We’re witnessing an interesting transformation of Apple. For most of its life, Apple has been content to capture less than 5% of the market for its products. When I worked there, we used to compare ourselves to BMW or Volvo – great brands with little market share but fiercely loyal customers.
But now Apple has huge success with the iPod and iTunes (two products – by the way – that we never envisaged to do for the company what they are currently doing) and suddenly they are the market share leader in MP3 players and digital music. That success leads everyone to expects Apple to be a huge hit in any market it puts its sights on – especially mobile phones and a market ten times bigger than music. But that’s not in Apple’s DNA. Those expectations put tremendous pressure on the company to innovate at a faster rate and to focus more on market share than it ever has before. That explains the rapid price drop on the iPhone. The strategy seems to be working for now, but is it sustainable?
Funny thing is, most people identify with Apple as the underdog – and most (Apple and their loyal customers) like it that way. Would your perception of the company change if you woke up tomorrow and Apple was the undisputed leader in music, movies, mobile and computers? Stay tuned…
I must admit that part of me likes Apple the way that it is. The misfit who does things a certain way not just because we like to be different, but because it is elegant and innovative whereas the hoi poli never venture off soundings.
Would Apple change of became a 600 pound gorilla. Suppose then all of sudden something happens to Steve Jobs and bean counters take over the decisions. Apple could end up like General Motors, MicroSoft, Kraft Foods, selling stuff that works, but no longer has a cutting edge.
I agree. If Apple becomes the Toyota or Marriott of the electronics world then they will grow not only market share but their infrastructure to a point where bureacracy will replace the creativity they have now.
As long as they continue to put the customer experience first and set the bar for quality products, I believe they can be who they are now regardless of market share. We saw what happened when “corporate” guys ran the show in the warly 90s. This is a company that must create and not just produce.
Not to hijack the comments or anything, Steve, but what DID you envisage the iPod and iTunes to do? 🙂
Good question Matt. I wasn’t involved with the iPod. The story there is it was “invented” by a new hire from another company then shown to senior management. iTunes was actually SoundJam, acquired from Casady & Greene (http://en.wikipedia.org/wiki/Casady_&_Greene) Putting them together was a means to an end: make it doggy ducky simple to get music into your pocket.
There was no plan at that time to dominate music or provide online music or video downloads. No concept of Apple TV or video iPods. When you look at it now you must think those were always in the cards.
Funny thing is, the iPod was arguably the first computing device to require another (a Mac with FireWire) to use. Yet in spite of that hurdle, and initiallly being Mac-only (original intent, and the current intent of all the other iLife apps: sell more Macs), the power of having ALL your music with you ALL the time changed people’s habits. Once you tried someone else’s iPod you knew you wanted one. Chapter One in my eBook…http://www.marketingapple.com/marketing_apple/the-marketingapple-ebook.html
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