Apple2010 edited

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Apple2010 edited

  1. 1. Cross-Industry Digital Disruption:Lessons and Insights from Apple<br />Professor N. VenkatVenkatramanDavid J. McGrath Jr. Professor of ManagementBoston University School of ManagementIS829: January 2010<br />
  2. 2. 2<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Apple: Evolution of the Vision<br />
  3. 3. 3<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Apple’s role in the computer industry in 2002…<br />
  4. 4. 4<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Apple’s Launch of iPod in 2001<br />
  5. 5. 5<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Apple is in Steve Ballmer’s Top 25 IT Companies (2005)<br />
  6. 6. 6<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Apple’s Innovation Anchor<br />“the cost-savings [of outsourcing design] aren’t worth what you give up in terms of teamwork, communication, and the ability to get groups of people working together to bring a new idea to life…” ---Steve Jobs<br />Sept 2007<br />
  7. 7. 7<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Apple’s Core Capability: “Design” <br />
  8. 8. 8<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Apple’s Transformation Trajectories <br />
  9. 9. 9<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Apple’s Role in the Music Sector<br />
  10. 10. 10<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Music in the analog era….<br />CustomerNetwork<br />Albums and tapes borrowed withinfriends communities.<br />Channel<br />Sold in Physical outlets (general and specialty) & Mail-order Catalogs <br />Content(music)<br />Albums offered by record labelsin standard formats (33-45-78 rpm; & cassette tapes)<br />Hardware<br />Turntables, cassette players, tape decks, Sony Walkman etc.<br />
  11. 11. 11<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Music in the digital era…..<br />Precursor to today’s social network?<br />CustomerNetwork<br />P2P file sharing; personal CD burning and sharing with friends <br />Channel<br />Sold in stores (CDs); Rise of Onlinedownloads<br />Digital Rights Management<br />Apple Fairplay; Windows Play For Sure<br />Content(music)<br />Major lables plus rise of independent labels posting music online <br />Software<br />MP3; itunes; Windows Media; Quicktime; Realone etc.<br />Hardware<br />Digital audio players<br />
  12. 12. 12<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Apple’s Role in the Transformation of Music Network….<br />
  13. 13. Versions 1 to 4.0.1 – Supported only Macintosh (September 1, 2009 to October 2003)<br />Version 4.1 – Windows 2000 Support (October 16, 2003); 1 million downloads<br />Subsequent versions support latest versions of both Mac and Windows OS<br />13<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />iTunes History (Relevant for Interoperability in Networks)<br />
  14. 14. 14<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />This Day in History: April 3, 2008<br />January 1, 2009: 6 billion songs (70% of global digital sales); nearly 9 billion now.<br />
  15. 15. 15<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Design Evolution: iPod as a case example<br />Source<br />
  16. 16. 16<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Apple: Role of Patents<br />Patent #:7,479,949<br />Analyzing patents to examine new product trajectories <br />
  17. 17. 17<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />iTunes in the US Digital Music Sector<br />Date: August 20, 2009<br />
  18. 18. 18<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Apple’s success in music: Interplay between direct and indirect network effects<br />Indirect<br />iPodAdoption<br />ContentAvailability<br />Direct<br />ComplementorNetworks<br />CustomerNetworks<br />
  19. 19. 19<br />Music in the network era……<br />CustomerNetwork<br />P2P file sharing; personal CD burning; social and automated recommendations <br />Channel<br />Sold in stores (CDs); Online downloads;downloaded to phones; Networked streaming<br />MobileOperators<br />Mobile network for accessing music<br />Content(music)<br />CDS offered by major labels; rise of independent labels; <br />Digital Rights Management<br />Apple Fairplay; Windows Play For Sure:Open Mobile Alliance (OMA)<br />Software<br />MP3; Apple itunes; Windows Media; Quicktime; Realone etc.<br />Hardware<br />Multiple network-enabled devices<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />
  20. 20. 20<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Network of Linkages in Music<br />Customer Network<br />Mobile Operators<br />Channel<br />Content<br />Applications<br />Operating System<br />Hardware<br />
  21. 21. (c) N. Venkatraman [2010]; Boston University IS714 Course<br />From Music to Mobile Phones<br />Cross-NetworkDisruptor<br />iPhone<br />iTouch<br />AccessoriesNew Monetization Logics<br />~ 140,000 <br />21<br />
  22. 22. 22<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Apple iPhone App Store: Extension of iTunes Store<br />
  23. 23. 23<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Apple’s App Store as Complementary Network<br />
  24. 24. 24<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Apple’s success extends the interplay between direct and indirect network effects<br />Media<br />iPhone<br />DeviceAdoption<br />ContentAvailability<br />iPod<br />‘Apps’<br />ComplementorNetworks<br />CustomerNetworks<br />
  25. 25. 25<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Apple iPod and iTouch: Fastest Growth..<br />
  26. 26. 26<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Apple iPod + iTouch: The Fastest Ecosystem Ramp in History!<br />
  27. 27. 27<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />iPod + iPhone leverage the same complementor network <br />July 22, 2009<br />
  28. 28. 28<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />iPod + iPhone: Important anchors for Apple<br />June 22, 2009<br />
  29. 29. 29<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Microsoft versus Apple: 2005 to 2009<br />
  30. 30. 30<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />Apple: Market-share? Mind-Share? Profit Share?<br />Source:<br />
  31. 31. 31<br />(c) N. Venkatraman [2010]; Boston University IS714 Course<br />What insights do we get by using this framework to understand Apple?<br />BandwidthLaw<br />Metcalfe’sLaw<br />Technology<br />Domain<br />Moore’sLaw<br />Process<br />Product<br />Service<br />Business<br />Domain<br />2010<br />1980<br />

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