iPhone and Apple’s Market Strategy

The iPhone was finally released on Friday, allowing the feverish hype and anticipation to give way to experience and analysis. While there have been reports of quirks, the consensus on the device seems favorable.

With iPhones in hands, people can now properly address its impact on the future. Umair Haque, writing at Bubblegeneration, offers his perspective on Apple’s strategy:

1) Pick an industry which sucks (ie, imposes significant nuisance costs/menu costs/externalities on consumers)
2) Redress the imbalance by making something consumers love
3) …Which disrupts the long-standing industry equilibrium, and shifts market power
4) Use said market power to redesign (a hyperefficient) value chain

It is eerily similar to the strategy Apple is using to dominate the music retailing industry with iPod + iTunes. I think things are even more interesting when looked at in the broader context of Apple and its products.

“Three screens” is a common term in the vernacular of the technology industry. It refers to the unique types of displays present on desktop computers, televisions, and mobile devices. These comprise the three devices a typical person interacts with every day.

Each screen presents an interface tailored to the situations it is used in. For example, a computer is actively controlled from within a couple feet, using a keyboard and mouse. Meanwhile, a television is more passive, controlled with a few buttons on a remote control while relaxing on couch.

Apple has now put roots down in each of the categories represented within the three screens. Mac computers are mature and respected. The promising iPhone has now been introduced. Meanwhile, the experimental Apple TV continues to improve.

Apple’s focus on user experience, coupled with their control of both hardware and software, gives them a unique advantage and incredible leverage. With technology’s ever increasing pervasiveness in our lives, Apple’s potential seems almost limitless.

Comments

dh
says:
July 1, 2007 at 12:37 PM

Interesting blog. I couldn’t agree more with your assessment that Apple truly does seem to “focus on user experience” and as a result their “potential seems limitless.” By the way, can I ask here how the rafting went? I guess I did.

Jared Hanson
says:
July 1, 2007 at 1:33 PM

Rafting was fun. We ordered a CD with copies of the digital photos that were taken near two of the rapids. I’ll upload them once the CD arrives in the mail.

Lonna Hanson
says:
July 2, 2007 at 6:55 PM

Jared,
I also enjoyed your entry on the iPhone. I also agree that Apple focuses on user experience. Being a true user of the Apple computer and the only one I have ever used from my beginning computer days, I like not having to relearn and that Apple focuses on user experience. I truly enjoy iPhoto and iTunes and how they are similar and also iFlicks that you wrote and patterned after Apple’s other products. It is truly appreciated by those of us who are committed to Apple’s products. and their organizational tactics.
Mom

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