That, coupled with Apple’s strategy for win-win relationships gives strong indication that our favorite Mac, iPhone, and iPad maker could revolutionize television in ways we may not expect. When trying to figure something out, it’s good to follow the money trail.
The Win-Win Strategy
Think about how Apple launched the iPhone and upset the entire smartphone industry. First, Apple created leverage with AT&T to get the iPhone in the hands of a large number of customers.
Apple was confident that iPhone users would stream from other cell phone carriers into AT&T’s waiting arms and cash registers.
And they did. By the millions. That leverage was repeated with select cell phone carriers throughout the developed world.
Cell phone carriers without the iPhone in the lineup often suffered severe customer loss. Once the iPhone was added, on favorable terms for Apple, the carrier received financial benefits, too– the losses subsided, and growth and profitability continued.
In the U.S., that happened to Verizon, then Sprint, and now T-Mobile. Apple’s iPhone created an environment where cell phone carriers could charge more money per subscriber, and reduce the churn of losing customers to the competition when contracts ended.
Win-win. That was Apple’s smartphone strategy, and that’s exactly how I see the future of television, Apple style.
The Sliced TV Pie
The television industry is even more balkanized than the cell phone industry. Everyone from TV stations to networks to cable systems to content developers and providers (and actors) have a profitable slice of the industry pie.
Apple knows it cannot simply ship a device that brings TV and movies to every internet-connected home without upsetting the cable systems, producers, TV stations, or networks.
Apple has already learned that there’s no win-win in the arrogance of domination.
Instead, Apple will work (and is known to be working) with each party to ensure they have a seat at Apple’s television table. When it comes to digital content, Apple is really good at delivery, interface, and revenue and profit generation.
What the other parties want is a way to increase their own revenue and profits, and reduce some overhead expenses (cable TV boxes, for example). To get a seat at the digital content table and share the profit pie, Apple must create another, less expensive distribution system, an improved user interface that’s more engaging and friendly, a system that results in more sales, more profits for all those seated at the table now.
Apple is working a new kind of disruption, somewhat akin to the relationship Apple created with the cell phone carriers, in that it’s win-win, instead of a disruption where only the disruptor wins, while the disrupted lose.