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Apple's Competitive Competitive Advantage: Multiple Products That Integrate as One COLUMN: Doing the Apple Math: iPhone + iPad + Mac = Market Dominance By DAVID MAGEE (/REPORTERS/DAVID-MAG EE) on July 21 2011 2:03 PM MUTE
11 (/apples-c 0 (/apples-competitive-advant (/apples-competitive-advantage-multi ompetitive-advantag -advantagage-multiple-products-i e-multiple-products-int e-multipleple-products-i -products-integrate-one-300605) ntegrate-one-300605) egrate-one-300605) (/apples-competitive
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p more Ć(/apples-competitive 0 (/apples-c ompetitive-advantage-multiple-p -advantage-multiple-products-integ roducts-integrate-one-300605 rate-one-300605)) When analysts analysts and tech industry ex perts tr y t o gauge the lasting lasting strength of Apple's Apple's burgeoning burgeoning smartphone smartphone dominance, dominance, they usuall they usually y take t he obvious route, comparing comparing suspected advancements with the iPhone iPhone a ag gainst ainst competitors including Android Android and Blackberry. The compare smart phone phone to smartphone, try ing to pick pick the winner. But they are missing Apple's secret weapon in comparing comparing Apples to Apples, so to speak. The comparison of smartphone to smartphone is only one reason Apple is pulling away in the smartphone market, with roughly 120 million units sold since the iPhone first went on sale in 2007.
In Case You Missed
The iPhone is obviously popular on its own merits, a touch-screen, app-b ased product that clearly has advantages over the clunkier, more dated Blackberry made by Resear ch in Motion. Motion. But so many exper ts suggesting that Apple's Apple's competitive competitive advantage may wane in the near future in the face of new smart phones phones from Blackberr Blackberr y and others like G oogle's oogle's Android miss the point. Apple recently reached third place in personal personal computer computer sales in the U.S., sellin selling g more Macs the past few quarters than analysts expected. Also, Apple is the leader in the tablet space with its popular iPad. In its most recent quart er, for ex ample, Apple Apple sold 9.52 million million iPads, iPads, and the product has only bee n available for roughly a y ear. Many iPad buyers are first-time Apple customers. Just as many of the nearly four million million buyers who purchased Mac computers in the most recent quarter are first time Apple customers. The reason for Apple's compounding, growing success is a simple multipli multiplier er factor involving customers. customers. Once they buy one product, like like an iPad, Apple's other other products like the iPhone or a laptop computer become a natural. Because the company has focused over the years on seamlessly tyings its hardware and application applicationss together with an integrated operating syst em, one works ve ry much like the other. And many apps r un on one one product just as they run on the other.
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To date, no company has as effectively corraled customers to other seemingly different products by getting them to purchase just one. Before Apple, mobile communication devices wer e made by one company and laptop computers wer e made by another company. T he products had very little in common. But now, Apple customers can barely tell the difference except for t he size of the product. The laptop is big, the tablet is smaller and the smartphone is ev en smaller. Otherwise, how the products operate, and how they share functionality and information seamlessly through connectivity, continuously updating customer's lives through simple plug-in, is very much the same. That's why the Blackberry and manufacturer Research in Motion have a decided disadvantage going forward. T he company talks about how it will update product, with new exciting offerings in the near future, but unless it works with Apple to make it happen, success may be hard to find.
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Just two y ears ago that wasn't the case. Apple had Mac customers. Apple had iPod customers. Apple had iPhone customers. But now, with each adv ance, particularly in regard to the iPhone's evolution and the iPad's launch, Apple moves closer t o market domination across all three spaces like we've nev er seen from one company before. The unilateral strengh is the difference-maker, and some analysts don't yet seem to know how to factor that in. Sure, it wouldn't happen if customers did not like the iPhone on its own merits. It would not happen if customers did not like the iPad for its own merits. And, it would
But put the three together, as millions of more consumers are doing with ever y passing quarter, and Apple has advantage that may be hard for competitors to touch anytime soon.
David Magee is the author of 12 books, including Jeff Immelt and the New GE Way, How Toyota Became #1 , and The John Deere Way. A former columnist for the Chattanooga Times Fr ee... Continue Reading (/reporters/davidmagee)
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not happen if customers did not like the Mac computer for its own merits.
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