The age of experience – Google, Apple and Microsoft

When I read this

Turns out, Apple’s run of incredible products (and growth) has been achieved with a staggeringly low R&D spend. How low? Apple only spent $4.6 billion on R&D over the past four years, while revenues soared from $25 billion to $43 billion.

In contrast, Microsoft spent 700% that amount on R&D during the same period, a whopping $31 billion, while growing at an anemic pace, despite flippant M&A.

I had to think of the classic Nielsen graph from 1998. The IT market now is struggling and has already changed dramatically in the last years, most of the innovation and succesful mass market products were based on user experience innovation.

The iPhone, the iPad, Microsoft Office 2007, Netbooks and Windows 7 are some examples.

The most fascinating company in this regard is Apple, the slimmest product line ever, combined with a razor sharp focus on user experience makes it insanely profitable.

Their low R&D spending is only working for them because they are focused on user experience. Microsoft is just learning their lesson, the upgrade from XP to Vista had no appeal for most users since the were already happy with XP… if a product is good enough it’s beyond the user experience transition point. To gain or hold onto market share a company has to deliver a better experience.