Apple stated that its product design needs have diverged. Apple creates tightly integrated products (iPhone, iPad) so one could think that that might be a reason. For instance, the new Retina MacBook Pro has its batteries glued into its case. Naturally, that makes replacing as well as recycling more complicated if not impossible. So in that light, does Apple’s move make sense? I don’t think so.
Tight integration is a phase in the product cycle, suitable when separate components put together would not achieve a satisfactory whole. Certainly this approach made sense for some new products, but considering the market now of phones, tablets and laptops, the ones from Apple are not that far removed in specifications or engineering. Basically, others have caught up and at that point the tight integration works out more expensive.
For Apple, tight integration has always been a bit of a habit. Products have often been not particularly extensible. You’d buy a model and stick with it as-is, until you were ready for a new one. A similar story applies to its external interfaces. Some decisions made brilliant sense such as dropping disk drives (original iMac), a move which later enabled the magnetic lid and magnetic power plug. But apple also had digital DVI plugs while most monitors still used VGA, then for some laptops it went to MiniDVI, and most recently it’s shifted to a new media port. This is a nuisance for owners of such equipment even when they upgrade, as now they’ve also had to buy new adaptor cables which are not exactly cheap. Many owners do put up with it, even though the set of equipment turns out quite a bit more expensive while the specifications are in fact very similar to other brands.
The latter is no surprise of course, we’ve analysed before what people actually buy, and it’s generally not “a computer”. They can purchase convenience, efficiency, even lifestyle and status. If you fit within the toolset (of equipment and apps) that the Apple environment provides, it’s indeed convenient and efficient. It’s a niche, but actually a fairly large one.
So we are left with two questions… does tight integration preclude making components easily replaceable and recyclable? No. It’s a design choice. If you set specific targets, the design will work within those targets. A battery can be fixed by sliding into a casing, or use a sticky gel or other adhesive that’s easily removed (think along the lines of the 3M wall fixtures with their double-sided sticky tape). That’s just one example. When you set a bunch of requirements, you can find suitable ways to resolve the need. Swatch did this years ago by setting a strict limit on the manufacturing cost of its watches. The designers worked out ways to use fewer cogs, and the ones they did put in were made of plastic rather than metal. The objectives were achieved.
Does the target niche market care about the environmental credentials of the products? I reckon they do and increasingly so. Typically reasonably affluent, the demographics of Apple users has a large overlap with the group that care for environmental matters. The procurement processes of many government organisations are also reliant on EPEAT compliance, so there too Apple will lose out.
My rough guess is that Apple is repeating a past behavioural pattern, for dogmatic reasons. Previously the decision would have been made by Steve Jobs with no care for any factors other than the merits at the time. Therefore, merely repeating his past decisions would be unwise: they made sense in the context, which will be different now. Corporations are particularly good at repeating behaviour that was successful in the past, but that doesn’t mean that it’s always the best move now or even good for them (or its customers). And in this case, I reckon it’s going to bite.
People don’t actually buy a product. And the marketing notion of “solutions” is not really something customers buy in to, either – it’s closer to the truth, but an over-simplification that can distract you from what it’s actually about.
When you purchase a cup of coffee, you’re buying a caffeine shot, or a bit of pastime, or an enjoyable moment chatting with friends – or a combination thereof.
When you purchase a car, you buy the ability to get from A to B with some additional requirements/benefits, it may serve as a status symbol, and so on.
It’s about purpose, the difference between the means and the goal. When product developers and companies forget this, both their product and their communications go weird. And when community advocates don’t keep this in mind, they won’t understand client behaviour.
Take someone on their way to work who is going to get stuck in morning traffic. They might buy a cup of coffee, but a hot drink can be dangerous in a car. They could get a croissant or other pastry, but that can get grease and crumbs over the business attire. So they might instead go for a milkshake – it’ll have a cover and a straw, and takes a fair while to drink. It satisfies the objective: pastime. That’s what that person is actually buying.
I think it’s a neat example because it shows that for this market, coffee, pastries and milkshakes are actually direct competitors and the specific “features” for selecting one or the other are not at all what you might otherwise expect. For instance, it’s not primarily about the quality of the coffee: this buyer group has dismissed the coffee option well before even getting to that consideration, so making improving the coffee quality is not going to make them change their mind. Good to know!
I’m writing about this today because I’m seeing so many articles and blog posts about Apple after the passing of its co-founder Steve Jobs. There are lots of technological (hardware and software engineering) and business ideological (licensing) aspects so Apple is very interesting to review in this way, and much can be learnt from it.
But it’s really very important to realise that when someone purchases an iPhone, they’re buying productivity, status, ease-of-use-through-familiarity, easy integration with other hardware, and so on. Similar analysis can be done for the iPad and Mac laptops/desktops.
It’s definitely possible to point to other hardware and prove that it’s better, and to another software environment and prove that it provides more freedom. But if “better hardware” and “software freedom” are not high on the consumer’s list of requirements, even winning that argument wouldn’t make a difference to their behaviour.
If you were intent on having them care for either or both of those things, then you need focus on that prerequisite first. In a nutshell, “better” or even “fit for purpose” is relative to the objective, and it’s not at all about speed and features and quality. For some those things can be a factor, but you need to figure that out and chances are it ranks lower than other issues. Someone’s reason for choosing Windows or OSX “over Linux” is not the same as your reason for choosing Linux over Windows and OSX.
Years ago I purchased a MacBook. I’ve written about this before, what I was actually buying then was the ability to suspend/resume reliably, and have working wifi on my laptop. It was something Linux didn’t offer me at the time – that’s sorted now and I now actually run Linux on my old MacBook hardware. My next laptop won’t be an Apple, or at least not for the purpose of running OSX. I like free (as in open) software, but I also have work to do. So every time it comes up, I have to make a pragmatic choice.
At many tech conferences, including those in the Open Source space, you will see a huge number of MacBooks. If you want to know why those people bought them, ask. You’ll find it most educational. Just make sure it’s not perceived as an attack of their choice or ethics or whatever, because chances are you’re not the first to ask and there have been others with an agenda.
If you want to potentially convince people to buy different stuff, you really need to first understand why they’re currently purchasing the things they are. Don’t presume. Then either find or create a product that matches their specified needs better, or come up with a need that will rank higher but hasn’t previously been applied.
Yes, that’s what Apple has done under Steve Jobs’ leadership. And whatever you may think of the hardware, software, marketplace and licensing, I regard it as a great accomplishment in product development and marketing. I appreciate that that doesn’t rank highly from a tech perspective, but I do believe it’s not only worthy of respect but definitely worthwhile understanding.
If you are active in this field either developing products or in the community, and don’t yet understand that Apple didn’t just create another computer, walkman and phone, do learn about this as it’s essential to what you’re trying to do. It’s not about then copying that, but about understanding how it works.
The current market of tablet computers provides an ideal demonstration of how not to compete. That is, unless you have lots of money to spend on marketing and such – but nevertheless, it’s going to hurt your bottom line.
Fundamentally, the other vendors vendors are chasing Apple. First iPad, now iPad2. Is that a winner? I think not. Research has shown clearly that when coming up against a successful incumbent, simply offering a similar product at a lower price is not going to displace the incumbent. It’s just a costly bloody battle (or as aptly named in Blue Ocean Strategy [W. Chan Kim and Renee Mauborgne, Harvard Business School press], a Red Ocean).
And of course in case of Apple, providing a better product is a tricky proposition – Apple is very good at what it does – mind you this is talking about relevant user experience, not strictly technical merit (see also Working Back From Client Experience to Technology).
In a nutshell, providing a better product at a lower price does not really differentiate. You’re still operating in the same market as the incumbent, and they have the home ground advantage. So what you want to do is not directly compete with the incumbent, yet take advantage of the existing market exposure.
What does this mean? Clearly, tablet computing is a hot topic! You can make use of that, but not actually aim for typical iPad clients as they are well served by Apple through its funky stores, advertising and user advocacy. Leave them be. You need to differentiate, preferably in a disruptive way, and thus end up in a different market.
Analyse what makes iPad: brand, slick hardware, easy use, applications, price. Those are its defining features, and if you were to rank them visually, it’s all high up on the scale. High brand awareness, lots of applications, and high price. Ok, so that’s clear: we now have a better idea (and visual image) of where Apple positions its iPad. I’ve made up the value curve of a viable potential disruptor, which typically looks very different from the incumbent(s) and generally achieves its goal by vastly reducing or even completely removing some aspects. For good measure I also put in two other tablets (HP Touchpad and Samsung Galaxy Tab). Let’s look at the visual (I created the graph using OpenOffice with a mere few clicks):
Let’s first review the other competitors, before moving on to the disruptor:
First of all, the HP Touchpad is now dead since HP dropped WebOS (but you can run Android or regular Linux on it, no jailbreak required).
HP Touchpad has very good hardware (comes at a price), WebOS has decent usability and while the WebOS’ appstore is significant, it’s not as big as Apple’s.
Samsung Galaxy Tab has a similar profile, uses Android (which is not as slick as iOS – depending on whom you ask) which has plenty of apps available.
How did I make up the disruptor? I just followed some logical steps and the rest follows from there:
obviously your brand is not known.
your hardware won’t be super fancy (probably a Chinese OEM);
consequently the ease of use won’t be quite as high (Android is cheap and available);
since you don’t have a huge app store (don’t even go there, other bigger ones have failed) you essentially have only the apps you stick on it yourself; if you do use Android, you have apps available (which is why I didn’t rate it as 0). However, with lower hardware specs fewer will be useful/practical/relevant.
your pricing is now simply a consequence of the other aspects. You can also work it the other way round and aim to produce a product for say half price, and in this case I’d guess the picture would end up looking fairly similar anyway. It appears that in this product, any aspect you tweak directly affects one of more others.
Naturally we can debate details, but you’ll probably broadly agree with my quick assessment and the fact that some minor tweaks in the numbers won’t make the picture look significantly different. If products have a similar curve, they tend to be in the same space and thus compete for the same customers. Samsung clearly positioned itself just slightly below Apple’s pricing for essentially a very similar product. HP did the same, and then gave up (possibly a wise move, for this particular product – good though it is: I have one, which bought in the runout sale but only because it was so cheap). But both the Samsung and HP curve still look very similar to Apple. The disruptor’s curve is distinct. If a big brand were to produce my disruptive product, its curve would still look very different to iPad with most aspects well below – below is not bad, it means it’s different!
The Disruptive Tablet is not going to get bought by the typical iPad user. But so what? We know lots of people are ogling the technology, and iPads are really expensive. So what other group of people would you aim for? Well that’s a very tricky question and my honest answer is that you won’t know beforehand, no amount of market research is going to help (so save that money). Markets tend to find products, not the other way round. And since we’re not aiming for iPad customers directly, we’re essentially aiming for non-consumers e.g. people who would currently not otherwise consider buying a tablet at this stage.
If you are familiar with a potential market (say industrial logistics, or early childhood education) you could develop (or acquire) a few specific apps and aim for that market. Some suitable Android apps might already be available for your prospective market, and thus we’ve created something magical: an enabler. Enabling technology makes a type of product available to a new realm of users. Think of how 3.5″ hard disks enabled sanely portable computers (Toshiba was first there), and how compact flash memory cards enabled digital photograph (Canon IXUS/PowerShot, and many others). A cheap tablet does not need to have lots of apps, it merely needs the right apps needed by the specific market – chances are these won’t be general consumers because they’d look for more choice.
Your tablet would probably not make a mobile connection but only have wifi. Forget about Bluetooth. If you use inductive charging (the HP Touchpad actually does that but only with a separate display dock) you don’t even need a usb plug – now that may appear trivial, but a sturdy mechanical connector is expensive and when used in either industrial or kiddie environments, it’s a hindrance. So get rid of it altogether. For industrial use speakers won’t be necessary, but a camera on the back could be useful for barcode scanning and other applications. For kiddie user, both camera and speakers are probably required but again that depends.
Making technology appear simple is hard! As you see, stripping features others now regard as essential assets can actually be a good thing – whereas most people think in terms of adding things, actually focusing the other way: removing things, this suddenly makes the product viable for new markets, and at a lower cost. Apart from now scoring high in the simplicity aspect (something the others would have to put a lot of work in to with their user interface), the simplicity also enables the ruggedness asset: you have fewer connectors and buttons (for a good ruggedness-test of a tablet, I’d toss some sugary liquid over it, and drop it on the floor – this mimics both industrial and kiddie environments!). How about no physical buttons? Example: The HTC Incredible S phone doesn’t have buttons on the front, it merely uses the bottom end of its touch screen for 4 buttons. It makes the phone simpler and reduces the number of mechanical bits that can break. Good!
Fewer bits to power means batterylife is extended. Also good! Portability is affected by screen size and overall weight (screen+battery). While Apple and Samsung will bring out bigger screens, that’s a seriously downside for portability and ruggedness… so they’re drifting further away from your market: nice! (again, this is typical)
Considering the high price of the iPad, even half-price may not be sufficiently cheap to reach some markets. A $100 tablet would have special potential. Obviously some people in the new market will have bought an iPad in the past – it might do the job but it’s overspecced and (for the job) overpriced. Don’t worry about that, it’s actually a typical feature of a disruptive market. When looking at replacing or extending, your offer will make much more sense. Essentially you will have the market to yourself (Blue Ocean), while also taking some of the low-end clients away from iPad and similar offerings. That’s makes it extra fun!
The product will have a limited lifetime, as prices overall come down. So be it. Enjoy it while you can and be smart about it. Work on other things. Generally, disruptors tend to “float upward” by chasing “higher value clients” (sales people on commission tend to cause that) and adding features. You may indeed want to add some features as your clients become more sophisticated in their own needs and the tech becomes even cheaper. But resist the temptation to equal the others’ features! Remember that “Upward” is where the nasty Red Ocean lies, it’s not a winner at all. Stay where you are and do it well. Go sideways – find other similar markets that are still untapped. Use the acquired expertise to do something completely different again, and start a new separate business for that.