apple

For a company that looked doomed a decade ago, it has been quite a comeback. Today Apple is literally an iconic company.

After years of exile, Steve Jobs, co-founder of the company, returned to Apple in 1997 and reinvented it as a consumer-electronics firm and is now taking it into the billion-unit-a-year mobile-phone industry. But mostly Apple's zest comes from its reputation for inventiveness.

From its first computer in 1977 to the mouse-driven Macintosh in 1984, the iPod music-player in 2001 and the iPhone in 2007, Apple has prospered by keeping just ahead of the times.

The company is not without its critics.

1. The not-always-lovable Mr Jobs is still stuck in a greedy-looking share-option "backdating" scandal.

2. The firm has come under attack for refusing to make its operating-system and music-protection software available to others.

3. There are grumbles about manufacturing defects and customer service.

Apple is hardly alone in the high-tech industry when it comes to duff gadgets and unhelpful call centres, but in other respects it is highly unusual. In particular, it inspires an almost religious fervour among its customers. That is no doubt helped by the fact that its corporate biography is so closely bound up with the mercurial Mr Jobs, a rare showman in his industry. Yet for all its flaws and quirks, Apple has at least four important wider lessons to teach other companies.

1. The first is that innovation can come from without as well as within. Apple is widely assumed to be an innovator in the tradition of Thomas Edison or Bell Laboratories, locking its engineers away to cook up new ideas and basing products on their moments of inspiration. In fact, its real skill lies in stitching together its own ideas with technologies from outside and then wrapping the results in elegant software and stylish design. Apple is an orchestrator and integrator of technologies, unafraid to bring in ideas from outside but always adding its own twists.

This approach, known as "network innovation", is not limited to electronics. It has also been embraced by companies such as Procter & Gamble, BT and several drugs giants, all of which have realised the power of admitting that not all good ideas start at home. Making network innovation work involves cultivating contacts with start-ups and academic researchers, constantly scouting for new ideas and ensuring that engineers do not fall prey to "not invented here" syndrome, which always values in-house ideas over those from outside.

2. Apple illustrates the importance of designing new products around the needs of the user, not the demands of the technology. Apple has consistently combined clever technology with simplicity and ease of use. Apple is not alone in its pursuit of simplicity. Philips, a Dutch electronics giant, is trying a similar approach.

3. Smart companies should sometimes ignore what the market says it wants today. Listening to customers is generally a good idea, but it is not the whole story. The iPod was ridiculed when it was launched in 2001, but Mr Jobs stuck by his instinct.

4. The forth lesson from Apple is to "fail wisely". The wider lesson is not to stimatise failure but to tolerate it and learn from it: Europe's inability to create a rival to Silicon Valley owes much to its tougher bankruptcy laws.

None of these things, of course, guarantees success: you can buy in clever ideas, pursue simplicity, ignore focus groups and fail wisely -- and still go bust. Apple very nearly did so itself. No doubt the bumptious Mr Jobs will overreach himself again: the iPhone's success is not guaranteed. But for the moment at least it is hard to think of a large company that better epitomises the art of innovation than Apple.