2 ms·
The broader effect of aggressively controlling such third-party interactions is to lock-in users, and convert what one would normally think of as a “product” in
by ssivark 6y ago
The broader effect of aggressively controlling such third-party interactions is to lock-in users, and convert what one would normally think of as a “product” into something more like a “service” — which then gives the company much more power with pricing, market segmentation, etc. (including Apple care/warranties, value of returns or refurbished devices, upgrade cycle of devices, etc). Functionally, yet another way of exerting monopolistic effects.
This strategy applies beyond this particular example, and is probably one of the strong business motivations for Apple’s vertical integration.
Business-wise, this is yet another way to boost the “lifetime value” of a customer and ensure it is far more than the price of a single product, which I’m sure is a significant factor in the high valuations (and revenues) of Apple. The fact that they invest so much into marketing/advertising the Apple ecosystem as a lifestyle brand also means that they are pushed towards a business model where their customers need to have a large lifetime value to offset the customer acquisition/retention costs.