Jumping off of the brief question I asked in class yesterday, I’d like to give a brief overview and discussion about something relatively new in the battle for phone, tablet, computer, web, and cloud offerings: ecosystems. 10 years ago, the Shapiro article mentioned the concept of luring customers into an ecosystem, whether closed or open, depending on the model. We see that phenomenon more prevalent today than ever, as (mainly) three companies battle it out for customer’s money, favor, and loyalty.
Apple
No one has ever used the ecosystem model as much as Apple has. Ever since Steve Jobs returned in 1996 to save the company, he wanted to provide its buyers a complete list of Apple products that would work well with each other. Steve Jobs even became annoyed when he had to be convinced to port iTunes to Windows (for greater iPod sales), because he wanted Apple products only to be available for Apple users.
Arguably, Apple’s ecosystem model even extended to before and after a product was purchased through Apple Stores. These locations allowed users to try out products with employees teaching (not selling) them about the computer, and even provided support after it was over, developing the first “ecosystem” model as we know it. This end-to-end interaction and support from Apple helped develop this network effect around its products.
Today, Apple’s ecosystem stretches from the iPod to iCloud. Every single Apple device can sync data, contacts, calendars, and email through iCloud. iPods and iPhones easily synced through iTunes, and nothing else. All users could also message each other using Apple’s free iMessage, restricted only to users of their products. Even though users were restricted to other Apple components using the 30-pin iPod cable (and now Lightning!), FireWire, Thunderbolt, etc. the lure is just too compelling to forgo. And Apple’s comprehensive support facilitated a positive feedback cycle: the more people were satisfied by the product, the more they were able to buy another and refer friends to it.
Why did Apple get people to switch from the dominant format, Windows? Compelling performance, among other things. Macs were generally known to work well (apparently 10x as well), and buying one immediately made you the “cool kid” on the street. Apple’s Performance Play definitely succeeded, though with strong challenges from Microsoft and Google, no one can predict how long Apple will hold on to its appeal.
However, there are some areas where Apple is still lacking in adoption, namely Office suites (iWork vs. Microsoft Office v. Google Docs), video and photo editing (Final Cut Pro v. Adobe Premiere Pro; Aperture v. Lightroom, etc.), mail (iCloud Mail v. Gmail v. Outlook.com [formerly Hotmail]), Objective C, etc. In most of these cases, it’s because compatibility is restricted to its own products, by using proprietary file formats or limiting use to its own software. For these offerings, Apple doesn’t have the 10x performance benefit it has with its other more popular products, thus they still remain niche products.
Apple currently has the lead among the companies listed, but next week, I’ll take a look at Microsoft and Google’s offerings, seeing how they try to compete with Apple to create their own ecosystem.