I get a little bothered when people expect pundits like CC to be right 100% of the time. If they get nit-picked too much, then people stop making predictions. And CC may indeed be correct on the iPod - it had a great run, but sales are falling through the floor. Similarly, Apple is looking great in the iPhone, but it is still under attack on the low end.
He was absolutely right about the iPod, except that the company that disrupted Apple was Apple. Jobs ostensibly was "deeply influenced" by "The Innovator's Dilemma," so it's not inconceivable that he learned from it and cultivated disruptive projects within Apple.
I see my kid's teen friends running around with android phones.
Also, there's something to be said for competitors catching up in terms of design. Several are catching up and forcing apple to complete on their terms - see phablets starting with samsung galaxy note.
I doubt very much that businesses are as rational as he makes them out to be. Many businesses buy extremely expensive software for completely irrational reasons or pay business consultants for obviously meaningless fluff.
The difference between consumers and businesses is that businesses that act too irrationally for too long are more likely to fail and get replaced by more rational businesses. I suspect that the statistics on rational businesses often suffer from survivor bias.
Ben Thompson is mostly wrong: Customers don't 'buy' iPhones, Carriers do i.e. iPhones are protected from low end disruption by carriers subsidizing and obscuring the price with plans/contracts. In markets where carrier subsidy isn't as popular (e.g. Europe) iPhone market share is very low. Likewise, iPad market share is dropping quickly becausr there are few subsidies for that product.
NB Apple was always careful to sell low end iPods like the nano and shuffle so they continuously disrupted themselves in that product market and kept other companies from doing so.
I've got an android phone that costs the same (within 10%) of an iphone of the same screen size. You can usually get a step up in storage space in the same price bracket as an iphone, but they are on par with each other from what I've seen.
I disagree. I think people shop for a phone the way many people (unfortunately) shop for a new car: On the monthly payment, not the sticker price. All that matters is that the carriers finance the phone, subsidies are dying. Every major US carrier now has installment options.
> Likewise, iPad market share is dropping quickly becausr there are few subsidies for that product.
You don't think it's because they essentially invented the market, starting out at 90% market share?
This model is changing due to disruption from T-Mobile. With AT&T you either buy a phone up front or pay for it in full over 18-24 months.
Not sure why, but they do still have a subsidized 2-year plan, but the monthly rate is higher and you end up paying more than the cost of the phone over 2 years.
I guess this is a 2013 article, but I'm surprised that what hasn't been mentioned in the comments yet are the platform/network effects of iOS apps and the App store.
I think it's interesting to identify a consumer focus on status/UX/psychological benefits, but I actually think it's wrong to say that the consumer isn't paying for more functionality because I think the iOS app ecosystem actually provides pretty compelling additional functionality in addition to the incremental, but still relatively meaty, upgrades between phone models and nominally nicer UX.
I mean, the App Store is still much better curated than its open Android counterpart. The iOS development seems to have more robust developer tools, offer better return, have a more or less standard device structure for testing, etc etc.
(http://thinkapps.com/blog/development/platform-build-first-i...)
The iOS ecosystem isn't just the handsets. It's the App store, the developer tools, etc. This allows developers to better create functionality on top of all these Apple devices and enables Apple to surface those quality apps/functionality better and faster. That's a significant benefit.
which comes first, a good consumer product or a healthy ecosystem around it? it's a positive feedback loop thing in later stage but product always comes first. it's not a big secret but only few nailed it occasionally in a decade.
I don't relate to this at all, but accept that I'm an outlier in the marketplace. I have a cheap android phone on a cheap month-to-month plan. Other than the apps it came with, I have installed very little from Google Play. I use the phone for texting, phone calls, mobile email, maps, occasionally mobile browsing, and that's about it. I don't play games with it, I don't listen to music with it, I don't take pictures with it. Even this cheap phone does way more than I need. I would never consider an iPhone.
That's a very interesting theory, but it's supported by very few examples, and the examples are pretty weak.
In the example of clothing and fashion - the consumer really buys buys psychological value(status, attention, etc), not user experience with his extra money, and i'm not sure those goods can be "good enough", because some have arms-race logic build internally(for example status).
In a sense, the same applies for the BMW - you could probably get as great car as the BMW , for much less , but the BMW holds important psychological advantages.
And as for consoles - i'm not sure we've reached "good enough" level of graphics for true gamers. When we'll reach that - it would be interesting too look at that market.
So yes, consumers aren't rational and for some thing you can never satisfy them, but i'm not certain user experience is one of those things.
> the consumer really buys buys psychological value(status, attention, etc), not user experience
please explain the difference, other than what seems to be your pejorative value placed on psychology. Why would it be bad to want to feel good when using a piece of tech and prefer it over another piece of tech that is better on other metrics? Psychology (broadly stated) is the user experience.
> the consumer really buys buys psychological value
I think that's what the author is saying - businesses don't buy printers thinking about how the printer will make their staff feel, whereas when people buy iPhones, how they feel is a big part of the decision. The idea that I can afford to buy an excellent user experience for myself is very much part of that status value. Apple has exploited those feelings so that its design value outweighs the economies of scale that can be achieved by modularisation.
The author missed that we are actually seeing significant movement towards modularization in video games -- PC gaming is/has been growing at the expense of consoles the last few years.
iPhone and iPod are very interesting and unique case studies in that they combine high-end differentiation (the devices, or at least the brilliant marketing-fueled perception of the devices) with low-end disruption, and with network-effect ecosystems (music, apps).
The low-end disruption is cheaper music (iPod) and cheaper computer (iPhone). Computer in that many consumers initially saw iPhone as a way to do email, web and apps without paying for separate computer and Internet.
The OP, however, is quite good. In a nutshell, it argues that (1) disruption theory assumes rational actors and (2) consumers are much less rational than businesses.
Were Steve Jobs, John Ive, Tim Cook and other Apple guys crystal clear about the theory when they started iPod/iPhone? I don't think so. Apple has a unique weapon called design and is willing to pay whatever it costs to enhance it. Its business is to use the weapon wherever there is a chance: mp3 player, tivo, mobile phone, watch and more to come. The rest is upon professors in business schools to figure out.
I think their secret weapon is design expertise, not design itself. I have a 2014 moto X, and I like it. I switched from IOS due to bugs I was experiencing with IOS 8, and I liked the idea of a more open environment.
I can say with a high degree of confidence (but not 100%) that I'll switch back to iphone next year.
The reason centers on two things: Google's baffling lack of design sense (google's own apps look bad), and google's inability to filter out sham reviews on their app store.
The google app store and the apps are just awful. There are some diamonds in the rough, but they are few and far between and hard to find because nearly all the apps (good or bad) have 4+ stars.
There are tons of crap apps on the apple store too, but the good ones are easier to find because the ratings still have meaning on the apple store.
There is something seriously wrong with google's store. The AT&T app, which is a marginal semi web app, has 25,000 5 star reviews on google's store. It averages somewhere above 4, I can't remember the exact number. I'm sorry, there is just no way 25,000 honest people gave that app 5/5 stars. It's ridiculous to even consider.
It's barely a 3 star app on apple's store and that sounds about right. I'd give it 3 just because it is functional.
I think the real problem behind it is the concept of freemium apps. Apple has it too, but I think because of scale android/google are head of the game in terms of the damage caused by fremium apps.
I think the best way for either company to fix it would be to not allow in-app purchases on free apps. The reason I think it would fix it is that both app stores require you to have the app to vote on it, but with free apps it's no big deal to download-vote-delete an app. This opens you up to mechanical-turk type exploitation.
If it costs a buck to download, you've raised the cost of buying a vote, you've raised expectations of buyers. It has a side benefit of destroying the freemium market which in my opinion can only be a good thing.
My gut tells me that google could filter out sham reviews if they wanted to. I'm sure they can detect the download-vote-delete pattern easily, and if 25000 come in over the course of week or something, well, it just seems like it'd be obvious if the spent time mining the data.
[+] [-] mathattack|11 years ago|reply
[+] [-] pilsetnieks|11 years ago|reply
[+] [-] andyidsinga|11 years ago|reply
[+] [-] fauigerzigerk|11 years ago|reply
The difference between consumers and businesses is that businesses that act too irrationally for too long are more likely to fail and get replaced by more rational businesses. I suspect that the statistics on rational businesses often suffer from survivor bias.
[+] [-] unknown|11 years ago|reply
[deleted]
[+] [-] lemmingsleft|11 years ago|reply
NB Apple was always careful to sell low end iPods like the nano and shuffle so they continuously disrupted themselves in that product market and kept other companies from doing so.
[+] [-] DigitalJack|11 years ago|reply
[+] [-] encoderer|11 years ago|reply
> Likewise, iPad market share is dropping quickly becausr there are few subsidies for that product.
You don't think it's because they essentially invented the market, starting out at 90% market share?
[+] [-] jobu|11 years ago|reply
Not sure why, but they do still have a subsidized 2-year plan, but the monthly rate is higher and you end up paying more than the cost of the phone over 2 years.
[+] [-] screature2|11 years ago|reply
I think it's interesting to identify a consumer focus on status/UX/psychological benefits, but I actually think it's wrong to say that the consumer isn't paying for more functionality because I think the iOS app ecosystem actually provides pretty compelling additional functionality in addition to the incremental, but still relatively meaty, upgrades between phone models and nominally nicer UX.
I mean, the App Store is still much better curated than its open Android counterpart. The iOS development seems to have more robust developer tools, offer better return, have a more or less standard device structure for testing, etc etc. (http://thinkapps.com/blog/development/platform-build-first-i...)
The iOS ecosystem isn't just the handsets. It's the App store, the developer tools, etc. This allows developers to better create functionality on top of all these Apple devices and enables Apple to surface those quality apps/functionality better and faster. That's a significant benefit.
[+] [-] crazychrome|11 years ago|reply
[+] [-] ams6110|11 years ago|reply
[+] [-] minthd|11 years ago|reply
In the example of clothing and fashion - the consumer really buys buys psychological value(status, attention, etc), not user experience with his extra money, and i'm not sure those goods can be "good enough", because some have arms-race logic build internally(for example status).
In a sense, the same applies for the BMW - you could probably get as great car as the BMW , for much less , but the BMW holds important psychological advantages.
And as for consoles - i'm not sure we've reached "good enough" level of graphics for true gamers. When we'll reach that - it would be interesting too look at that market.
So yes, consumers aren't rational and for some thing you can never satisfy them, but i'm not certain user experience is one of those things.
[+] [-] mark212|11 years ago|reply
please explain the difference, other than what seems to be your pejorative value placed on psychology. Why would it be bad to want to feel good when using a piece of tech and prefer it over another piece of tech that is better on other metrics? Psychology (broadly stated) is the user experience.
[+] [-] auganov|11 years ago|reply
[+] [-] blowski|11 years ago|reply
I think that's what the author is saying - businesses don't buy printers thinking about how the printer will make their staff feel, whereas when people buy iPhones, how they feel is a big part of the decision. The idea that I can afford to buy an excellent user experience for myself is very much part of that status value. Apple has exploited those feelings so that its design value outweighs the economies of scale that can be achieved by modularisation.
[+] [-] fasteddie|11 years ago|reply
[+] [-] snom320|11 years ago|reply
[+] [-] erikj|11 years ago|reply
[+] [-] gz5|11 years ago|reply
The low-end disruption is cheaper music (iPod) and cheaper computer (iPhone). Computer in that many consumers initially saw iPhone as a way to do email, web and apps without paying for separate computer and Internet.
[+] [-] sschwartz|11 years ago|reply
[+] [-] _pius|11 years ago|reply
The OP, however, is quite good. In a nutshell, it argues that (1) disruption theory assumes rational actors and (2) consumers are much less rational than businesses.
[+] [-] crazychrome|11 years ago|reply
[+] [-] DigitalJack|11 years ago|reply
I can say with a high degree of confidence (but not 100%) that I'll switch back to iphone next year.
The reason centers on two things: Google's baffling lack of design sense (google's own apps look bad), and google's inability to filter out sham reviews on their app store.
The google app store and the apps are just awful. There are some diamonds in the rough, but they are few and far between and hard to find because nearly all the apps (good or bad) have 4+ stars.
There are tons of crap apps on the apple store too, but the good ones are easier to find because the ratings still have meaning on the apple store.
There is something seriously wrong with google's store. The AT&T app, which is a marginal semi web app, has 25,000 5 star reviews on google's store. It averages somewhere above 4, I can't remember the exact number. I'm sorry, there is just no way 25,000 honest people gave that app 5/5 stars. It's ridiculous to even consider.
It's barely a 3 star app on apple's store and that sounds about right. I'd give it 3 just because it is functional.
I think the real problem behind it is the concept of freemium apps. Apple has it too, but I think because of scale android/google are head of the game in terms of the damage caused by fremium apps.
I think the best way for either company to fix it would be to not allow in-app purchases on free apps. The reason I think it would fix it is that both app stores require you to have the app to vote on it, but with free apps it's no big deal to download-vote-delete an app. This opens you up to mechanical-turk type exploitation.
If it costs a buck to download, you've raised the cost of buying a vote, you've raised expectations of buyers. It has a side benefit of destroying the freemium market which in my opinion can only be a good thing.
My gut tells me that google could filter out sham reviews if they wanted to. I'm sure they can detect the download-vote-delete pattern easily, and if 25000 come in over the course of week or something, well, it just seems like it'd be obvious if the spent time mining the data.