principle is, what the orientation is, and then give their all (that is the message to managers) to turn it into market-oriented or at least to have that principle dominate in business.

The Drum columnist also revealed how marketers can find out what kind of company they are dealing with. In all companies, more or less, the finance, sales, research and development, and even customer support departments have the same task, while marketing is the only business function that varies from company to company and is defined by its general orientation.

Marketers in product-oriented companies are interested in products, in communication brands, and in competition-oriented companies, the moves of the competition. Likewise, if marketing has to deliver results to a member of the management for sales, it is a sales company, and if to the product development department, it is a production one… Although it is unclear to whom the accounts of certain departments in Apple are currently submitted, the fact is that due to the Vision Pro, they will have to find much more than just answers to that question. A lesson of $1.4 billion is too much even for a giant like Apple.