Steve Jobs: The Innovation Paradox

I’m already very late in writing an homage to Steve Jobs, so let me take a different angle…

Steve Jobs may represent the most successful example of a man and his company being able to maximize the profit from innovation. He and Apple have done this by taking an approach to innovation that appears to be a paradox: Steve Jobs was extremely innovative and extremely anti-innovation.

That Jobs was innovative hardly needs to be explained. He truly invented and reinvented industries over and over again. Years

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ago, I observed that Apple was great at introducing products that had great design, were first of their kind to truly appeal to the mass market, and that broke down traditional barriers. Over the years, I think the company has proven those points time and again. However, what I missed then was the nature of the boundary breaking… Jobs created and reinvented industries by breaking down the barriers between the digital and analog worlds.

Look at the industries that have been completely redefined by Jobs and his companies: personal computers (Apple II, the first mass market personal computer and the foundation of everything that followed), publishing (the shift to desktop publishing ushered in by the Mac), music (mass market adoption of digital music thanks to iPod/iTunes), movies (broad adoption of CGI-animation, led by Pixar), photography (Apple was a bit later to the party on this one, but the iPhone helped cement the role of the cameraphone), and telephony (or whatever you want to call this industry that connects the devices that are now central to our lives).

Bottom line, Jobs was a master at leveraging incredible design instincts to turn nascent ideas into mass market hits, and in the process completely redefining industries. That’s why I believe he was extremely innovative.

However, Steve and Apple have also been extremely anti-innovation. Not long ago I observed that Apple suffers from Big Bell Dogma. I summarized it this way:

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They want to put constraints on how innovation can happen so that they dominate the ecosystem and extract the most value.”

We have seen it time and again. They limit how their innovation can be leveraged. No one but Apple can make a device running iOS. Only a select few carriers can sell it, and then under far more stringent parameters than any other phone OEM imposes. Apple regularly tweaks the rules under which developers can operate – each time shutting down one or more areas of innovation that are threatening to the company. Apple sues competitors seemingly to keep their products out of the market. All of these actions put constraints on innovation. Without these constraints, there would be much more innovation in the ecosystem, but not necessarily to Apple’s benefit.

Which brings me back to my original point. Apple, perhaps uniquely, does an excellent job of monetizing innovation precisely because of this innovation paradox. The company focuses (i.e. actually deselects distractions) on innovating to create insanely great products (usually building on the innovations of those that went before them), and then protects their financial benefit from that innovation using every possible means (great marketing, carefully constructed legal agreements with complimentary partners, full legal enforcement of intellectual property, etc.).

Who knows if Apple, the company, has so fully integrated the nuances of this model to continue to enjoy its fruits for years to come, and who knows if the strategy will actually pay off with the current spate of patent

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disputes and developer decisions, but part of Steve Job’s legacy will undoubtedly be his mastery of this innovation paradox.

16 Responses to “Steve Jobs: The Innovation Paradox”

  1. Ariel says:


    Thanks for your thoughts on this interesting issue. I was interested in the theory that Apple is anti-innovation, but I think that you’ve missed the mark by confusing competition with innovation. Some of the arguments you cite actually work against the anti-innovation argument and have persuaded me that Apple has been the source of more innovation than you gave them credit for — responsible for innovation in Apple’s products (directly, which you recognized) as well as providing motivation for others to innovate (indirectly, which I don’t think you see in your post).

    The idea that a “select few carriers can sell it” — well, perhaps this was true at first, but certainly now the carriers that don’t carry an iPhone are the “select few,” right? But even accepting your point, which was true when the iPhone first came out, didn’t this cause other carriers to come up with something else that would be equally if not more appealing?

    To illustrate, take your company (of which I am a happy customer), Sprint, which up until this week has had to compete without the benefit of the iPhone. In the absence of the iPhone, we saw Sprint carry the first 4G phone, a foldable tablet, and a phone that powers a laptop. Not all of these translated into commercial success, but they were certainly innovative. By not having the iPhone, didn’t Sprint have additional motivation to innovate in these ways?

    The point about Apple suing competitors, and I assume you mean cases like attempting to block Samsung from selling in certain markets, aren’t these cases based on the idea that Samsung has essentially copied Apple’s design? And by doing so, Samsung has failed to be innovative enough?

    Apple of course benefits financially by not allowing others to simply duplicate their products, but by preventing duplication, doesn’t this spur more innovation? If Apple had allowed other companies to run iOS on their devices, a point which you claim is anti-innovation, I don’t think we would see the vibrant Android offerings we see today. We might not see RIM trying to innovate as feverishly as it is (why should they if they could just put iOS on their devices? They are already offering some Android compatibility, why not go the whole nine yards?). If the iPhone and Android hadn’t been the source of so much innovation themselves, I don’t imagine we would see Microsoft partnering with Nokia to offer a third fantastically innovative OS (Windows Phone 7) on fantastically innovative hardware (nobody confuses Nokia hardware with anyone else’s).

    Apple is not anti-innovative, they are anti-duplication. Competitors have more incentive to innovate precisely because they can’t simply copy Apple.

    – Ariel

  2. Russ says:


    You make some excellent points, however, I don’t fully buy your argument (and you didn’t go down the one path I would’ve totally agreed with).

    Here’s where I think we agree:
    – Apple is directly innovative.
    – Apple’s success forces others to be innovative to compete with their success.

    The piece we both missed is:
    – Apple encourages some (e.g. app developers) to be innovative (at least until Apple thinks they are moving into a profit opportunity Apple wants to own).

    Here’s where we disagree:
    – Apple has no interest in competitors being innovative.
    – In fact, if they could, Apple would eliminate all competitors (what company wouldn’t…)

    In that respect, Apple’s behavior is:
    – First very innovative,
    – Then very anti-innovation

    I’m not saying this is the wrong behavior for Apple, in fact, I think because they act this way more strongly than any other company (only Qualcomm comes to mind as similar), they do an incredible job of translating their innovation into shareholder returns.



  3. Ariel says:

    Hi Russ,

    Thanks for the thoughtful reply. I agree — I didn’t mention the developer space, though $3 billion paid to developers since the App Store inception is an impressive number. It would be hard to figure out the money paid to Android developers because there are more sources (Android Market, Amazon, others?).

    I also agree that I don’t think Apple has any direct interest in fostering innovation in their competitors. They only care about their own innovations (and perhaps others’ insofar as copying others when Apple can and it makes sense).

    My point was more about the effect of Apple on motivating their competitors to innovate, an effect that seems to be a net positive. One way to think about it is what would the tech world look like without Apple? Would there be more innovation or less? Of course, it’s impossible to answer this question definitively so I am only speculating, but I find it hard to believe that there would be more overall innovation without Apple. For that to be true, then RIM, HTC, Samsung, (maybe even parts suppliers? You mentioned Qualcomm) etc. would all have waay cooler more innovative products, etc. if only Apple weren’t there to stifle those innovations.

    Now, after having reread what I just wrote and thinking about it a little more, what I am saying is that Apple has had a *net* positive effect on innovation, but that still leaves room for some anti-innovation negative effects, which is maybe what you were pointing out to begin with. I think you are probably right in this respect, though I have a hard time thinking about what specific anti-innovation effects Apple has had without also implicating the anti-innovative effects that the entire U.S. patent system seems to have (despite being designed to promote innovation!). That, of course, is another story (or at least a separate blog entry).

    Thanks again,

  4. PaulHTX says:

    I appreciate your homage to Steve Jobs, Russ. He was a great executive, and an insurmountable creative force in our world. He was also greedy. I don’t neccessarily mean that in a bad way. I certainly don’t mean to make him sound evil. But his attitude, the premise from which he operated, was “my way or the highway.” You can frame that argument as “domination of the ecosystem,” but it still comes down to Steve Jobs did what was good for Apple, including his innovations. The fact that consumers benefitted was secondary.

    The arrival of the iPhone on Sprint has me in a quandary. My wife pretty much insists that she have one. I don’t mind. I think they are neat. I kinda want one myself. But then I think about having to buy Apple accessories, cables, etc., and worst of all, loading iTumes on my PC. That program has turned every computer I’ve ever used into a slow dog. It really sours the deal for me. But Apple will get my money, and I will probably end up buying a macbook for my wife to run itunes on, all because it’s “Apple’s way or the highway.”

  5. Rashaad Jones says:

    I’m slightly impressed that a VP of strategy for one of the biggest corporations inside the U.S. is willing to openly answer questions or take in an opposing perspectives on a public blog.

    What’s your reasoning for this? To point out that businesses like Sprint are run by real breathing humans with qualities like the every day man. Connect to the customer base?

    Or to give insight into Sprints decisions perhaps?

  6. Russ says:


    Good question. The blog started as a place for me to share my observations on mobility and how it was impacting all industries. That became a book.

    Along the way, all employees were encouraged to share the Sprint referral offer to everyone we encounter (which included the readers on my blog). Through that thousands of new customers have come to Sprint.

    Those customers started asking questions and asking for help with challenges. I’m more than happy to help.

    It really has been valuable:
    – It’s brought in new customers.
    – It’s helped improve the customer experience.
    – I’ve heard some good ideas from customers.
    – I’ve gotten a great perspective on what’s good (and what’s less good) about being a Sprint customer.
    – In general, it’s helped me view the world through the eyes of the customer (and at times be able to bridge the gap, explaining things to customers in a way that makes more sense than how we’re officially explaining it).

    Thanks for asking.

  7. Zach Gretcher says:

    Russ, I find it disheartening that your company has a pretty big gap of good or what I guess some call “high-end” 3G smartphones or a good selection of 3G phones at all for sale.

    I mean there’s 4G but Verizon’s LTE is shown to be superior and from google there were a ton of articles saying Sprint’s moving on from their current tech called Wimax. And from friends I’ve learned that it’s a large battery killer anyways and the $300 marks for all 4G phones weren’t worth it. I don’t really use data on the go anyways. Always have wifi whether at work or home and it’s way more screaming fast than 3G so 4G isn’t something I want yet.

    As a Verizon customer I looked recently into Sprint’s coverage and found it was pretty much on par and nice rates to boot that I calculated even if it’s maybe a mere $10 less a month over a contract period would be a nice few hundred bucks to keep in my wallet.

    So I drove a few days ago to a Sprint store whose directions I got from Google and walked in. Employees were helpful enough though strike me as a little dumb to say the least. Really what I could find were phones like LG Marqee or HTC Arrive and apparently they were best of the bunch. The employees cautioned me of the Arrive and said the OS was unpopular with other customers. There were some Blackberries and about it.

    The lack of selection was really odd for me. I have an HTC Incredible and apparently this Marqee thing that recently just launched has pretty much the same specs and it’s the tail end of 2011. I’m not willing to dish out money that for the same price can get me one of the best phones currently out on V.

    Maybe I’m just used to walking into one of Verizons stores and being overwhelmed with a ton of exciting choices from HTC and Samsung. And it’s not like those phones aren’t cool and don’t sell. They do, it takes me hours just to get a rep to speak with. So you’d think Sprint would also have a great selection.

    I looked at your 4G lineup too and it was fine but I’m not interested in a service that’ll get replaced soon. Plus I imagine 3G customers make up the bulk for all carriers compared to this new 4G services so in the end it’s all perplexing that Sprint doesn’t have any high-end stuff from people like HTC or other good manufacturers.

    I mean I’ve been out of contract for a few months and I’ve been looking at Sprint and T-Mobile as choices since I live in a great area covered by all carriers. It’s not like I don’t have 200 dollars to spend on a new phone either. Sprint doesn’t seem to really cater to people who want great phones on 3G though like on Verizon which kind of is a drag.

    Really do hope you guys launch something good Russ because I’m ready to upgrade right now and probably will either buy something new on Verizon or if you guys or T-Mobile have something good join up with you. Hoping to get some insight so you guys don’t launch something great and I go Doh! and have any regret since whatever I go with with I’m stuck to for 2 years.

  8. Russ says:

    Zach – one of us is really confused…

    I don’t understand why you’re shopping for a 3G-only phone. All of our 4G phones work perfectly well on our 3G network (and WiFi). We don’t charge extra on a monthly basis for 4G. And, if you really don’t want to use our 4G network, you can easily turn 4G off, so why wouldn’t you be looking at our awesome lineup of 4G devices?

    We launched 4G back in 2008 (~2 years ahead of Verizon, ~3 years ahead of AT&T, and T-Mobile doesn’t have enough spectrum to ever launch 4G – as they’ve explained to regulators), so for the past couple of years, (almost) all of our great phones have had 4G built in. The one exception is the iPhone.

    So, if you’re willing to look at our 4G portfolio (which will work perfectly well on our 3G network), here are our top phones:
    – iPhone 4S
    – iPhone 4
    – HTC EVO 4G
    – Samsung Galaxy S II Epic Touch
    – HTC EVO 3D
    – Samsung Epic 4G
    – Samsung Conquer 4G
    – HTC EVO Design 4G
    – Motorola PHOTON 4G
    – Samsung Nexus S 4G
    (except for some iPhone models, all of these are less than $200)

    You have to admit, that’s an awesome lineup of devices and miles ahead of the Marquee and Arrive.

    BTW – our WiMax 4G network will continue to be available for our customers for years to come, even as we build out our LTE network.

    So, what am I missing?

  9. Zach Gretcher says:

    Just that you’ve named 4G devices that do cost extra. I was told in the Sprint store that ontop of the $99 everything plan I was informed there was a $10 smartphone fee for per month (They told me it wasn’t there before but is new and applies to all smartphones. I was fine with that) and for 4G there’s another $10 fee for data. So $120 + taxes.

    That’s what I was told.

    So if I got it right there’s no extra fee for 4G? Also thanks it’s nice to now 4G can be turned off. If there’s no extra fee for 4G data like on Verizon I’m willing to buy a 4G device.

    But if there is I can wait since again I heard there’s some serious battery life stuff from quite a few co-workers and friends. As in 2-3 hours before the cell’s dead. And like you said LTE is coming so I can wait for that since again I work in a stuffed office all day so there’s wifi there and at home and it’s a ton fast. Faster than what I get on V any day of the week.

    Either way I’m shopping in the $199 zone which is basically the price of all high-end phones. I’m not really interested in an iPhone because I own an iPad 2 and Mac as it is. If not I would of bought it since the reps did tell me it’s a 3G phone.

    Fact that you didn’t point me to any 3G devices is kind of what I’m getting at Russ. On Verizon I have choices for everything from Droid Incredible 2 to Motorola Droid X 2 which pretty much are on par with your 4G devices barring speed. I don’t know if 4G is for anything else other than speed but every rep I’ve talked to always tries to sell me on quote how zooming fast it is so that’s what I assume.

    Thanks for getting back to me by the way. Appreciate it. Deciding between 3 carriers is a toughy. I’m talking between a T-Mobile rep and you basically. T-Mobile seems to have a great 3G selection. Problem is their coverage just a few miles away out gets bad. And I visit a lot of family in the troubled areas. I’m pretty picky about dropped calls. Which is why I left Cingular for Verizon.

    Sprint’s ideal to save some money and get good coverage close to Verizon’s. My friend with the Evo 3D says he’s only ever had three dropped calls. It seems like you guys and T-Mobile are on opposite ends of problems.

  10. Russ says:

    Zach – the $10 fee is for 3G or 4G smartphones, so there’s nothing extra for 4G. You might want to look at the Everything Data plan for $69.99 for 450 anytime minutes – plus any call to any mobile phone (including Verizon, AT&T, T-Mobile) is free plus the $10 smartphone fee. That will save you $30 over Simply Everything unless you make lots of calls to landline phones during the day. Or better, yet, feel free to use my e-mail address ( and CID (383) at to save another $10 and get an extra 50 minutes.

    I still don’t understand why you’re complaining that I didn’t point to any 3G devices. Who would buy a 3G-only phone if they can get an awesome 4G phone (and just use it on 3G, if that’s what they want) for anywhere from $99 to $199?

    Of course Verizon has lots of 3G-only phones because they haven’t had 4G as long as Sprint has. I bet within a year none of their high end phones will be 3G-only, why should they be?

    The “zooming fast” comment was probably referencing a combination of network speed and processor speed. Even on 3G, a high end smartphone with a fast processor will seem to work a lot faster than a lower end smartphone with a slower processor.

    If you’re interested in the Droid X2, you might check out the Photon 4g – see this comparison:

    If you’re interested in the Incredible 2, you might check out the Epic Touch – compare to

    I hope this helps!

  11. aikanae says:

    Your missing one focus of Jobs success; good design is more than how an item looks. It’s how it works too. Apple focused on the user experience. The sacrifice of doing so involved integrating software and hardware tightly together so that the customer wouldn’t need to deal with conflicts that results from fractured “innovations” or developments from multiple sources.

    It works. A 4yr old can operate an iphone. People are free to get on with their lives v. wasting their time trying to figure out their phone. Sadly no other phone manufacturer has seen this as a competitive feature to emulate.

    I would like to see more competition for Apple but as long as key features, like user friendlenes are dismissed as “fads” it won’t happen anytime soon.

    I’m one of those customers narrowly saved by Sprint getting the iphone because I was so frustrated by Blackberries and Androids. I want simple and what works enough to pay for it. What’s the point of a phone plan at any price if the phone isn’t a joy to use? iPhone’s are a joy to use.

  12. Cody says:

    I agree with Mr.Gretcher but I’m already a present customer. I know quite a few people who do want better 3G handsets because let’s face it, no matter how much you hype up 4G 3G has a ton of customers still. Plus Wimax was proven to be pretty behind LTE even from people Sprint sponsors/like to quote like Engadget and Gizmodo. Even if Wimax/2 is the definition of 4G it pales to LTE which your building up atm. And the world standard will be LTE.

    What that means is Sprint is pretty much duping current customers running off Clearwire’s network even if they’re duping cheaper than Ma Bell and Big Red.

    But to Zach if your reading this I guess you might as well spring for 4G since all smartphone users carry the cost. When Evo 4G was intro’d in 2010 as the first 4G handset only 4G handsets took an extra data fee. After complaining and Sprint denying it was a “4G tax” they decided to spring the fee for everyone else so everyone pays the same which was a dirty trick. Getting the iPhone on the network and keeping unlimited data had a part in this.

    Watch out though that 4G is unlimited but 3G has an artificial cap: 5 GB. If you exceed 5 GB’s Sprint has the right to terminate you. So in many ways they falsely advertise they don’t cap or throttle like the Twin Bells and T-Mobile. They just kick you out.

    Fun Fact: Twin bells refer to Verizon and AT&T. Both are basically reshaped remnants of the broken up AT&T monopoly of old.

    That said Sprint’s a great service. It’s just that their network isn’t impressive. You don’t get the pure speed of data like Verizon, AT&T, and T-Mobile.

    What you get is -reliability- and kind of a cheaper bill. So I would recommend Sprint. But never glorify them more than they deserve.

    Oh and one more thing, hope you don’t miss the referral plan offer on Russ’s site. Would be a missed opportunity as you’re on one of Sprint’s leader’s websites already. The referral plan if you don’t know gets you a discounted plan separate from other customers and does give some nice savings through a contract. Go to the website, enter the code, and sign up. That is if you decided to go to Sprint Nextel over the other Big 3.

    Hope I’ve helped you make an informed decision and that you can help others.

    Back to you Mr. Vice President of Strategy. The plight for new 3G handsets by a good portion of customers is true and the grudge against Sprint for applying the smartphone tax to all 3G handsets is true. It’ll be awhile before it shifts as with 2G to 3G customers.

    I want to move on a moment to the SERO Premium plan There’s one little tidbit Sprint missed in its confusion to define extra fees. SERO Premium was introduced close to the $10 tax and fills in the role of being the $10 tax for smartphones upped from regular SERO while opening up top tier 3G phones to customers. But the extra other $10’s fills in the 4G data role.

    This ultimately shows these two are seperate taxes and Sprint took the oppurtunity to charge customers more. It’s now “fair” to all customers but now everyone takes the burden of a 4G network rollout and the few who use the most data.

    Bad show on Sprint’s part not to clarify motives.

    I also do hope new handsets aren’t outfitted with Wimax. Sure you’ll run the two networks simultaneously but like iDen one day it”ll become a burden. 3G-only or a locked LTE option that can become unlocked by customer choice when LTE launched in mid-2012 is a better idea.

    Otherwise I can see backlash from the usual standard 2 year customers where suddenly the 4G that was hailed as the best and first 4G network is replaced by the standard AT&T and Verizon were advertising all along.

  13. Russ says:

    Cody – I still don’t get this hang up with 3G phones. All our 4G phones are 3G phones and work perfectly well on our 3G network. If you don’t like our 4G – just turn it off… We’re NOT going to develop high end 3G phones, that’s just foolishness.

    Let me try an analogy. When digital television came out, with High Def, all TV makers started building HD into their high end TVs. It would be foolishness for them to come out with a high end TV that didn’t have HD. For a few years, they still made lower end TVs that didn’t have HD, but all of their high end TVs had HD. Some folks didn’t really want to use HD – maybe they were just watching videos from a VCR, or maybe they only had rabbit ears and couldn’t get any HD stations, but if they wanted a high end TV, they got HD with it. Why would a TV manufacturer make a high end TV that didn’t include HD?

    In the same way, we’ve been selling 4G handsets for over a year now, and since then (except for the iPhone) it would be foolishness to not include 4G in any of our high end handsets. For folks that don’t want to use 4G – no problem, these high end handsets support 3G as well as any 3G-only handsets and it’s easy to turn off the 4G. I understand that no other carriers have been making 4G handsets anywhere close to as long as Sprint, so most of their portfolio is only 3G. THAT DOESN’T MAKE THEIR PORTFOLIO BETTER! That’s like saying a high end Toshiba TV is better than a high end Sony TV, just because the Toshiba LACKS HD. That’s silly. You aren’t paying more for the 4G handset. You aren’t paying more for the 4G service. You’re just getting a 4G option that you can choose to ignore.

  14. SJ says:

    Ive never had a smartphone but I have a mac so Im wondering if you’d recommend an iPhone vs an Android phone. Im assuming it will be similar. I also only have contacts on my Mac Address Book (not gmail or anything so don’t want to have to input that every time I get a new phone)> You should know your customer service reps have been awful at answering questions accurately; its been very frustrating…and Ive been very hesitant of joining Sprint because everything I read is so negative about the data speeds. Sprint reps have denied it – yet every blog reports it – even reporting internal memos acknowledging it. Im also sad to finally see the Sprint CEO admit that unlimited data will end at some time. I was hoping it would last t through the next iPhone introduction since I may not get one till then. I just have been on disability for depression so have to try toe ave money (even though Ill never afford the 1500/day treatment i need) but also friends and family have all abandoned me so you really don’t need a lot of fancy features and social apps if you stay in bed all day and have no one to talk – Thats why Im on prepaid and keep switching to cheaper plans every month with a paid-for phone

  15. Russ says:

    SJ – smartphones aren’t for everyone. They are expensive, and it sounds like you’ve been wise to manage your budget well by sticking with prepaid. If you really want a smartphone, there are some pretty good Android smartphones available on a growing number of prepaid carriers (including Sprint’s Boost and Virgin brands), although they are more expensive than non-smartphones.

    As for the data speed issues, here’s what I know… Every wireless network has places where the network works well and places where it doesn’t. There are places where a Verizon phone works well and a Sprint phone doesn’t, and there are other places where a Sprint phone works well and a Verizon phone doesn’t. (You can substitute AT&T, T-Mobile, US Cellular, etc. into the above sentence and it will still be true.) Here’s an example where, in one place, Sprint had the fastest network:

  16. seeblue says:

    I guess if one lived in a hole and came out and took a snapshot of Apple, one would easily conclude that Apple was an innovation blocker.

    However, a look at Apple’s (and Job’s) history and clearly this has not been a driving force in Apple’s success. This is only a recent phenomena.

    A closer look at Apple Computer history and one will see a cashed strapped wholly innovative company; one which made expensive insanely great products but struggled for user adoption and market share. They almost went belly-up and were driven into obscurity by Microsoft.

    IMO, Apple has been a company that runs in fear. Forget the last 8 years and that’s their DNA. That’s why today’s Apple retains the $80 B war chest, defends its patents and products, has a thumb on the supply chain, and coerces partners. As far as the closed systems, it’s easy to say it’s about control and money, but its more about control of the user experience. When it’s no longer that, they’re done.

    As a long term Apple user, it’s a good day but it is also frightening to witness their success. The media (and everyday Windows users) used to trash Apple as an OS and company. Now, Apple is generally lauded by the media (the same Windows media which used to trash them daily), but called a bully by a subset of consumers.

    I only hope that they don’t get too far away from their roots. They got where they are by playing offense, not defense.

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