04 b why ipod is successful
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This document discusses why the iPod/iPhone is successful. It provides 3 key reasons: 1) the product itself which offers not just a product but a service and lifestyle, 2) iTunes which revolutionized the music industry through a new distribution model, and 3) the platform model which allows numerous applications to be built and attracts developers. The iPod/iPhone combination with iTunes established a razor-and-blades business model that was very profitable for Apple through interconnected hardware, software, services and applications.
04 b why ipod is successful
- 1. Why iPod/iPhone Is Successful?Wesley Shu1
- 2. Is iPhone a Cellular Phone?2
- 3. Is iPhone a Product?3
- 4. What is an iPod/iPhone?Not only a product, but service & Lifestyle!4
- 5. What is an iPod/iPhone?What’s more, it is a Platform.5
- 6. What is an iPod?6
- 7. What is an iPod?7
- 8. Managerial Features of iPhoneDesign driven innovationBusiness model innovationPlatform as a servicePeer to peer sharing/productionWeb28
- 9. Reason 1: the Product9
- 10. Reason 1: the Product10
- 11. Reason 2: iTuneMusic IndustryNew Wave of Music DistributionMusic Timeline11
- 12. Reason 2: iTuneBefore iTune: 113K iPod per quarterAfter iTune: 733KRazor-and-blades business model – that’s it?12
- 13. LabelsIntermediaries add costsBinding artists to long-term contracts85 to 90% profit from music salesIn the music industry, a record label is a brand and a trademark associated with the marketing of music recordings and music videos.13
- 14. Traditional Music IndustryCreation -> Marketing -> DistributionCreation: musician, lyrists, singers …Marketing: Producers (labels), e.g. Sony Music, BMG, EMI, Universal, & WarnerDistribution: Level 1: distributors, clubsLevel 2: retailersCONTROLLED BY LABELS!14
- 15. New Wave of Music DistributionInternet: online stores & Streaming audioNapsterPeer to peer softwareMusic industry’s responses only backfiredNow Spotify - Spotify VideoA 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
- 16. Apple iTune Solution30-second previewPay per song, $0.99No subscriptionLow profit $0.17 per songDigital Rights Management (DRM)Guarded both labels’ IP and the proprietary technology inside the iPod – Win/Win situationWhile iTune’s profit margin is low, iPod is high – 100%16
- 17. Apple’s SuccessiTune: 80% market share compared to 3% of Napster in 2001iPod: 75%39% of Apple total revenue17
- 18. Nike+18
- 19. Nike +VideoIt’s Web 2.0 too.What's happening now in Nike+ChallengeDistance Coaching19
- 21. Reason 3: PlatformYou R HereWikitude World BrowserNumerous applications – developers download its SDKiPhone Development Center21
- 22. Platforms always wins over applicationsOffice with Word, PowerPoint, and Excel over WordStar, Harvard Graphics, and Lotus 123MS DOSBASICGoogle over NetscapeBrowsers became commodity, and thus we needed a new platform to reign the web.22
- 23. Platforms always wins over applicationsFacebook is also a platformMicrosoft released its SDK for Facebook’s API – Open Stream23