Apple's AI About-Face Isn't A Failure. It's A Lesson In How To Innovate.

Forbes

15 hours ago

Apple computer, iPad, and Home at home.
It's been just over a year since Apple unveiled its long-anticipated foray into generative AI, teasing the launch of a new brain for Siri that would take the iPhone experience to the next level.
The company was already late, but at least it had gotten in the game with its own vision. Apple Intelligence, as they called it, would leverage its strength in consumer devices rather than copying the OpenAIs of the world. And yet, one year later, the AI game is still largely being played without Apple.
The new Siri hasn't materialized, and the company was forced to announce an indefinite delay at its Worldwide Developers Conference in June. Senior execs said the new version of Siri hadn't met Apple's high standards, forcing them to go back to the drawing board. The story got even worse when Bloomberg reported that Apple had held internal talks about buying Perplexity and was considering using technology from Anthropic or OpenAI to power the new Siri, rather than its own large language models.
For years, people have been concerned that Apple is losing its innovative edge–and they may be right. The company hasn't produced a truly groundbreaking product since the Apple Watch in 2015, and each new iPhone model seems less thrilling and more incremental than the last.
Still, the news out of Cupertino may actually be a sign of progress.
The fact that Apple reversed course on developing its own AI technology isn't necessarily a sign of weakness. Apple's leadership may be demonstrating a healthy amount of self-awareness and executing a strategy that plays to its strengths. The rest of us might be getting an essential lesson in how companies should manage innovation by focusing on what we're great at rather than wasting resources trying to be something we're not.
The Three Big Jobs of Innovation
Large-scale corporate innovation can be a complex beast, inviting all manner of methods and systems and metrics. But at its core, innovators need to do three things: 'Dream It,' 'Build It,' and 'Scale It.'
The 'Dream It' job is all about exploration. It involves basic research and widespread exploration. It's about asking 'What if…?' 'Dream It' innovation is the kind of work that went on at Xerox PARC and Bell Labs: places where the internet was first invented. It's what Google X was established to do. Some Google X projects look like Project Loon, a short-lived initiative to provide internet connectivity to Africa by launching a fleet of broadcast balloons. Other projects become things like Waymo, the first successful driverless car service. 'Dream It' initiatives are usually too early-stage to worry about things like market share, product refinement, or shipping dates. Places with 'Dream It' cultures encourage freedom, curiosity, and permission to chase questions most firms would never fund.
The 'Build It' job is about creating new things. It's about design and prototyping. If 'Dream It' looks like freeform writing, 'Build It' looks like ruthless editing. It's about asking 'How might we…?' 'Build It' innovation is the kind of work that goes on at Nike and IDEO. The best builders focus on a clear vision for their service or product and then iterate it until it delights the end user. Dyson does this in household products like fans and vacuums. The philosophy of its founder, Sir James Dyson, is that 'things should just work properly.' Dyson rejects the popular image of himself as a wild-haired inventor, saying: 'It undermines the testing and rigour of bringing an invention to life, of people working together to achieve something.' He doesn't want to be seen as a 'Dream It' guy…
And then there's the 'Scale It' job. This part is critical, because an innovation is an invention that has socioeconomic impact. Scaling takes a finished concept and catapults it to wider success. The 'Scale It' job involves things like go-to-market strategies, channel relationships, staged investment plans, and relentless customer feedback loops. Many dreamers and builders stumble at this point because they don't know how to turn their brilliant ideas into reality. Microsoft is a master scaler. Whether it's Microsoft Office, Azure, Teams, or its OpenAI partnership, the company excels at rolling technology out to millions of enterprise users and making it the industry standard.
When it comes to innovation, every company needs to Dream It, Build It, and Scale It. And each of these three jobs require very different types of people, processes, and cultures.
Some companies manage to do it in-house by creating subsidiaries or divisions. Others build walls between different parts of the business and try to give each the freedom to focus on what they do best. Years ago, Frito-Lay exec Joe Ennen went so far as to divide his organization into three functions. The goal was to get each group to focus on one specific job, be it dreaming it, building it, or scaling it.
Play Your Position
Of course, the real challenge is that a company's overall culture will lend itself to only one of these jobs. Frito-Lay has always been best at scaling ideas, not dreaming them up. And when companies attempt to be something they're not, they're like quarterbacks trying to be linebackers. They run into frustration and costly dead ends that waste resources and divert attention from their true calling. It's better to play your position.
Most pharmaceutical giants are scalers. Pfizer has been likened to a venture fund, identifying smaller firms that dreamt up promising drugs, then funding and scaling them with its massive marketing and distribution network. The company didn't invent the COVID vaccine – it partnered with the small German biotech firm, BioNTech, that pioneered mRNA-based therapies.
And that brings us to Apple.
Apple has always been the very best at the 'Build It' job. As Steve Jobs put it succinctly: 'Real artists ship.' And while Apple's era-defining products like the iPhone and iPad have given it a reputation as a genius inventor, its success is actually built on borrowing ideas and turning them into great products. Apple builds what other people dreamed up.
Apple didn't dream up the multitouch technology crucial for the iPhone and iPad; it acquired it by buying FingerWorks in 2005. Neither did they invent the graphical user interface or the mouse that became the foundation of the Mac. Those ideas were taken from Xerox after Apple executives visited its Palo Alto Research Center in the late 1970s. The PARC researchers were dreamers – they didn't see the world-changing nature of the cool stuff they'd envisioned. Jobs was a builder, later saying he realized within ten minutes the revolutionary potential of what he saw at PARC.
Apple's genius was to edit those unpolished ideas into user-friendly products that could be manufactured at a low cost and sold at accessible prices. It edited down those dreams into tools that felt inevitable once you used them. The iPhone didn't create new technologies. It curated the most promising ones into a compelling experience. Even Siri isn't an Apple invention – the company bought it from Stanford Research International (SRI). That's why it's called Siri.
In that light, Apple's search for external help with AI is a smart move. It isn't a betrayal of its innovative identity; it's a reaffirmation of its identity as the builder company archetype. If it can take Perplexity's or OpenAI's technology and mold it into the next great Apple products that delight customers, it will be doing precisely what it did with macOS, the iPhone, and Siri.
Ironically, OpenAI has decided to do the inverse. The company just spent $6.5 billion to acquire iPhone designer Jony Ive's startup, IO, this year, with the aim of building 'amazing products that elevate humanity.'
What Makes You Great?
Any leader struggling with how to approach innovation should start with one fundamental question: Who are we? You should look back at all the things your company has done in the past and determine what you're best at. If you've done better at basic research and developing new ideas, you're likely a dreamer. If you've had more success at rapid prototyping and understanding market needs, you fit the builder mold. If you're excellent at formulating go-to-market strategies, developing sales channels, and engaging customers, you're a natural scaler.
Once you have clarity about who you are, you can stop trying to be what you're not and start looking for partners who can fill the innovation gaps. True innovation isn't about doing everything yourself; it's about knowing what kind of innovator you are.
Apple's search for a partner that can supercharge its AI capabilities will be fascinating to watch, but it shouldn't cause investors to lose sleep. The time for worry is when Apple stops exploring partnerships to build the next great innovation.