Apple Inc CEO Tim Cook |
There's one big reason people buy Apple products:
the ecosystem.
People don't buy iPhones by the tens of
millions just because they like the hardware, though that's a huge part of it,
but because they're tied into an ever-growing, sprawling ecosystem of software
and services that allow you to do more with the products if
you continue to invest in that ecosystem.
Here is the explanation.
When Apple introduced the iPhone in 2007,
iPod users who were already using iTunes saw something familiar and much more
consumer-friendly than BlackBerry, Windows Mobile and Palm devices offered at
the time. iTunes was the seed of an ecosystem that, in the past ten years, has
grown into a towering elm.
The App Store launched in 2008. After
that, when people bought apps and games they were also continuing to buy into
Apple. As they shelled out $0.99 here and $1.99 there for new software that
only ran on their Apple devices, they were digging deeper into Apple's offering
and further away from BlackBerry and a new operating system that was on the
horizon: Android.
Apple continued to build out this
ecosystem by changing the way its products interacted with one another. Apple
added the ability to use iMessage and FaceTime from an iPad, for example,
allowing you to carry on your iPhone conversations on a tablet. Then it
introduced a similar feature to Macs, also adding in support for full phone
calls. The more Apple devices you used, the better they worked together.
Siri launched on iPhone and iPad and
eventually on Mac and Apple TV and even the Apple Watch. It became a familiar
voice to answer your questions, no matter where you were.
Apple TV grew from what Apple CEO Tim
Cook once referred to as a "hobby" to a real home streaming device
with its own app store. And if you have an iPhone or iPad, all of your pictures
through Apple's Photos app are available across devices, even on the TV in your
living room.
Home, an app in iOS, lets you control
light bulbs, window shades, door locks and more, so long as they're build using
Apple's HomeKit set of developer tools. As consumers buy these products,
they're making a decision to stick with Apple.
Customers are more likely to know about
them, too, because Apple has a huge retail presence.
Walk into an Apple Store and trained
employees will show you exactly how to use any of the Apple products you own.
Or browse the shelves and purchase any number of products that'll work
seamlessly with your iPhone or iPad.
The Apple Store is also the company's
support hub, where you can go in with any questions, damaged products and more
for assistance. If you have AppleCare+, the company's premium warranty plan, it
often costs very little to repair your expensive Apple products, sometimes in
the same day.
Competitors aren't as good at ecosystems
Apple's competitors are trying to do
something similar. But they're going about it in a much more chaotic way that
will confuse most consumers, who don't spend their lives following the ins and
outs of the tech industry.
Google is making parallel moves to
integrate products like the Google Home, the Pixel smartphone, the Chromecast
smart TV and more, and that's a step in the right direction.
But Google relies mostly on partners to
build and maintain its ecosystem of products, and that can be incredibly
confusing.
How does the owner of an LG Android
smartphone know what smart home products it works with? If that same customer
buys an Android TV box built by NVIDIA and a smartwatch made by Huawei, who do
they go to for support? (Answer: NVIDIA and Huawei, not Google.)
Samsung is getting better at creating an
ecosystem like Apple's. It sells smartphones, tablets, TVs, wearables, and
laptops in the U.S., and it has apps such as SideSync that allow you to
interact with your smartphone from a Samsung tablet or laptop. It has services
like Samsung Pay, which is arguably better than Apple Pay because it's accepted
in more locations.
Samsung also owns SmartThings, a smart
home technology company that it acquired in 2014 for $200 million. SmartThings
is more open than Apple HomeKit, allowing it to support Android and iOS
smartphones and a large variety of smart home products ranging from power
outlets to door locks and cameras.
The difference between SmartThings and
Apple Home is that people have heard of Apple Home — you can hardly miss the
yellow icon staring at your from your new iPhone — and can manage it easily
through a single app on their smartphone. But SmartThings can be controlled by
any number of apps and gadgets, including Google Assistant and the Amazon Echo.
While it's versatile, it's also a lot more for a consumer to digest, and a lot
harder for a consumer to get started. There's no glaring yellow app begging you
to dive in on your new smartphone.
Samsung doesn't have an big app store.
Samsung doesn't have a place to buy music, movies and TV shows. And Samsung
doesn't provide as seamless an experience across all of its products (though
it's becoming better at it with apps like Samsung Connect, which provide a
one-stop destination for viewing and interacting with your Samsung gadgets.)
Nor do Samsung or Google have hundreds of
high-profile stores around the world. Instead, they rely on small flagship
viewing-only locations, pop-up events or dedicated corners in Best Buy, as
places to better understand the products.
This doesn't help. As product ecosystems
become more powerful, consumers need a single easy place to go to learn more
about how they can be used.
Consumers also need a place to go for
support. If you break your Samsung smartphone, you're going to be on the phone
with your smartphone insurance provider -- if you bought insurance at all. If
you have an iPhone, just walk into an Apple Store. Apple may charge you a
premium depending on your warranty status, but you'll have some sort of
solution from the company you bought your phone from. That's a big deal.
Competitors may be able to build a better
smartphone, or better laptop, or better augmented reality device than Apple.
But Apple has a years-long head start in building an ecosystem of products that
leverage each other's strengths. That's why its services
business now is almost the size of a Fortune 100 company alone. That will take
a long time for any competitor to equal.
And that's why people will keep buying
Apple products.
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