4 ms·

Yes, I'm not saying the person you quoted is correct with his failure predictions. But it sure seems that Apple is caught in the innovator's dilemma.

scarface74 8y ago
The person I quoted was the author of the “innovator’s Dilemma”. The symptoms of it is new entrants coming in from below with “good enough” products that are cheaper. Forcing the market leader to lower prices. Apple has been headed in the opposite direction for years. He also predicted that “modularity beats integration” as a market segment matures because you have more companies specializing in parts of the product and putting R&D behind it. But look at what’s happening in the phone market. Apple is consistently bringing out better processors than the rest of the industry. The operating systems are definitely not behind the competitors. By being tightly integrated for instance, they were able to tell developers to submit watch apps using bitcode (?) because they knew four years later they were going to introduce a 64 bit chip got the watch. Another advantage you are seeing in the market because of integration vs. modularity is that Apple can push OS updates for all of its devices that have been introduced since 2013 in one day. The “modular” Android ecosystem, not so much.
- ksec 8y ago
  The theory of innovator's dilemma ignores one of the fundamental issues in today's computing world. And that is software lock in. I think we are only just starting to see good enough products that are cheaper. Huawei, OnePlus, Xiaomi all have better software than Samsung, and arguably better design and hardware at similar price range as well. So it remains to be seen whether innovator’s Dilemma as a theory is wrong. All the three companies are only just setting foot in Europe and need a few more years to play out in other parts of the world. Another thing is that there has never been a company that sell premium products and got 20% of unit sales market share and even higher in usage shares. At least I am not aware of. Apple may very well be the only one in history. And the unit sales, combined with high margin has allowed them to constantly innovate. The original theory behind innovator’s Dilemma never expected the innovator has such high margin and high sales. And I think it is one reason why Wall Street has low valuing Apple Stock. They have never seen it, there are no case studies in all the text book.
  - scarface74 8y ago
    There is really no software lock in. Very little money is spent on the traditional idea of buying apps. Most people are either paying for services that are available for both iOS and Android (Netflix, Hulu, etc) or are paying for consumables for games. As far as purchased media, music has been sold DRM free on iTunes for almost a decade and you can transfer most of your purchased movies between iTunes, Google, Amazon, and Vudu using Movies Anywhere (completely legal). Most consumers in the US don’t pay for their phones. All of the carriers offer zero interest payment plans. The difference between a $300 phone on spread between 24 months and $1200 phone spread over 36 months (not a type. T-Mobile is offering 36 month financing on some high end phones) is a lot easier for people to stomache.
    - ksec 8y ago
      >There is really no software lock in Tell that to average consumers. There are people who are even reluctant to upgrade their iPhone because they don't want to do Data Transfer. Let alone transferring to another system, say WhatsApp from or to Android. By far most people don't want to relearn what ever it is on a new system.
      - scarface74 8y ago
        “Data transfer” for iOS is making sure your old phone is backed up and logging into your new phone with the same account. Don’t most apps like WhatsApp store your contacts on their server? I don’t use WhatsApp but all of the chat apps I use do.
        ksec 8y ago
        WhatsApp History, which no one wants to lose. iMessages History, which no one wants to lose. It is actually easier for WhatsApp history to move from Android to iPhone.

scarface74 8y ago

The person I quoted was the author of the “innovator’s Dilemma”. The symptoms of it is new entrants coming in from below with “good enough” products that are cheaper. Forcing the market leader to lower prices. Apple has been headed in the opposite direction for years. He also predicted that “modularity beats integration” as a market segment matures because you have more companies specializing in parts of the product and putting R&D behind it. But look at what’s happening in the phone market. Apple is consistently bringing out better processors than the rest of the industry. The operating systems are definitely not behind the competitors. By being tightly integrated for instance, they were able to tell developers to submit watch apps using bitcode (?) because they knew four years later they were going to introduce a 64 bit chip got the watch. Another advantage you are seeing in the market because of integration vs. modularity is that Apple can push OS updates for all of its devices that have been introduced since 2013 in one day. The “modular” Android ecosystem, not so much.

ksec 8y ago
The theory of innovator's dilemma ignores one of the fundamental issues in today's computing world. And that is software lock in. I think we are only just starting to see good enough products that are cheaper. Huawei, OnePlus, Xiaomi all have better software than Samsung, and arguably better design and hardware at similar price range as well. So it remains to be seen whether innovator’s Dilemma as a theory is wrong. All the three companies are only just setting foot in Europe and need a few more years to play out in other parts of the world. Another thing is that there has never been a company that sell premium products and got 20% of unit sales market share and even higher in usage shares. At least I am not aware of. Apple may very well be the only one in history. And the unit sales, combined with high margin has allowed them to constantly innovate. The original theory behind innovator’s Dilemma never expected the innovator has such high margin and high sales. And I think it is one reason why Wall Street has low valuing Apple Stock. They have never seen it, there are no case studies in all the text book.
- scarface74 8y ago
  There is really no software lock in. Very little money is spent on the traditional idea of buying apps. Most people are either paying for services that are available for both iOS and Android (Netflix, Hulu, etc) or are paying for consumables for games. As far as purchased media, music has been sold DRM free on iTunes for almost a decade and you can transfer most of your purchased movies between iTunes, Google, Amazon, and Vudu using Movies Anywhere (completely legal). Most consumers in the US don’t pay for their phones. All of the carriers offer zero interest payment plans. The difference between a $300 phone on spread between 24 months and $1200 phone spread over 36 months (not a type. T-Mobile is offering 36 month financing on some high end phones) is a lot easier for people to stomache.
  - ksec 8y ago
    >There is really no software lock in Tell that to average consumers. There are people who are even reluctant to upgrade their iPhone because they don't want to do Data Transfer. Let alone transferring to another system, say WhatsApp from or to Android. By far most people don't want to relearn what ever it is on a new system.
    - scarface74 8y ago
      “Data transfer” for iOS is making sure your old phone is backed up and logging into your new phone with the same account. Don’t most apps like WhatsApp store your contacts on their server? I don’t use WhatsApp but all of the chat apps I use do.
      - ksec 8y ago
        WhatsApp History, which no one wants to lose. iMessages History, which no one wants to lose. It is actually easier for WhatsApp history to move from Android to iPhone.