A nice highlight comes from Joel Spolsky, software developer in NYC, who says
"Devotees of simplicity will bring up 37signals and the Apple iPod as anecdotal proof that Simple Sells. I would argue that in both these cases, success is a result of a combination of things: building an audience, evangelism, clean and spare design, emotional appeal, aesthetics, fast response time, direct and instant user feedback, program models which correspond to the user model resulting in high usability, and putting the user in control, all of which are features of one sort, in the sense that they are benefits that customers like and pay for, but none of which can really be described as “simplicity.” For example, the iPod has the feature of being beautiful, which the Creative Zen Ultra Nomad Jukebox doesn't have, so I'll take an iPod, please. In the case of the iPod, the way beauty is provided happens to be through a clean and simple design, but it doesn't have to be. The Hummer is aesthetically appealing precisely because it's ugly and complicated."
An interesting perspective on design. It definitely helps me to grab onto the crux of this question of simplicity and what features are essential to look at Apple's design philosophy, as they've consistently been design trendsetters in electronics, software, and hardware. Steve Jobs says "Design is not just what it looks like and feels like. Design is how it works." Definitely in agreement with Joel S., they're both saying that the design is everything and the features can't be separated for convenience purposes without losing the entire intent of the project.
But wait, this is in direct disagreement with The Man! Conventional philosophy on product design says that you can separate the items and pick and choose. In fact, Joel's article specifically brings up the 80/20 rule, which states that 80% of users use 20% of features. The conclusion businesspeople draw from that is you only need those 20% of features and your product will do well, hence the argument for simplicity within the product. By picking out those specific features, you make only the product people will use. Brilliant.
An excellent example of how picking a target market can hurt is the Newest Console Wars between the PS3, Xbox360, and Nintendo Wii. The consensus on this round is that the PlayStation3 and Xbox360 are gunning for the hardcore gamers, releasing more powerful systems and hoping to make up for lost profits on peripheral sales. (note; source states that the Xbox 360 is now profitable with each unit sold, last year at initial release they were not.) The Nintendo Wii, on the other hand, has said Screw it, and gone for a system without comparable capabilities to the 360 and Ps3 in favor of an innovative control system based around motion sensor technology.
While the ps3 and xbox360 are focusing on the 20% of features that hardcore gamers care about, the Wii has gone for a more holistic design philosophy and decided that all the features of a great system were there in the last generation of hardware. So they just kept the gamecube, invented a way to make it more accessible to non-hardcore gamers, and are doing quite well.
IMHO, the strategy of Apple and Nintendo has a lot in common and actually does follow the 80/20 rule. The reason why it doesn't look like they're following it is because they have a much larger target market in mind. They're saying screw the arms race, instead of better nukes we'll go into biological warfare. It works because nobody else is prepared to deal with Biological warfare and they'd have to change their entire industry to do so.
While a company might look at MicroSoft(MS) word and say 'Nobody's using this and this and this,' cut them out, and suffer because of it, a better design philosophy would look at MSword and say 'Who isn't using it yet? Why?' or 'How could people use MSword better?' or 'What features is MSword missing and who would use them?'
Once you assuming that the entire world is your target market, it's easier to figure out which features are important and which ones get the axe. Dozens of features within MSword are used by different groups for different reasons, so trying to cut the huge programs that MS puts out into more palatable chunks and market them separately are neglecting the fact that MS doesn't need to be efficient or have certain target features; it's got momentum and a huge company on its side. Trying to get a chunk of MS's market without acknowledging that the market isn't actually built on the strength of specific MSword features anymore is what makes me cringe whenever new companies release an open-source MSword or office killer based on the 80/20 principle.
Companies who try to look at the 20% of features people use in a product and focus on those aren't looking at the Long Tail. The 80/20 focused companies are leaping to cater to a hypothetical ideal customer who doesn't exist. Joel makes the excellent point that different people use different 20%s, so the trick is in
1. You don't need the sheep; Recognizing that you're not trying to take the entire existing market share
2. Finding a real market; Clarifying your end goal and the spectrum of people who would use your product
3. Making a real product; Making enough features to give them the utility they need and the diversity they want.
The reason why this strategy is superior to trying to compete on the same market and level of the big boys is that generalization is always cheaper than specification. The Wii is immediately profitable because all the expensive parts have already been made cheap by the last round of console wars, people can make games for it right off the bat, and all they had to do was aim for a totally unaddressed market. Anything they made would be better than what was out there.
To quote Richard Kiyosaki, "anything worth doing is worth doing poorly". Because of this, the 80/20 rule is best applied to the world as a whole. And it's terrible at determining target markets.