In 2001, Apple launched the Ipod, one of the most successful consumer electronics products in history. Ever since it has completely dominated the mp3 player market. When people look at the phenomenal success of the Ipod, a lot of questions come to mind. So, how did Apple come up with Ipod's revolutionary design that became the de-facto dominant design in the mp3 market? How many Apple employees worked on this innovative product and for how long?
Well, as it turns out, Apple was not alone in the development of the Ipod. Open Innovation came to the rescue! In fact, Apple was not even responsible for the initial product design. It is a little-known fact that Tony Fadell is the name behind the initial conceptualization of the iPod. Tony Fadell was a former employee of General Magic and Phillips who wanted to invent a better MP3 player. After being turned down by RealNetworks and Phillips, Fadell found support for his project in Apple and within 8 weeks he was able to develop a complete Ipod/iTunes product solution. Apple then hired Fadell in 2001 as an independent contractor to create and lead a team of thirty-five people from Philips, IDEO, General Magic, Apple, Connectix and WebTV to develop the Ipod. PortalPlayer, another company, was in charge of the technical design and Apple was responsible for developing the user interface and design. Within 6 months the product was released to the market. And the rest is history. (Click here to listen to Michael Docherty, founder of Venture2, who explains in more detail the whole story behind the iPod's development and open innovation.)
Some people might rightly argue that the Ipod/Itunes product solution is a closed system, true to Apple's design philosophy. The truth of the matter though, and what is important for us, is that the Ipod/Itunes is probably the most successful example of open innovation in practice.
Apple took a risk with Tony Fadell's idea that really paid off. Apple decided to innovate by using external ideas, rather than trying to invent an mp3 player from scratch. Of course, Tony Fadell's persistence was also remarkable. After a number of organizations rejected his idea, he was not discouraged and approached Apple. And the end result was really amazing.
How many big organizations nowadays are ready to do what Apple did back in 2001 and invest in an idea beyond their boundaries? What other successful open innovation examples are you aware of? Any of them as important and well-known as the Ipod? Please let us know.
The Open Innovation Team!
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