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Apple’s innovation challenge

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This chart from Venturebeat shows how Apple’s first quarter revenues broke down (total $55bn). The amazing thing about it is that 76% of their business now comes from products that are less than six years old. On the one hand it is an incredible testament to the leadership of Jobs, Cook and Ive that they have reinvented themselves so successfully, but on the other hand it highlights the requirement to find new products that will have a comparable impact over the next six years.

The new product that everyone is talking about is an Apple television. That sounds like a great idea, but it is hard to know how good it is, how successful it will be, or what the margins will be until it is released. In the meantime Apple’s growth comes from the iPhone and iPad, which are both great products, but which are both facing increasing competition from lower cost Android devices.

Against this backdrop it is perhaps unsurprising that investors are hyper-sensitive to any signs of faltering growth and wiped $50bn off Apple’s market capitalisation this week when the company released first quarter revenues figures that were a new record high for the company but below analysts’ expectations.