Here’s what we can learn from Apple’s decision to kill the 3.5mm audio jack on the iPhone

Diversification has usually helped big corporations weather good times and bad. Conventional wisdom dictated that operating across industries and business lines meant that slowdowns in one area could be compensated for in another. This is particularly true in emerging markets, where ups and downs tend to be greater and access to valuable resources including financing more difficult. This enables big companies to leverage their access over a range of industries. Tata is involved in everything from chemicals, steel, cars and business consulting to telecommunications, and hotels. The Wanda group is in everything from property to cinemas and tourism. In developed economies, the benefits of diversification are much smaller and conglomerates have been disappearing.

Spreading out can also cause challenges, especially for technology companies. Digitalisation carries the promise of value creation through integration of everything from gaming, entertainment and communication to refrigeration and heating. But instead of being valuable you can end up being a bit of everything to everybody, meaning nothing to nobody, as Sony learned. Sony has only recently started reaping the benefits of an ambitious turnaround effort to offset a long decline in consumer popularity and brand value. Technology analysts say Sony essentially squandered an opportunity to harmonise the valuable, but growing assets in its portfolio, such as consumer electronics, its recording label and movie studio to take on the likes of Apple, which came to dominate entertainment through its iPhone and other devices with music and movies or Samsung, which came to dominate hardware component industries. For the complexity that the expansion into different businesses brings, challenges not only management; it also carries the risk of overwhelming customers.

Sony is now focused on entertainment and rightfully so. Its games division under PlayStation recently helped the company to post an expectations-beating quarterly profit, led by successful monetisation of gaming, including through its “network”. It’s also shedding assets such as its batteries business, as well as slimming down its phone business.

Sometimes, subtracting rather than adding is a better strategy for innovative companies to capture the consumer’s attention. Innovations do not automatically create conditions for their adoption but the behaviour of the customer must be managed for it to succeed.

Apple has led the way in this regard. Its product portfolio is very focused. An Apple store today probably has fewer Apple stock-keeping units (SKUs) or items than Samsung has phone and tablet models. Apple has also been at the forefront of simplifying the customer experience as shown again with its recent decision to remove the 3.5mm audio jack from its iPhone, a 138-year old technology that allows users to connect any type of wired headphones to their iPhone to listen to their music. The alternative will be the AirPods, wireless headphones that will connect seamlessly with the device.

While this has led to conspiracy theories saying that a world without wires is actually an attempt by Apple to tether us closer to its technology and products, I would posit that the removal of the audio jack is also a lesson in making innovations succeed by changing the market, instead of trying to responding to it, as Sony tried to do.