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A Long-Lens Look at Apple and Disruption Apple’s recent release of the M1 series Macs, based on the newly minted Apple Silicon technology, was a hot topic in November. This led us to take a new look at Apple’s past, present, and future through the lens of Disruption, published here in three parts. Part 1. Is Apple Disruptive? Farshad: Horace & Dave, thanks for joining this long lens look about Apple & Disruption. I’d like to set the stage with an brief synopsis, and then ask three fundamental questions about Apple. Apple has done an amazing job in advancing personal and mobile computing. They have brought some of the greatest products in the world to billions of happy customers. They have entered new markets methodically, taking on fierce, entrenched, and well-healed competitors. They’ve done so while growing market share, improving products and increasing margins. Most recently Apple has introduced their own M1 SoC, based on their foundational Apple Silicon technology, leaving behind Intel, the leading supplier of PC CPUs. Taking a long-lens look at Apple & Disruption, let us explore three questions: Is Apple Disruptive? Is Apple Over-serving with M1 Macs? How does Apple defy Disruption? Let’s dive right in. Is Apple Disruptive? Horace, what do you think? Horace: Actually the reason I do Apple analysis is this. Apple is the anomaly or the exception that makes the rule of disruption. The history of Apple has been both in confirmation of and in contradiction to the theory of disruption, thus observing Apple helps us better explain disruption. This is what Clay always had as a goal: Let’s find the anomaly, so that we can improve the theory. In looking at the graph of moving to higher margin versus a lower margin and lower performance is also present for Apple, however, the twist to that story with Apple has been that when looking at the upper end of the trajectory, they are often creating a new market. In his classic disruption diagram, [Clay] puts a new market as a separate parallel plane, the Z dimension, which suggests there’s a parallel market that can be created. Often what Apple does is combines the two markets so that that, Apple’s move looks like an up-market move in the original market, but it’s also a down-market move in another parallel market. The iPhone is a classic case in point: it’s far too good as a phone, but it’s far, far too low-end to be a computer. And so when do you understand that, you realize that the disruption that occurred, it’s a market creation of an alternate way of spending your time. It’s an alternate way of creating applications, which came to be known as apps. It’s a new way of communication through social media. It’s