A lot of journalists have called this week. Their question: What makes Apple Watch tick? Interestingly, most of them already seemed to know the answer: cutting-edge technology, wrapped in Apple's cool marketing, right? Well, not quite.
The Apple Watch raises a broader question about Apple's R&D. A while ago, for instance, USA Today asked the following question: With the iPad getting stale, and competition in the smartphone arena kicking up, should Apple pick up its R&D game? The numbers seem to support this hypothesis. Here are the S&P 500 companies that spend more on R&D than Apple in both 2013 and the second quarter of 2014:
Apple’s R&D looked at this way is even tinier. Apple spent just 4.3% of its revenue on R&D in the second calendar quarter of 2014. That means it ranks as just 95th of the biggest spenders on R&D among the S&P 500 looking at it this way.
USA Today echoes a very popular view on innovation that reduces all economic value and market success to questions of technological brilliance. But how can a company that spends relatively little money on R&D be so successful? Answer: Apple probably follows a very different approach. Its main innovation lab is not at One Infinite Loop in Cupertino. It's main innovation lab is society itself.
As my colleagues Marius Luedicke, Craig Thompson, and I wrote in 2010 in the Journal of Consumer Research:
...mythic structure provides an archetypical cultural template that societies can use to represent and understand complex cultural occurrences and sociopolitical crises. Morality plays help individuals to assuage uncertainties, doubts, and anxieties precipitated by everyday experiences of moral ambiguities. Social actions often fall into normative gray areas, marked by contextual nuances and mitigating circumstances, which do not easily map onto such clear-cut normative distinctions. In contrast, modern morality plays cast situations in terms of clear and unambiguous contrasts and outcomes, thereby allowing individuals to experience an idealized moral universe and reaffirm their faith in the guiding normative system.
From this perspective, Apple Watch is not only a technological object or a fashion object. It is a moral object - it competes over the most resonant stories about virtuous parenthood, virtuous health, virtuous fitness, virtuous ecological stewardship, virtuous creativity, virtuous career success, etc.
It does not aspire to be a gadget that makes people's lives easier. Instead, it works to make itself indispensable to the solution of everyday moral dilemmas such as "should I take the escalator or the stairs?" Nobody needs better technology but everyone needs answers to what's right and what's wrong - for instance in the context of health that you cannot be an active and healthy individual without an Apple Watch. Companies understanding this sociological fact can afford to view R&D in much broader terms - and they can rely on the collaboration of society at large.
Apple's mojo is not technological - it is moral.
