Apple’s Strategy: The Good and Bad

The four major issues with Apple’s current product line and strategy that are “stifling the industry, consumer choice and pricing”, according to Jason Calacanis:

  1. Destroying MP3 player innovation through anti-competitive practices.
  2. Monopolistic practices in telecommunications.
  3. Draconian App Store policies.
  4. Wanting to own almost every extension of the iPhone platform.

It’s tough to disagree with these points (or Jason’s reasoning) but a typical response could be:

The restrictions Apple places on its products are necessary to ensure the quality of the user experience, that Apple deserves to be paid for the innovations it has brought to the marketplace and the consumer freedom it has enabled to use things like the mobile internet, to make online music easy and fun to use etc.

Both of the above articles are anti-Apple (or at least anti-Apple strategy) and I agree with them both—but my stance is definitely that of pro-Apple (a recent development since owning an iPhone, swiftly followed by a Hackintosh).

The ROI I get with Apple products is positive despite these issues and as such I’m willing to pay a premium. This isn’t a financial ROI, but a time/enjoyment ROI. For an idea of what I mean, this short tirade against open source usability from an article looking at how to compete with open source software (via @zambonini) may help:

At a salaried job making $80k plus benefits your time is worth around $55/hour. […] And thus it is with the majority of open source software:

Open source software is free if your time is worth nothing.

[…] I’ve used mainstream image editors like Photoshop, Paint.NET and Gimp; some of my best friends are mainstream image editors. And when I saw Gimp I almost went blind. Children were weeping; fruit was bruising. The UI could kill small animals.

Are there exceptions in the open source world? Absolutely.

When an open source project gets enough talented people working on it, it can become a downright masterpiece.

In UI and UX terms the majority of open source applications are behind or on par with PC-based software. These are then both behind Mac-only applications. There are exceptions, of course, but they’re exactly that—exceptions.

Granted; there are unnecessary and debilitating restrictions on Apple products, and when these restrictions make product use cumbersome I’ll switch in a heartbeat. But it seems that these restrictions are part of a larger strategy: to build the best user experience.

This, from a TechCrunch article looking at Apple’s strategy:

“Our goal is not to build the most computers. It’s to build the best.”

That was Apple COO Tim Cook two days ago during Apple’s quarterly earnings call. Sure, it may sound like spin from an executive who doesn’t have a better answer as to why Apple isn’t competing in the low-end of the market, and thus, gaining market share. But it’s not.

You need look no further than numbers released today by NPD to understand Apple’s strategy. Its revenue share of the “premium” price market — that is, computers over $1,000 — is a staggering 91%.



2 responses to “Apple’s Strategy: The Good and Bad”

  1. tina

    You’ll switch if you *can*. That was the problem with Microsoft. Everyone was fine with this behavior until they became unhappy with Windows/Office but realized they essentially couldn’t switch. They had a legacy of files for the platform, investments in productivity and knowledge on the platform… I’d argue most people are in this camp now with iPods. They’ve bought Apple DRMd music and videos and speakers and docking stations and they’re now stuck with the platform. Calcanis has the foresight here to see how bad this will get.

  2. Indeed, and I guess I’m one of the lucky few who have migrated through all three of the aforementioned operating systems (Windows, Ubuntu and OS X).

    Because of this, I learnt a long time ago not to to put all of my eggs in one basket (to use a rather tired idiom!):

    I now only own DRM-free music and use applications and hardware that are relatively open and platform-independent. I would guess I’m in the minority (especially when it comes to users of Apple’s ‘wares).