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04 b why ipod is successful
 

04 b why ipod is successful

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    04 b why ipod is successful 04 b why ipod is successful Presentation Transcript

    • Why iPod/iPhone Is Successful?
      Wesley Shu
      1
    • Is iPhone a Cellular Phone?
      2
    • Is iPhone a Product?
      3
    • What is an iPod/iPhone?
      Not only a product, but service & Lifestyle!
      4
    • What is an iPod/iPhone?
      What’s more, it is a Platform.
      5
    • What is an iPod?
      6
    • What is an iPod?
      7
    • Managerial Features of iPhone
      Design driven innovation
      Business model innovation
      Platform as a service
      Peer to peer sharing/production
      Web2
      8
    • Reason 1: the Product
      9
    • Reason 1: the Product
      10
    • Reason 2: iTune
      Music Industry
      New Wave of Music Distribution
      Music Timeline
      11
    • Reason 2: iTune
      Before iTune: 113K iPod per quarter
      After iTune: 733K
      Razor-and-blades business model – that’s it?
      12
    • Labels
      Intermediaries add costs
      Binding artists to long-term contracts
      85 to 90% profit from music sales
      In the music industry, a record label is a brand and a trademark associated with the marketing of music recordings and music videos.
      13
    • Traditional Music Industry
      Creation -> Marketing -> Distribution
      Creation: musician, lyrists, singers …
      Marketing: Producers (labels), e.g. Sony Music, BMG, EMI, Universal, & Warner
      Distribution:
      Level 1: distributors, clubs
      Level 2: retailers
      CONTROLLED BY LABELS!
      14
    • New Wave of Music Distribution
      Internet: online stores & Streaming audio
      Napster
      Peer to peer software
      Music industry’s responses only backfired
      Now Spotify - Spotify Video
      A peer-to-peer, commonly abbreviated to P2P, is any distributed network architecture composed of participants that make a portion of their resources (such as processing power, disk storage or network bandwidth) directly available to other network participants, without the need for central coordination instances (such as servers or stable hosts).
      15
    • Apple iTune Solution
      30-second preview
      Pay per song, $0.99
      No subscription
      Low profit $0.17 per song
      Digital Rights Management (DRM)
      Guarded both labels’ IP and the proprietary technology inside the iPod – Win/Win situation
      While iTune’s profit margin is low, iPod is high – 100%
      16
    • Apple’s Success
      iTune: 80% market share compared to 3% of Napster in 2001
      iPod: 75%
      39% of Apple total revenue
      17
    • Nike+
      18
    • Nike +
      Video
      It’s Web 2.0 too.
      What's happening now in Nike+
      Challenge
      Distance Coaching
      19
    • Design-Driven Innovation
      20
    • Reason 3: Platform
      You R Here
      Wikitude World Browser
      Numerous applications – developers download its SDK
      iPhone Development Center
      21
    • Platforms always wins over applications
      Office with Word, PowerPoint, and Excel over WordStar, Harvard Graphics, and Lotus 123
      MS DOS
      BASIC
      Google over Netscape
      Browsers became commodity, and thus we needed a new platform to reign the web.
      22
    • Platforms always wins over applications
      Facebook is also a platform
      Microsoft released its SDK for Facebook’s API – Open Stream
      23