Innovate or risk falling behind

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Innovate or risk falling behind

One-time-favorite Apple is having a tough time. Its share prices fell more than 12 percent on Thursday. Compared to its record high on Sept. 21, the iPhone producer lost more than one-third of its market capitalization in four months. Analysts are scurrying to cut the company’s rosy stock price target, proclaiming the Apple magic is over. Apple shares have been sinking since they lost their ship captain Steve Jobs 15 months ago.

Apple’s dramatic fall stemmed from the market’s increasing sense of anxiousness. Investors are now wary of the company’s outlook. Jobs reinvented the Apple myth through unmatchable innovation after innovation. He stunned the market with every new product. But the market shunned the latest iPhone 5 series, calling it absent of any novelty or innovation. Some are even nervous about the company’s proprietary and closed nature, spooked by the past Macintosh laptop debacle. Investors, IT experts and consumers all fear that the amazing innovator and trendsetter is turning into a mediocre profit-seeking corporation.

Few jumped to the conclusion that Apple’s doom could be a boon for its smartphone rival Samsung Electronics. Apple as the front-runner may have been hit by the first headwind toward the smartphone industry. The higher-end smartphone market in advanced economies is already saturated, and premium phones cannot sell that lucratively in emerging markets like China. Competition will likely get fiercer in a full lineup smartphone market.

Industrial history repeats itself. Once a company hits the jackpot with a stunning breakthrough in technology development, competitors immediately try to match or beat it with similar products. The industry evolves through competition and new innovations. Any proprietary walls, therefore, cannot stop the current evolution in technology. While keeping in tune with consumer appetite, companies must incessantly innovate and pave the way for prosperity by staying ahead if they don’t want to fall behind.

The time period for a rise and fall in the industrial world is getting shorter. It is sometimes hard to decipher whether a certain technology can open a new market or end up redundant. Opportunities as well as risks have become bigger. Nokia and Sony - once the exemplary leaders in the IT business - have all fallen behind. We can hardly rule out the possibility that Apple could one day join them. Apple is at a crossroads.

The Korean IT sector cannot afford to enjoy unexpected benefits from Apple’s fall. They must keep their eyes open. Chinese technology companies are quickly on the rise with their innovative products. No one can say who will be the winner at the end of this year or next. But one thing is clear: There is no future without innovation.

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