Can Steve Jobs Learn From Henry Ford's Mistake?

Back when his company dominated the auto industry, Henry Ford infamously quipped that his customers could have a car from Ford painted in any color … as long as the color was black. Old Henry ended up ruing those words, and the business attitude they implied, as a rival manufacturer by the name of General Motors usurped Ford's top-dog status in the auto world by offering cars in a far greater variety of shapes and colors and quickly revamping those designs from one year to the next.

We can only hope for Apple's (Nasdaq: AAPL  ) sake that Steve Jobs isn't remembered for making a similar error: offering the iPhone and the iPad in one particular model type each year, while rival Google (Nasdaq: GOOG  ) has Android phones and tablets catering to the diverse tastes of consumers through a variety of designs and associated feature sets.

It wasn't too long ago that most Android phones looked a lot like the iPhone, just with some additional controls at the bottom and maybe a slide-out keyboard attached. But with untold millions (billions?) of R&D money having been poured into Android phone designs over the last two years, the situation is starting to look much different. Since last June, we've seen:

  • The release of oversized Android models such as Motorola Mobility's (NYSE: MMI  ) Droid X and HTC's EVO, whose 4.3-inch displays dwarf the iPhone's 3.5-inch screen.
  • Motorola and AT&T's (NYSE: T  ) announcement of the Atrix, which can attach to a laptop-like docking station.
  • Sony Ericsson's announcement of the Xperia Play. Expected to be offered by Verizon (NYSE: VZ  ) , the phone features PlayStation-like controls that can be used to play a custom set of games.
  • A leaked commercial showcasing the LG Optimus 3D, which features a glasses-free 3D display. 
  • Sprint (NYSE: S  ) and Kyocera's introduction this week of the Echo, which contains two 3.5-inch displays that can be used together as a single 4.7-inch display.

A skeptic might argue that a lot of these differentiating features are things that the average smartphone buyer doesn't want, or at least hasn't shown that he or she wants. A 4.3-inch display is overkill for many; most users would prefer a netbook or tablet to a docking station; 3D displays are unproven; using two displays will hurt battery life; and so on. But to bring up the ghost of Henry Ford again, I think that argument is a bit like claiming that there's no point in selling an orange car, since black is a more popular color. This doesn't change the fact that there's a subset of consumers who would prefer an orange car, or maybe a lime-green one (but don't ask me why), and that a car manufacturer risks losing out on sales by not offering models in those particular colors.

Much in the same way, the crazy assortment of bells and whistles now being attached to various Android devices will give the platform an edge over the iPhone and Apple's one-size-fits-all approach. With so much diversity in the Android ecosystem, a particular new feature doesn't have to be a smash hit with consumers to help put a dent in Apple. It just has to appeal to some niche of smartphone buyers who find the feature a big selling point relative to the iPhone and any other competition.

Apple certainly has its reasons for wanting to keep its iPhone lineup as simple as possible. From the standpoint of product support, software upgrades, and fine-tuning of the overall user experience, it's a lot easier to get the little details right with one phone model than it is with several. But with Google's approach of letting a thousand Android flowers bloom, Apple's devotion to simplicity is bound to come at a price. The auto industry's history is good proof of that.

Do you think Apple's one-size-fits-all approach to the iPhone will succeed in the long run? Leave a comment below!

Fool contributor Eric Jhonsa has no position in any of the companies mentioned. General Motors and Google are Motley Fool Inside Value choices. Google is a Motley Fool Rule Breakers selection. Apple and Ford are Motley Fool Stock Advisor recommendations. The Fool has written puts on Apple and owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (20) | Recommend This Article (8)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 12, 2011, at 11:32 AM, DefunctAcct wrote:

    Wow, so colors are actual usable features like higher resolution or large display? Like a 3D? Like HDMI connectors?

    What sort of comparison are you making?

    What do you think Apple or Nokia or RIMM should do? Start deviating from their product strategy, their core competitive advantage and start focusing on what others are doing and start adding features to their devices just to compete on features?

    So if a phone is not loaded with features, then it is no better than a "color" on a Model-T?

    If that is the best you can do in presenting your argument, I am already wasting my time on this fine Saturday morning replying but I had to do it in case gullible readers actually buy into this silliness Motley Fool calls an "article".

  • Report this Comment On February 12, 2011, at 11:43 AM, techy46 wrote:

    As the saying goes, you ain't seen nothing yet. Anyone that thinks Apple's got a lock on the mobile device marketplace just had to be at HP's webOS show of the Pre3 and TouchPad. It;s about integration in the workplace and it'll become fad in the home too. One device multiple screens; auto, home and work. It's a mobile PC fools, the phone stuff is just another functionality. You carry it around and it connects to whereever you are and syncs you up. Apple needs to peddle faster.

  • Report this Comment On February 12, 2011, at 12:32 PM, AnthonyAaron wrote:

    A couple of thoughts: regarding the Ford metaphor, it required only buying a new can of paint to change the available colors -- no R & D, no experimenting, no manufacturing changes except for substituting the color. Obviously, this is not even remotely close to the requirements for offering different models and specifications of electronic 'gadgets' of any kind, whether smartphone or tablet or whatever.

    Research published just about 2 weeks ago showed that, while Android phones are selling much more than iPhones in some markets -- worldwide, iPhone has only 4.2% of SALES -- the iPhone is generating, for Apple, more than 50% of the PROFITS -- certainly a far more meaningful metric than marketshare.

    Maybe Steve Jobs is onto something here: he is trying NOT to relive the old rag picker's fate: I lose a dollar on every one that I sell, but I make it up in the volume.

  • Report this Comment On February 12, 2011, at 1:12 PM, hp9009 wrote:

    iPhone was always poor in its offerings and cost of owning the phone is too high, regardless US market is not about features it is about the slick factor, fashion and fad. How many users of iPhone bought it for MP3s and how many have a ton of music loaded on it often paid for at the itunes store but how often do people actually listen to the music they have stored on their iPhones? Camera has always been poor quality and the only saving grace has been the availability of apps. It is about to change now, people have got used to the slickness and the fad is just about done. Surely there are die hard apple fanatics who will buy any junk from Apple but rest will move on to bigger and better offerings like the Atrix or whatever trumps that in the future. iPhone for me has been good and bad but nothing too exciting, yes 4 years ago it was the best thing that happened to the cellphone market but time has moved on and Apple cannot push the same outdated technology with a few more bells for another $200 or $400 as the case may be. Biggest short coming of Apple to me is you pay twice for the phone if you wanted 16GB as opposed to 8GB phone not it is between 32GB and 16GB, Apple still insists they are the only Co. which should profit from additional memory needs as opposed to opening it up to microSD cards.

    Wall St. is irrational as has always been and the dumb analysts calling for APPL to be $460 might as well call for $1000 while he is at it and the Money managers who have invested nearly 330B in Apple should really consider the upside left in this stock. iPhone market is about to get cannibalized soon with the likes of Sony, MMI and the rest. Charge me for the battery, charge me higher for the data plan, charge me more for additional memory needs, charge developers of iPhone Apps by forcing them to buy Macs for the SDK, control the apps and the profits the developers make - the list goes on and it is about to come to a hard STOP!

  • Report this Comment On February 12, 2011, at 1:26 PM, artlaz wrote:

    iPhone is successful because of it's simplicity, ease of use, slick design and quality of build. Adding more models with varying features will only add cost and complexity to satisfy a relative handful of special needs users. I think Apple has got it right.

  • Report this Comment On February 12, 2011, at 1:52 PM, applefan1 wrote:

    This is a baseless argument. Henry Ford was selling cars. Apple is selling an electronic device. Apple wants to maintain a consistent user experience and make sure that their product line works well together and that they can be used whether you have a PC or a Mac. If Apple's product was designed, supported and worked so that people buy the product and they can be profitable, then apple is successful. They have, with only one cell carrier, a large portion of the marketshare, with Verizon added, they'll gain more marketshare. What's wrong with that? They don't have to have the largest marketshare in order to be successful. They offer the product and people buy it. Google on the other hand doesn't make cell phones, so the user experience will be different from phone mfg. to phone mfg. Apple doesn't have to offer the product in a variety of colors, nor do they have to make 50 different models. The problem tht companies get into is having too many skus, that's a bigger nightmare in the long run. Apple has a planned roadmap and they are doing the best they can to adhere to it. They continue to have a substantial growth rate that exceeds their predictions, what's wrong with that?

  • Report this Comment On February 12, 2011, at 1:58 PM, applefan1 wrote:

    I think that people should stop comparing apple and google right now. Wait until apple has had a fair amount of time with Verizon and the next iPhone 5 to come out, 6 months after the next release should give a better indication as some iPhone buyers have been waiting for Verizon to come on line before they switched and some are waiting for the iPhone 5. Apple still has the first and second and even some third generation users that will upgrade. If apple owners were switching to the google phone, then they have to worry, but since not many are, they are just increasing the number of phones sold and they are making a sizable profit and that is all apple has to worry about other than coming up with more INNOVATIONS.

  • Report this Comment On February 12, 2011, at 4:19 PM, investor987 wrote:

    I would like a device to backup all the information on my current pda, like an external harddrive, and also allow me to transfer these information to a new pda or smartphone. I mean all the information, calendar, reminder, alert, photo, notes, tasks, etc.

  • Report this Comment On February 12, 2011, at 4:25 PM, investor987 wrote:

    I like phone with a build-in or attacheable solar panel for battery recharge, like for camping trip with the kids.

  • Report this Comment On February 12, 2011, at 4:31 PM, gslusher wrote:

    @hp9009:

    "iPhone was always poor in its offerings and cost of owning the phone is too high, regardless US market is not about features it is about the slick factor, fashion and fad."

    One major problem: Apple sells about 70% of iPhones outside North America. The US market, while important, is not the be-all and end-all for Apple.

    "Surely there are die hard apple fanatics who will buy any junk from Apple but rest will move on to bigger and better offerings like the Atrix or whatever trumps that in the future."

    Oh, like they did with the Zune?

    @investor987:

    I also have a PDA--Palm TX. I can export the contacts and calendar to standard formats that Apple's iCal (vCal) and Address Book (vCard) will recognize and which can then be synced with an iPhone or iPod. I don't know about Windows programs.

  • Report this Comment On February 12, 2011, at 7:01 PM, michael270 wrote:

    First, what went wrong with Ford then was incorrect. Ford's problem was not that it wouldn't offer a variety of cars but that it wouldn't change with the times at all. Roads were becoming common. Comfort was now in and improving drivers rides became important. Ford still insisted on basically making a very uncomfortable truck. People wanted better.

    Second the analogy breaks down in another way. If Apple sold the iPhone as just a phone then the comparison with Android (or RIM or Symbian) would be more accurate. Apple isn't just selling a phone. They are selling a phone, game, media player and whole ecosystem of distributing audio, movies, apps and integration with other devices (Facetime with iPad and Macs). That and on average consumers have more confidence in Apple than any other phone or computer manufacturer. (Look at Consumer Reports)

    Does that mean that Apple can't fail. Absolutely not. Eventually they will falter just like every other company. Nothing lasts forever. But they have shown remarkable brillance the last few years.

    @hp9009

    So much irrationallity its hard to know where to start. First the iPhone camera is actually very good. There are higher resolutions models but generally Apple has done a better job with fidelity so their camera is generally rated as good as other high end phones. One magazine (Mac World) actually used one to take a photograph of an iPhone and used it on their cover to demonstrate the quality.

    Next you say Apple is all about the slickness. Whether its slickness or marketing this always seems to be the mantra of Apple haters. People like something that works and works well. They don't want to have to learn about nuclear fusion to use electricity. Apple works hard on the user experience. In reality Apple's "slickness" or marketing is average. Yes they have nice ads. (which they really don't run many of ) Steve Jobs puts on great presentations. Apple also makes their share of mistakes. (Antenna gate and the missing iPhone 4).

    What it boils down to is their engineers do a good job and they get an assumed trust in it. You may see that as slick. I see that as a good reputation. That will fracture in moments if they make a serious error. (Just as Toyota)

    As for their stock. Lets see who should I listen to? You or to investment personel that voted (listed in Baron's magazine) Apple the most respected company again. Who should I listen to you or to? You or people who invest their money in what they think will increase their value the most. I am not talking about talking heads but about people that actually invest their or their client's money.

    Next time think with your head and make some intelligent comments rather than just demonstrating your hatred. You make negative comments about Apple and be respected. Its just yours wern't intelligent or thought out.

  • Report this Comment On February 12, 2011, at 9:40 PM, Henry3Dogg wrote:

    When a company is run by marketing persons, they decree that a phone needs to me multi coloured or nasally inserted, and they release the kin.

    A company that is pushing back frontiers in functionality has other concerns.

  • Report this Comment On February 12, 2011, at 10:56 PM, IraLA wrote:

    Users have one concern and one concern only (or mostly): Does it work? When I insert Tab A into Slot A and continue in that way, will it be, do, and feel the way I want it to?

    I get all the colors I need on the part of my monitor that lights up. Oh, and green means GO and red means no go.

    Keep it simple and functional and it is a better mousetrap.

    http://wereport.com

  • Report this Comment On February 13, 2011, at 12:33 AM, fatmonk wrote:

    GM vs Ford... GM filed chapter 11 and got help from Gov. if Gov stayed out, GM was gone.

    -- it is does not matter GM, Ford, MSFT, APPL,...RIM, GOOG, NOK...any of these company slows react to the change will be gone.... look at NOK, GM, MSFT and Sony... even AAPL in the mid 90's...

    AAPL has been through it.... it got experience

  • Report this Comment On February 13, 2011, at 2:23 AM, AnthonyAaron wrote:

    @hfrjktktyk -- take your SPAM elsewhere -- actually, just shove it somewhere and leave your crap off the web.

  • Report this Comment On February 13, 2011, at 3:27 AM, nintini wrote:

    In my opinion the comparison with Ford is wrong in two ways:

    - the telephone market is NOT a new market since Nokia was dominating it with a variety of models. My wife owns a Nokia E66 and I was looking for some sw to sync it with the PC. The Nokia site is VERY complicated due to the very high variety of models each slightly or significantly different from others. The site has a LOT of dead links (at least the Italian site) making it a frustrating experience to surf it.

    So the market condition could not be very similar with the one Mr. Ford was facing.

    - the variations of model with the electronic devices is performed more via software than via hardware. I thing one of the main advantages of the iPhone and android vs Nokia is that you can change the look, the behavior, the usability, the features of a phone without changing the hardware. Instead, despite the high variety of Nokia models, it is hard to change anything once you owe one!

    The market conditions, as said, are really different now and Apple has proven to sell high end- high priced devices as no one else. For android to compete the price has to be lower.

    Aft all I'm not sure android has to be compared with Apple. Android is a sw platform available for free Samsung, motorola, lg,.... Those companies are the competitors and no one is as successful as apple is.

    The history can teach a lot, only if considered in the right context.

  • Report this Comment On February 13, 2011, at 2:41 PM, astralexis wrote:

    Just look at the iPad lineup; it's quite obvious that Apple knows what colors can do. And so far, no one can say the iPhone wasn't a success. As long as they can't even make enough of these phones to satisfy demand, there's really no reason to worry about colors.

  • Report this Comment On February 13, 2011, at 7:04 PM, busterbuddy wrote:

    First booger brains, General Motors didn't exist at the time you mentioned. And secondly and most importantly booger brains. GM had to get on their knees and bet for money. And I do believe Ford most famous quote.

    Mr. Ford CEO what' your response will you take a pay cut to one Dollar?

    No, I think I'm ok where I am.

    So Steve jobs can learn like nothing, booger brains.

  • Report this Comment On February 14, 2011, at 7:29 PM, inkstainedwretch wrote:

    I think it's a bit simplistic to say the Apple has a "one size fits all" mentality with the Iphone. That may fit in the hardware department but when you consider apps, a user can customize their iphone's functionality to an absurd degree.

    That said, it is monumentally idiotic that apple doesn't offer a version with a physical keyboard. That small adjustment would destroy RIM's remaining market share and help wrangle more of the exceedingly lucrative enterprise market.

    Currently, I've got a BB and an Ipod touch. I'd love to replace both, but without a decent keyboard, writing emails on an Iphone is a pain.

    Jobs' method does work with computers, though, because it protects the brand from the stupid buyers that ruined the PC's reputation.

    Usually, the people who complain most PCs and the ones who spent $500-$1000 on a barebones laptop and are shocked when it doesn't perform like a $3000 macbook pro.

    By limiting the available options, Apple can be sure that every buyer gets the best version of its product.

  • Report this Comment On February 14, 2011, at 7:31 PM, inkstainedwretch wrote:

    CORRECTION:

    "Usually, the people who complain most ABOUT PCs ARE the ones who spent $500-$1000 on a barebones laptop and are shocked when it doesn't perform like a $3000 macbook pro."

    Typo fail.

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