where is Apple going?
Companies compete on the basis of cost or value advantage over other products. Either they make a product at a lower cost than competitors (often at the expense of value), or they offer more value (which is measurable to an extent, but is more than just the difference in willingness to pay or WTP). A very few companies are able to compete on both – having a dual advantage over competitors.
For Apple, I truly wonder where they are in terms of strategy. As far as computers, margins are so ridiculously low that they can’t possibly be competing on cost. Every single bit of a computer is a commodity now – even the coolest part of any computer, whatever you may think it to be, is just a common item as far as accessibility and availability are concerned. Apple does have a value advantage, and they utilize this by getting away with charging more than competitors for similar products. Even so, the value difference is not enough to really make computers a meaningful source of revenue over time.
Speaking of revenue – the iPhone makes up 40% of Apple’s revenues. That’s almost unbelievable. And it is also a key component of Apple’s strategy over the past few years.
June 10, 2010 Musings, Rants, and Random Thoughts 0 Read more >