No rosy future for Apple? Say it isn't so –

I'm a huge fan of Apple Computer. I love everything about them. So it was with great dismay I read BIF Research Advisor Clay Christensen's recent interview with Business Week outlining his case for why Apple is destined to fail, again.

Apple's strategy is based on proprietary technology. And for anyone who has ever read Clay's book, The Innovator's Solution, you know that in the long-term, this strategy spells certain doom for the industry leader.

It’s an odd and challenging place to be – as an incumbent with huge competitive advantage, your market share is growing, your stock is climbing, yet on the horizon looms the threat of industry standardization and product modularity that will eventually erode your dominant position.

Apple’s been in this spot before – losing valuable ground when companies like IBM and Compaq entered the PC world.

So what can Apple do now? Clay argues that Apple should open up their architecture now and get iTunes inside every MP3 player. Otherwise, he says, “they’re going to have to keep coming up with the next cool thing.”

Or, maybe that is their play—a continued focus on developing new markets, new products. Then introduce them to the world, make tons money and move on to the next great innovation.

What do you think? If I work at Apple, the former seems so much more appealing. But is it a viable business model?

For more information on Clay’s theory about modularity, the folks over at the Innosight blog suggest reading “Skate to Wear the Money Will Be,” HBR, 2001 and Chapter 5 in The Innovator’s Solution.