As I wrote last week, strategy is about making choices, and Apple has decided to not even pretend to pursue market share, but instead embrace their up-market status. As long as they retain their app advantage, this will obviously be a profitable choice.
More importantly, it’s Apple doubling-down on what they are best at. I have railed against Blackberry and Nokia for trying to compete in areas they weren’t great at (OSs), instead of focusing on their strengths. Apple is doing just the opposite. They are avoiding a market share fight, which is ultimately about price and compromise, and are instead focusing on the experience of using their products and the advantages accrued by being fully integrated from the chipset to iTunes.
Ben Thompson writing about Microsoft acquiring Nokia nails it, I think:
I theorize that Nokia was either going to switch to Android or on the verge of going bankrupt. (I suspect the latter: part of the deal included €1.5 billion in financing available to Nokia immediately). And, had Nokia abandoned Windows Phone, then Windows Phone would be dead.
Limiting design choices to things that can scale infinitely at near-zero cost is a recipe for making mediocre products.
He has a bunch of good points there. Your situation will probably be different but it makes sense to try to look at the points he makes from your perspective.
Kathy Sierra writing for gapingvoid:
“The key to understanding (and ultimately benefitting from) true “customer loyalty” is to recognize and respect that customers–as people – are deeply loyal to themselves and those they love, but not to products and brands. They are loyal to their own values and the (relatively few) people and causes they truly believe in. What looks and feels like loyalty to a product, brand, company, etc. is driven by what that product, service, brand says about who we are and what we value.”
But in reality – and this touches on many of the themes of this blog – an overt focus on product similarities misses many crucial factors that, in my opinion, make iPhones and iPads very different. In fact, I believe the business we should be looking at to understand where Apple might take the iPad is the iPod, not the iPhone.
If you are interested in business thinking at all, read it.
Another great post by Ben Thompson over at stratēchery:
Steve Ballmer restructured Microsoft yesterday as a functional organization. The immensity of this change can not be understated, nor can the risks. Ultimately, I believe the reorganization will paralyze the company and hasten its decline.
Ben Thompson over at stratēchery:
It’s games like Candy Crush Saga – free, with in-app purchase – that are fueling much of that $10 billion. According to App Annie, for the iPhone:
– 95 out of the top 100 grossing apps feature in-app purchase
– 79 out of the top 100 grossing apps are free to download
The numbers are broadly similar on Android, with an even sharper skewing towards free: 96 out of 100 of the top 100 grossing apps are free to download.
For my czech readers Tomáš Baťa needs no introduction, for the foreigners here: He is czech version of Henry Ford, for shoe industry, and more morally grounded one.
Nice people in Tomas Bata University Library, Audioknihy.net and Tomas Bata Foundation with the financial support of Tomas Bata University in Zlin has produced free audiobook. Profesionally read by Alfred Strejček in czech version and by Josef Guruncz in the english.
You don’t have to analyze the bottle like I just did to understand that it is well designed. You know it, because you can see the bottle, feel it, and use all of its features immediately. You can see where it starts and ends. It is not complicated. It is in balance with its purpose. Imagine a bottle without a spout or a bottle that was burning hot or a bottle that was as slippery as ice. Every reasonable person would know that wouldn’t work.
Contrast that with software. What are the criteria for evaluating software? Software doesn’t have mass. It doesn’t have shape. It doesn’t cast shadows. It has no edges. It has no size. You can’t pick it up. You can’t feel it. It doesn’t obey the laws of physics. It’s not really even there. Nothing is pushing back, saying, “That’s a bad idea; that won’t work; that’s going to burn someone or hurt someone or make someone drop it or…” Almost none of the tools we’ve developed to evaluate physical objects apply to software.
This is why most software goes bad over time.
Benedict Evans has an interesting view of Google’s strategy:
In other words, Android, like Plus, allows Google to tie searches and advertising to individual people and places. In the long term, the data that Google gets from Android users is probably just as important as Pagerank in understanding intent and relevance in search.
Hence, the real structural benefit to Google from Android now comes from the understanding it gives of actual users, and the threat comes from devices that do not provide this data – even if, like the iPhone, they do provide plenty of search traffic.
Via Daring Fireball
I was fortunate enough to get to talk at Future of Web Apps + Future of Web Design double conference in Prague. First, I would like to thank to Future Insights (previously Carsonified) and personally to Cat Clark for the trust in me to give me the speakers wild card.
Bellow are my slides and complete text of my 30 minutes speech. I spoke from memory so I have probably digressed on a few places. Also, please, forgive any typos or grammatical errors I’m basically posting my notes and I had no time to do thorough proofreading.
In an article “A Trillion-Dollar Transfer Of Wealth Is About To Hit Silicon Valley” Dan Lyons writes something I happen to be in agreement with for last 6 years:
Enterprise customers have been locked into overpriced, underperforming software and equipment for a decade or more, and the’ve been loath to spend money to change things. But now it seems a huge transformation is about to occur, driven by mobile devices, cloud platforms and the software-as-a-service business model.
But his vision is too narrow. This is not just about building better products against SAP or Microsoft. This is about opening whole new market niches which couldn’t be approached before. Ultimately it will be about more than trillion dollars.
Coincidentally, I will be speaking about this next week at FOWA in Prague.
Paul Graham has written another one of his essays.
Live in the future and build what seems interesting. Strange as it sounds, that’s the real recipe.
Good write-up of the thinking behind the basics of SaaS pricing models by Ray Grieselhuber.
As a startup, if you want to survive, you have to pick a model. Everybody starts off by thinking they are low on the complexity scale (“our product is simple!”) so they believe self-service is an efficient model for them. But complexity, in this discussion, has nothing to do with simplicity in the user experience (elusive in its own right) but the complexity of your user acquisition and total cost of service.
Easy could mean faster. Easier could mean more obvious. Easy could mean a lot of things. But the part of easy I like is when you take an existing problem, study it until it becomes clear, toss out everything that makes it blurry, and carefully polish what’s left over.
I’ve been thinking a lot about this lately because we’re finishing up a brand new product. In some ways it’s entirely new territory for us, but in other ways it’s familiar.
— Jason Fried, Signal vs. Noise
I agree with his point and am looking forward to the new product. I bet I will learn something from 37signals again.
Just one of the many thoughts: The cycle of disruption – When product is not good enough (in disruption theory kind of sense) the market tends to be better for integrated player (e.g. Apple). If a product is good enough it tends to favor modularization. Modularization in turn leads to being open for disruption (not just) from your suppliers that integrate in some new way. And we are at the beggining of a new cycle with new integrated player.