Differentiation is a key component to product marketing. For a few decades Apple has kept itself well differentiated from competitors by the software and ecosystem experience connected to premium hardware. How has that worked out?
Pay More, Get Same
Apple keeps the differentiation fires burning throughout the walled garden ecosystem with software, hardware, and services that are not easily matched by competitors. Unfortunately for Apple, that gap between differentiation and good enough competition is closing fast. Windows PC hardware from Dell, HP, and other PC makers has begun to eclipse Apple’s lock on the premium end of the PC space.
More features, similar hardware, less money is the competition’s mantra.
We see a similar change among smartphones. There was a time when iPhone customers would upgrade every year simply because new iPhones had remarkably better cameras than competitor smartphones. Today, all premium smartphone cameras produce photos that look like DSLRs. In other words, you pay a premium for an iPhone, but it takes pictures that look much like mid-range Android-based smartphones. They’re not, but average users cannot tell much difference between them.
Apple designs its own CPUs for iPhone and iPad and they are screamers, easily trouncing most of the best from Androidland, but does it matter? Samsung’s Galaxy-whatever line sports high-end processors, have more RAM and options for greater storage. For less money.
See? Good enough.
Competition that is good enough is my fear for Apple’s future. Already the company has fallen behind Samsung, Huawei, and others with premium hardware and cameras, yet the iPhone maker maintains a lead and distinct differentiation with software– both iOS and built-in applications. Does the average smartphone or tablet or PC user who needs to save money capable of differentiating what Apple does to maintain its lead and grow the ecosystem?
Already Apple’s iPhone, iPad, and Mac are at plateau levels. No growth. Yet, competitors nip at the company’s heels with its own level of differentiation– look at all those cameras on Samsung and Huawei smartphones.
Here’s the problem with the good enough strategy.
It does not pay. Apple continues to walk away with greater revenue in each product category, and greater profits than all competitors combined. That’s good for Apple, but can the company continue that lead as its lead in differentiation continues to degrade and whither away?
Apple’s competition might be good enough but it’s Apple that needs to be better.