Apple's secret to success: Don't be the first to strike back

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Apple sold more than 61 million iPhones in its most recent quarter, and a staggering 74.5 million in the previous quarter.

Apple's most successful product, the iPhone, changed how businesses and consumers think about the power and potential of mobile phones. Apple had a huge advantage when it introduced the product: It wasn't the first company to come up with a similar product.

On this week's Master in Business podcast, New York University marketing professor Scott Galloway told host Barry Ritholtz that Apple has always had a "second-mover advantage."

People often think that the first company to come up with an idea is the winner, but in reality, it is usually not the first company but the second company that implements the idea correctly and succeeds.

“When it comes to shareholder returns, it’s not the first movers that get the most, it’s the late movers that get the most,” Galloway said on the show. “The true innovators — the companies that get there first — usually don’t return shareholders very well, and the companies that follow are usually the best investments.”

Galloway continued: "Apple was second in many areas, so it's not an innovator in the literal sense. Apple didn't make the first mouse, it didn't make the first MP3 player, it wasn't the first smartphone. But Apple saw these things, improved them, added value, and in short, made these things more humane after Apple got involved."

Take smartphones as an example. The fates of Apple and BlackBerry are very different. Around 2005, BlackBerry dominated the smartphone market, but once Apple entered the smartphone market, it pulled BlackBerry down from the top position and became the market leader. Apple continued to crush Samsung.

A look at the share prices of BlackBerry and Apple since 2004 makes this clear: Apple's share price has increased 4,400% during this period, while BlackBerry's share price has fallen 85%.