The Economist runs an interesting article about the innovative power of computer slash music slash soon-to-be mobile-phone company Apple. It’s mercurial CEO Steve Jobs is a rare showman in the technology industry but has twice succeeded to start a whole new line of business.

The success story started in 1984 with the launch of the Macintosh computer, not only known for its graphical interface but also for its marketing. It was launched during a memorable TV spot during the Super Bowl in which a colorful rebel (Apple) smashed an oppressor (IBM). It would lead to the slogan ‘Think Different. in 1985 came another turning point, its founder Steve Jobs was sent away not to return 12 years later. In the meantime Apple missed a lot of opportunities and found itself facing bankruptcy mid-nineties. Back on the board in 1996, Jobs orchestrated the launch of the Ipod and the Itunes Store, which changes the face of the music distribution and listen experience. He’s heading on for strike three with the iPhone, in itself not a new product (a phone with a touch screen) in a overcrowded market, but with the potential of creating a whole new family of products.

What can other companies learn from California’s master of innovation?

1. Network innovation: Combine outside innovation with own ideas
The first is that innovation can come from without as well as within. Apple is assumed to lock away its inventors in the tradition of Thomas Edison or Bell Laboratories. In fact, its real skill lies in stitching together its own ideas with technologies from outside and then wrapping the end product in elegant software and stylish design. The idea for the iPod was originally thought up by an external consultant hired to run the project. This approach is known as ‘network innovation’, which involves cultivating contact with startups and academic researches and constantly scouting for new ideas.

2. Design products around the needs of the user instead of the technology
Too many technology firms think that clever inventions are enough to sell their product, resulting in gizmos for engineers by engineers. Apple combines clever technology with simplicity and ease of use. Apple is not alone in this field. Philips is sharing a similar approach. Niklas Zennstrom and Janus Friis, our European Steve Job’s, did the same with Skype and hope to do the same with internet television

3. Stay hungry, stay foolish
Listening to customers is important, but sometimes you have to know better. Sometimes you have to ignore what the market says it wants today. The iPod was ridiculed when launched in 2001 such as the Nintendo Wii, the most successful game console of the last year.

4. Fail and try again
The Macintosh was born from the wreckage of the Lisa, an earlier product that flopped. The iPhone is a response to the failure of the Apple/Motorola music phone. Apple has learnt from its mistakes and tried again. The wider lesson is not to stigmatize failure but to tolerate it and learn from it. The rigid bankruptcy laws in Europe are one the of reasons Europe has failed to create an European Silicon Valley.