The problem with such shallow observations and anemic analysis is that critics are not paying attention to history. At least, not the right history. True, Microsoft’s Windows once had about 95-percent marketshare. Where is the Mac today? Android smartphones have about 80-percent marketshare. Where is the iPhone today?
Slicing The Pie For Profit
This is as close to a no-brainer analysis as you can get. While the traditional PC industry is gasping for breath as the post-PC era closes in, Apple’s Mac prospers. Why?
Google brags about Android being on more devices than any OS in history, yet only one smartphone maker actually turns a profit using Android OS and it’s not Google.
What’s going on? Why hasn’t Google, Samsung, Microsoft, HTC, Motorola, Nokia, BlackBerry, and all the cheap Chinese smartphone and tablet manufacturers upended Apple as the dominant manufacturer?
The answer lies in the Mac. At one time, the Mac slipped to about 2-percent marketshare, but Apple didn’t cut prices to compete with cheap Windows plastic PCs. Instead, Apple doubled down on quality.
Aluminum feels much better than plastic. Today, the Mac accounts for about half of the PC industry’s profits and prospers while others worry about even staying in the business.
Apple’s history with the Mac was repeated with iPhone and iPad. Quality. Improved user experience. Vibrant ecosystem. Apple’s are the devices that discriminating customers want and use. How else do you explain the discrepancy between iPhone and iPad users and how much they use their devices compared to the riffraff of Android smartphones and tablets?
How To Beat Apple
Apple set the lead for the modern smartphone with the original iPhone in 2007, but it took a number of years for the diminutive device to change the industry. Today, almost every Android smartphone looks like an iPhone.
How did Apple do that? Can Apple’s competitors do the same thing to Apple? The answer to the former is wrapped up in Apple’s ability to take complicated technology and make it usable. The answer to the latter parallels that aspect– make a better product.
Therein lies the problem every Android-based device manufacturer has today. How can they make their smartphones and tablets better than Apple’s products? They can tack on more features and sell the wares for less. They can strip out features and sell for even less, to the point of not making any profit. What they’re having trouble doing is making their Android devices– the user experience– better than what Apple provides to their customers.
Until Samsung, Google, Microsoft et al come up with a better mouse trap, their efforts to take profits away from Apple will be limited. The user experience, the product cachet just is not the same and it won’t change for Apple’s competitors until they can produce that proverbial better mousetrap.
Differentiation is a pillar of product marketing. To unseat the market leader, a competitor must have a notably better product at about the same price as the leader. Or, a competitor must have about the same feature set and quality but at a notably lower price tag. Apple’s iPhone was a dramatic departure from the smartphones circa 2007. Until competitors can produce a smartphone or tablet experience that is much better than Apple’s, or the same as Apple’s at a much lower price point, Apple will not be unseated.