APPLE

Hax

 Best products: great features, great user interface and ease of data synchronization across APPLE
iProduct, best designs, high quality, supply chain efficiency, improved battery
 Total customer solutions: compatibility, interface and synchronization, innovation-driven, great
customer service, APPLE store “experience”, complete product range, create new customer
needs (“pull-effect”) through continuous innovation
 System lock-in: iTunes/iProducts complementarity with myriad of Apps developers, management
invites all complementors/Apps developers to symposia/fairs/annual meetings, mutually
reinforcing, lock-in customers/consumers

Greenwald & Kahn

 Product characteristics and complementarities “pull” customer/consumer demand and create

barriers-to-entry
 Supply chain efficiency and global sourcing creates economies of scale and scope and
competitive advantage

Cusumano

 Platforms: iTunes/iProducts plus complementary Apps

 Services: APPLE-store experience, replacement & return policy?
 Capabilities: design, core technology/core product concept of iPhone leading to possible new
products into the future (e.g. APPLE-watches), etc.
 Pull: through design, features, synchronization, consumer interface
 Scope: continuous innovation and broad range of product features?
 Flexibility: Flexible design that makes it easier for Apps developers to actively innovate?
 Platform vs standardization: historically standardization of product modules as “platform” to
increase production efficiency; new/future “platform strategy” leverages on network
externalities and pull-effects to incentivize and make it economically attractive for
complementary product/services providers (e.g. Apps developers) to supply their products and
services through APPLE’s iProducts platforms, thus creating an industry standard

Disrupted products

 Music, films, cameras and photography, personal organizers, personal computers (partially), etc.

Weaknesses

 Closed and exclusive system, incompatible with other outside products/services/systems eg

Windows/Android-based: while great customer interface, ease of use and broad products &
services range is historical strength, in future consumers may start feeling constrained. Thus
exclusivity, internal compatibility and network effects could become disadvantage due to
external incompatibility
 Dependency on one major product group (iPhone/iPad?)
 High price, weakness or strategy? In the past premium pricing was a strength to create sense of
exclusivity, differentiation and quality, but as competitors become increasingly sophisticated
and innovate as well, APPLE’s differentiation lead/gap may diminish thus reducing ability to
charge premium price. At some point high price could become a weakness too
 New innovation IPhone X may be driven by new technology (e.g. face recognition) but may not
necessarily be appreciated and needed by customers?
 Weak performance of APPLE smart-watch: Is this a design/product weakness, or an industry
segment that is still in flux and evolutionary phase, where no industry standard has been
identified yet (i.e. is a smart watch sufficiently important so that it can substitute the use of
smart phones for certain consumer uses/segments?)

Strategy for the future

 Require radical innovation that transforms customer perception and utility, e.g. smart-clothes,
APPLE-automobiles, APPLE-wearables or future new products that can substitute current
products?
 Must be careful to avoid dominance of iProducts divisions inside APPLE’s organization to
impede future innovation for fear of displacement/self-cannibalization

Note: bolded phrases mark concepts to be discussed in subsequent lectures.