It’s an easy question to answer. Apple’s competitors, whether iPhone or iPad or Mac, are many. Yet, year after year, Apple sells ever more products, increases marketshare or unit sales, and literally owns the industry’s profits. How can Apple be beaten?
Simple, But Not Easy
One of the first rules of product marketing is to differentiate your product from a competitor. That can be, and is, handled many different ways.
Compared to competitors in any industry, products are differentiated by price, size, color, feature sets, warranty, sales distribution, customer loyalty, perceived or real value, and many other ways.
As an example, look at the original iPhone and how it was differentiated from the smartphones of the era circa 2007. The iPhone came in at the high end of the product price spectrum, but was differentiated by size and screen and applications.
In short, the original iPhone made using a smartphone far easier and more intuitive than popular smartphones of 2007. That was Apple’s clear differentiation and it stayed that way for years until all smartphones look like an iPhone.
How can Samsung, Google, Microsoft, Lenovo, Motorola, BlackBerry, Xiaomi, HTC or any other smartphone maker top Apple in the marketplace?
Simple, but not easy. It’s differentiation and table stakes. Samsung tried to compete at the premium end of the smartphone spectrum, but was hobbled by Android (which is available on cheaper products) and plastic (not a good way to compare a product to Apple’s finely crafted aluminum).
Differentiation Is Key
In other words, to unseat a market leader, a competitor must provide exactly the same features or functionality and quality at a much lower price. Otherwise, where is the incentive to switch from iPhone to anything else?
Or, as Apple did with the original iPhone, a competitor must provide a demonstrably and obvious improvement to the existing technology standards. That’s not easily done because Apple is not standing still, and Apple’s products are differentiated by price, hardware, software, ecosystem, and distribution.
Competitors can make smartphones that cost less and sell for less than Apple’s premium hardware, but Android OS does not improve much on iOS, Android apps are often considered inferior, and because Android runs on cheaper plastic smartphones it does not have the cache, value, or loyalty afforded Apple.
Simply put, a competitor must make a better product and sell it for the same price, or the same product and sell it for far less. The latter explains why Android devices own the marketshare lead, but also explains why Apple owns the more important profit share lead.
Competitors find it difficult to compete against Apple’s hardware quality at the premium end, and even if Android were as polished and universal as iOS is on Apple’s devices, the perception to the customer is that Android only comes on cheap devices. Microsoft’s Windows has a similar problem. It’s not OS X, so Apple clearly differentiates the Mac from Windows-based PCs, even with similar but lower priced hardware.
Apple can be beaten when competing manufacturers can provide a dramatically improved device at the same price as Apple charges for an iPhone, or, can provide the same quality and capability as an iPhone at a notably lower price. That has not happened. And unless Apple stumbles badly with hardware and software it is not likely to happen any time soon.