Myth says that Apple's (Nasdaq: AAPL) competitive advantage is Big Ideas, and that 100% of this advantage flows from CEO Steve Jobs. After this week, anyone who still believes that is at least part ostrich.

On Wednesday, Apple previewed a new version of the Mac operating system called "Lion." Due next summer, the OS borrows heavily from the productivity enhancements introduced with the iPhone 4. It will be launched along with a new version of the iLife software suite and will also introduce a new App Store for the Mac.

Not big ideas, but big execution
What makes this OS important for investors is that it's anything but a Big Idea. No new product categories were created. No paradigms were shifted. Instead, Apple introduced enhancements that should make Macs more usable. In a word, Apple executed.

But this is also what Apple always does. Google (Nasdaq: GOOG) is the House of Big Ideas; Apple is where a handful of big concepts (i.e., personal computing, mobile communications, tablet computing) get made more usable.

Breaking this thesis down into a competitive advantage, Apple:

  1. Is willing to change everything if doing so makes the experience better.
  2. Focuses far less on ideas and far more on execution.

Let's put these concepts into context by digging further into Mac OS Lion.

This Mac roars
Most of the reporting about Lion focuses on the App Store's move to the Mac, and for good reason. Having a Mac App Store is likely to make things easier for users and more profitable for Apple.

Let's cover why it's easier first. With the App Store, most software upgrades will be automatic. It'll also be easier to find new apps for your Mac, and developers are sure to cheer over that. They've committed to the various iOS devices in large measure because of how visible the App Store is on these devices; it's a big market for them.

And it is for Apple, too. Total iTunes and App Store revenue grew by nearly 23% in fiscal 2010, to roughly $5 billion. For comparison's sake, consider that Adobe Systems (Nasdaq: ADBE), one of the industry's more important software developers, produced $3.5 billion in revenue over the past 12 months.

Now think about the business impact of an App Store on the Mac. Why would developers keep producing packaged software when e-delivery is cheap and convenient? Apple takes a 30% cut to cover its distribution and maintenance costs, but otherwise, it's the same game-changing win-win that we've seen propel Apple's iOS devices to great heights.

With the Lion App Store, the Mac maker is positioning itself to massively disrupt software distribution while also luring developers to the platform. The possibility of such a paradigm shift may help to explain why Apple is investing in its own data centers -- not so much to disrupt partners such as Akamai Technologies (Nasdaq: AKAM), but to make software delivery as seamless as any other retail experience.

The Mac App Store will go live in Snow Leopard within 90 days.

Making the little things big
Little additions in Lion are easier to miss, but I think they're equally important. For example, two new tools improve on a current Mac OS feature called Expose that hides and finds open apps. "LaunchPad" makes the desktop look more like an iPad and gives users the ability to stack applications into a folder. "Mission Control" allows users to see everything open on the Mac with a quick gesture and navigate within this abstracted view. (Get the full demonstration.)

Will users care about either feature? Some will, but I think the bigger point is that customers are more likely to love a system whose small touches make the entire environment more productive -- especially now, when quality manufacturing and design have taken a hiatus in too many industries.

Great execution also breeds loyalty. We know because users tend to love their Macs. Apple scored an 86 in the latest survey of the American Customer Satisfaction Index, its highest total ever and nine points better than Dell (Nasdaq: DELL), Hewlett-Packard (NYSE: HPQ), and Acer, which tied at 77.

As I said ...
I've written before that the Mac you know is no longer. We've yet to see the iOS and Mac OS merge and the A4 chipset become standard for all Apple hardware, but I still believe that day is coming. In the meantime, with Lion, we have more evidence that Apple is moving swiftly to put pressure on rivals -- not with Big Ideas. Nor with Jobs leading an insurgency, but instead with a passion for precise execution that, so far, competitors can't seem to replicate.

"Real artists ship," Jobs once said to encourage his pirate band of developers of the original Macintosh. In the years since, Apple has proved to be Picasso*. Lion won't change that.