The document discusses Apple's evolution and role in disrupting various industries like music and mobile phones. It describes how Apple launched the iPod in 2001 which transformed the digital music industry and established iTunes. Apple later launched the iPhone which combined an iPod, mobile phone and internet communication device, and also launched the App Store allowing third-party applications. This helped Apple leverage network effects across multiple industries.

1. Cross-Industry Digital Disruption:Lessons and Insights from Apple Professor N. VenkatVenkatramanDavid J. McGrath Jr. Professor of ManagementBoston University School of ManagementIS829: January 2010

2. 2 (c) N. Venkatraman [2010]; Boston University IS714 Course Apple: Evolution of the Vision

3. 3 (c) N. Venkatraman [2010]; Boston University IS714 Course Apple’s role in the computer industry in 2002…

4. 4 (c) N. Venkatraman [2010]; Boston University IS714 Course Apple’s Launch of iPod in 2001

5. 5 (c) N. Venkatraman [2010]; Boston University IS714 Course Apple is in Steve Ballmer’s Top 25 IT Companies (2005)

6. 6 (c) N. Venkatraman [2010]; Boston University IS714 Course Apple’s Innovation Anchor “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 Sept 2007

7. 7 (c) N. Venkatraman [2010]; Boston University IS714 Course Apple’s Core Capability: “Design”

8. 8 (c) N. Venkatraman [2010]; Boston University IS714 Course Apple’s Transformation Trajectories

9. 9 (c) N. Venkatraman [2010]; Boston University IS714 Course Apple’s Role in the Music Sector

10. 10 (c) N. Venkatraman [2010]; Boston University IS714 Course Music in the analog era…. CustomerNetwork Albums and tapes borrowed withinfriends communities. Channel Sold in Physical outlets (general and specialty) & Mail-order Catalogs Content(music) Albums offered by record labelsin standard formats (33-45-78 rpm; & cassette tapes) Hardware Turntables, cassette players, tape decks, Sony Walkman etc.

11. 11 (c) N. Venkatraman [2010]; Boston University IS714 Course Music in the digital era….. Precursor to today’s social network? CustomerNetwork P2P file sharing; personal CD burning and sharing with friends Channel Sold in stores (CDs); Rise of Onlinedownloads Digital Rights Management Apple Fairplay; Windows Play For Sure Content(music) Major lables plus rise of independent labels posting music online Software MP3; itunes; Windows Media; Quicktime; Realone etc. Hardware Digital audio players

12. 12 (c) N. Venkatraman [2010]; Boston University IS714 Course Apple’s Role in the Transformation of Music Network….

13. Versions 1 to 4.0.1 – Supported only Macintosh (September 1, 2009 to October 2003) Version 4.1 – Windows 2000 Support (October 16, 2003); 1 million downloads Subsequent versions support latest versions of both Mac and Windows OS 13 (c) N. Venkatraman [2010]; Boston University IS714 Course iTunes History (Relevant for Interoperability in Networks)

14. 14 (c) N. Venkatraman [2010]; Boston University IS714 Course This Day in History: April 3, 2008 January 1, 2009: 6 billion songs (70% of global digital sales); nearly 9 billion now.

15. 15 (c) N. Venkatraman [2010]; Boston University IS714 Course Design Evolution: iPod as a case example Source

16. 16 (c) N. Venkatraman [2010]; Boston University IS714 Course Apple: Role of Patents Patent #:7,479,949 Analyzing patents to examine new product trajectories

17. 17 (c) N. Venkatraman [2010]; Boston University IS714 Course iTunes in the US Digital Music Sector Date: August 20, 2009

18. 18 (c) N. Venkatraman [2010]; Boston University IS714 Course Apple’s success in music: Interplay between direct and indirect network effects Indirect iPodAdoption ContentAvailability Direct ComplementorNetworks CustomerNetworks

19. 19 Music in the network era…… CustomerNetwork P2P file sharing; personal CD burning; social and automated recommendations Channel Sold in stores (CDs); Online downloads;downloaded to phones; Networked streaming MobileOperators Mobile network for accessing music Content(music) CDS offered by major labels; rise of independent labels; Digital Rights Management Apple Fairplay; Windows Play For Sure:Open Mobile Alliance (OMA) Software MP3; Apple itunes; Windows Media; Quicktime; Realone etc. Hardware Multiple network-enabled devices (c) N. Venkatraman [2010]; Boston University IS714 Course

20. 20 (c) N. Venkatraman [2010]; Boston University IS714 Course Network of Linkages in Music Customer Network Mobile Operators Channel Content Applications Operating System Hardware

21. (c) N. Venkatraman [2010]; Boston University IS714 Course From Music to Mobile Phones Cross-NetworkDisruptor iPhone iTouch AccessoriesNew Monetization Logics ~ 140,000 21

22. 22 (c) N. Venkatraman [2010]; Boston University IS714 Course Apple iPhone App Store: Extension of iTunes Store

23. 23 (c) N. Venkatraman [2010]; Boston University IS714 Course Apple’s App Store as Complementary Network

24. 24 (c) N. Venkatraman [2010]; Boston University IS714 Course Apple’s success extends the interplay between direct and indirect network effects Media iPhone DeviceAdoption ContentAvailability iPod ‘Apps’ ComplementorNetworks CustomerNetworks

25. 25 (c) N. Venkatraman [2010]; Boston University IS714 Course Apple iPod and iTouch: Fastest Growth..

26. 26 (c) N. Venkatraman [2010]; Boston University IS714 Course Apple iPod + iTouch: The Fastest Ecosystem Ramp in History!

27. 27 (c) N. Venkatraman [2010]; Boston University IS714 Course iPod + iPhone leverage the same complementor network July 22, 2009

28. 28 (c) N. Venkatraman [2010]; Boston University IS714 Course iPod + iPhone: Important anchors for Apple June 22, 2009

29. 29 (c) N. Venkatraman [2010]; Boston University IS714 Course Microsoft versus Apple: 2005 to 2009

30. 30 (c) N. Venkatraman [2010]; Boston University IS714 Course Apple: Market-share? Mind-Share? Profit Share? Source:

31. 31 (c) N. Venkatraman [2010]; Boston University IS714 Course What insights do we get by using this framework to understand Apple? BandwidthLaw Metcalfe’sLaw Technology Domain Moore’sLaw Process Product Service Business Domain 2010 1980