The more things change, the more things don't change. This week's series of cartoons, Doonesbury, which have been rerun on weekdays for the past few years, was from 1995. At the time Windows 95 appeared, one of the characters in the series pointed out the superiority of the Apple Macintosh, but the reality was Microsoft's reinforcement of its platform dominance.
After 25 years, Apple has become the world's most valuable and widely used company, but some haven't changed that much. "We don't have a dominant share in any market," Apple CEO Tim Cook said in a recent earnings announcement. Cook particularly emphasized the iPhone, which is the ``small number'' in the smartphone market compared to Android, but the same applies to the Mac. However, Apple maintains a considerable position, unlike its 'small' share.
Cook sees this as an opportunity for Apple. That's because most people aren't customers yet, meaning they're 'potential' customers. And this theory is proven by numbers. For several years, Apple has reported that about half of Mac or iPad buyers each quarter use the product for the first time.
But no matter how high the potential, how could you convince people who haven't used Apple products yet?
Hell's Ice Water Strategy
Even those who don't use Apple devices are getting more and more difficult to get out of the Apple ecosystem. With 1.65 billion units in use, at least some of the people around you are probably using iPhones. Especially in the market where Apple is firmly established.
With Apple's recent focus on services, Apple has moved beyond the 'comfort zone' and is expanding its brand to more and more other platforms. When Apple Music was released in 2015, for example, Apple provided services to Android as well as its own devices. More recently, it has partnered with smart TV makers, game consoles, and competing set-top box makers to offer Apple TV+. He correctly recognized the need to reach out to other people beyond existing Apple customers.
From iTunes in the iPod era to iCloud for Windows, Apple has existed within Windows for a long time. This was part of a strategy that Steve Jobs called "a cup of hellish ice water." It gives people a glimpse of what life over the fence is like. And Apple continues to expand its reach. According to recent rumors, it is expected to provide the iCloud Keychain password manager, which was only available on Apple devices, to the Microsoft platform through the Chrome extension.
Experience-first strategy
Once the needle is inserted, Apple does what a good company does. It's competition. But Apple's expertise comes from prioritizing the 'experience' of technology. You might convince someone by talking about quantitative specs like memory and processor speed, but Apple knows that it's far more advantageous to emphasize the qualitative aspects: ease of use, great design, and privacy.
These differentiating factors are particularly strong in areas where Apple has traditionally been weak. Privacy is a good example. Apple's biggest competitors have grown their businesses on advertising in recent years, and users are realizing how invasive, destructive, and risky such data collection can be. (To be fair, Apple helped make this part known.)
This is a restructuring of the narrative, and the smartphone market is no longer a 'luxury' market, but a necessity, making it a wise decision. Like automakers, Apple emphasizes not just how strong the horsepower is, but how good the ride is and how convenient the cup holder is.
Secret source: execution power
All of this won't mean anything unless Apple actually fulfills its claims, and this is where Apple's competitive advantage comes into play. When asked by an analyst during last week's earnings release how Apple is deciding to enter a whole new market, Tim Cook said it has its expertise in hardware, software and services, and that it is entering a field where it can differentiate. (Personally, Apple's retail store is an important factor. It's not right now, but it's a space where you can showcase your products in an attractive and carefully controlled environment.)
This unity of purpose is the great potential of the Apple ecosystem. Apple isn't always successful, but the combination of this 'ice water' and narrative reorganization continues to attract new customers. Above all, it will be difficult to refute a company that makes $100 billion in three months.
0 Comments