When forcing market change is a good strategy

It has happened again. Tech bloggers are mourning the loss of yet another technology that Apple has mercilessly thrown out of one of its devices.

This time it is the 3.5mm audio jack, a 138-year-old technology that allows users to connect any type of wired headphones to their iPhone to listen to their music.

The alternative will be the AirPods, wireless headphones that will connect seamlessly with the device.

However, conspiracy theories abound that a world without wires is actually an attempt by Apple to tether us further to its technology and products.

Apple says its decision is characterised by “courage”.

It rightfully points out that customers want more battery power, better screens, better speakers, sharper cameras and faster processors — all of which are competing for space inside the same enclosure. Still, the techies are not hearing it.

However, I would posit that it is not the techies that Apple is trying to please here.

It is regular people — “the rest of us”, like Apple promised in its famous 1984 Macintosh ads.

Most iPhone users like the iPhone because it just works. It is simple, but its functionality is high and valuable.

Many users are tired of pulling their tangled and mangled headphones out of their pocket and handbags, then struggling to put them right for five minutes — not to mention the very real strife of jogging with wires all over the place.

It is high time we lost the wire, but the removal of the audio jack is about more than the elimination of a humble analogue technology.

It is also a lesson in making innovations succeed by changing the market, instead of trying to respond to it.

FIRST MOVER

Apple has been at the forefront of removing old technologies before.

It was the first computer-maker to take out the compact disc (CD) drive from its Macbook computers, making the Macbook Air the thinnest laptop on the market. Later it killed the 30-pin connector USB cable in favour of Lightning.

At each stage it has arguably helped customers make the transition to its new technologies, albeit at a cost.

For those still in need of the use of CDs, customers could buy an external disk drive to plug into their laptops.

Customers not able or willing to upgrade to a device with a Lightning port could also buy an adaptor for their 30-pin connector.

As the underdog computer-maker in its early years, it was easier to take the risk of radical changes. It is refreshing to see that Apple, as a leader today, has not lost its appetite for taking risks.

There are always gripes about the extra money customers have to fork out for the kit needed to bridge the new technology, but eventually the customer comes around to Apple’s way of thinking, mainly because it adds value along the way.

This dynamic is reflected in the principles of Insead’s Blue Ocean Strategy, which states that key to value innovation is the ability of companies to make products easier to use so that consumers embrace the innovative changes.

As we have seen before, Apple is good at changing consumer behaviour because it knows how to make life easier for them.

AirPods last longer and are easier to charge than other wireless headphones. But the bigger innovation is the simplification of the pairing with the phone.

They connect automatically to the phone when they are out of the pouch, and the phone recognises when you wear them in your ears to send the sound to the right output.

To be sure, there will always be some consumers resistant to change. For one, unlike headphones, the AirPods do not come free with the iPhones.

They will get an adaptor to help them make the transition instead. This might make the transition a longer one, but it seems likely to happen in the end.

Apple’s transition to wireless music started with its acquisition of Beats and its range of Bluetooth headsets, which make listening to music while travelling and running a breeze.

The AirPods are a way to mainstream this technology and behaviour, increasing the usability of Apple devices, especially when exercising.

The company’s interest in health and wellness is well known. The Apple Watch carries a heart rate monitor as well as step and sleep tracking.

It is highly likely that the AirPods plus the Watch will become the only companion a jogger needs, leaving the phone for other functions, especially since the Watch can hold a music library of its own and carry out GPS tracking in the new Apple/Nike Watch version.

True, the AirPods are missing noise-cancellation technology like more-advanced headphones on the market, such as Beats.

But as I mentioned earlier, Apple is aiming to change the general consumer, not the music connoisseur.

Furthermore, this could be intentional. Apple often leaves out features in initial launches (for example, the first iPad had no camera even though the space was ready).

This reduces complexity, and with that, unwanted surprises such as bugs, errors or defects.

It also means the updated version is already designed.

It is therefore not a question of what to launch, but when to launch it. That is partly how Apple keeps its momentum going.

One could argue that Apple is trying to offset declining sales of its iPhone, and the AirPods will prop up sales of its “other” category, which includes the Watch and iPod.

Either way, the company is leading the way yet again — not with breakthrough technology, but with a solution that is user friendly and intuitive.

It is thus safe to assume that Apple’s customers are likely to get on board with it, especially those increasingly interested in health and wellness.

ABOUT THE AUTHOR:

Markus Christen is an Associate Professor of Marketing at INSEAD and the chair of the Marketing Area at the school. This piece first appeared in INSEAD Knowledge.