An unfounded rumor surfaced recently in the British tabloid press that Bruce Willis was suing Apple because it wouldn’t let him leave his iTunes collection to his kids. The rumor is groundless. But it does highlight what I like to call Apple’s ecosystem mania.
Most tech experts agree Apple’s ecosystem is key to its success. Now that Apple (NASDAQ: AAPL) can no longer count on building market share by offering better and unique gadgets, it must do all it can to lock customers in to the Apple ecosystem. Its rush to push an inferior maps app onto customers underscores Apple’s increasing obsession with its ecosystem strategy.
Microsoft has reaped huge benefits from its Windows ecosystem for years. And Windows still enjoys stickiness in the PC world. Their recent effort to force Windows 8 onto skeptical consumers is simply a continuation of that eco-strategy.
Others argue that the real ecosystem battle is between Google and Amazon. Google probably has the most robust ecosystem with its search, gmail, calendar, maps, YouTube, etc. – all under the Google+ social layer. And Amazon is in the process of building what may be the most complete cloud ecosystem for business.
But many consumers don’t want to limit their digital lives to just one ecosystem. Consider the trend that forced corporations to support iPads and iPhones that employees bring to work. Samsung continues to build market share with innovative new products. Then there’s the cloud. And the cloud cries out for a universal platform rather than any collection of proprietary systems. Ultimately, consumers really want their digital world to work across various platforms.
Apple probably has the strongest and most addictive ecosystem of all. It is still further ahead in its ability to capture and keep users than any of its competitors. They know that the higher the number of devices owned within the Apple family, the higher the probability that the next purchased device will be an Apple. So, look for Apple to expand its offerings into TV, cloud-based software, office suites and social networking.
Apple has a decade of dominance with iTunes and iPod, almost two years of 70% market share for the iPad, and 25 straight quarters of beating the growth rate of the rest of the industry in PC sales. The company will have over $200 billion in annual revenue next year. While it’s impossible to keep growing at the same rate, Apple is a great consumer brand with great products.
It may be a bumpy ride over the next couple of months but, in spite of the recent dive in its stock price, Apple’s fundamentals and long-term outlook are still fantastic. There is compelling evidence that the breadth, strength and addictive nature of Apple’s ecosystem mania will continue to keep the company a step ahead of its competitors.
As for Bruce Willis and his iTunes collection, why on earth would his kids ever even want his iTunes collection in a world with Spotify and Pandora?