Apple Ecosystem: closed and effective
Ecosystem in its essence is “a biological community of interacting organisms”[1]. In technology terms, ecosystem refers to a group of devices and software that represent a single collaborative network. In other words, it is how well each product or service belonging to a company work individually and if end-users will get better experience when all of these products and services work together. It is the question if the whole is greater than sum of all parts.
Apple ecosystem is one of the main competitive advantages associated with the brand. In fact, the iPhone maker is one of the earliest technology companies globally to purposefully form an ecosystem.
Third-party products are not usually compatible with Apple products and all products belonging to Apple portfolio work well with each-other. At the same time, the ecosystem of Apple is much more than just a collection of more than 2 billion active devices[2] or services that work seamlessly.
Apple ecosystem integrates the following key elements:
- Company image of creativity that motivates customers to upgrade their devices frequently.
- Perception of status and effectiveness that is associated with using Apple products
- Efficient devices and services that perform best with other Apple products and services
Apple ID is the cornerstone of the ecosystem. It is used to register all Apple devices.
Advantages of Apple Ecosystem
Thanks to services such as iCloud, airplay, and airdrop, one can start a task in on one Apple device and continue it on another and there is no need to download or install anything. Moreover, Apple ecosystem offers features like AirDrop, iMessage, and FaceTime on macOS; unlocking a Mac laptop with an Apple Watch; or auto-pairing and finding lost AirPods, and the list goes on. Today, Apple ecosystem is widely considered to be the best in the industry, and arguably in the world.
Theoretically, no one has to get locked into Apple ecosystem and you can purchase and use only one Apple product; nevertheless, pairing different Apple products can offers advanced user convenience and functionalities. For example, if you use iPhone and Mac, you can get phone calls to your computer even when your iPhone is nowhere near you and you can also send and receive phone text messages on your Mac.
In other words, to make the most of an iPhone, you will have to use an Apple computer, like a MacBook Air or a MacBook Pro. You can also use your Apple watch to unlock your Mac, play music on your phone and then tap your HomePod mini to play the music and receiving iMessages on all of your Apple devices. Using iCloud data synching you can continue where you left off from one device to another, you can seamlessly switch between devices during FaceTime call.
As illustrated in figure below, all products belonging to Apple ecosystem are highly compatible with each-other and the purchase of one product belonging to the brand’s portfolio often leads to the purchase of other products. Gradually, it will come to the point that consumers only give preference to devices that work best in the ecosystem where they live. The current ecosystem carefully cultivated by Apple is a powerful customer retention strategy.
New features and updates for iOS, iPadOS, WatchOS and macOS tech giant regularly introduces are available in one form or another for all products within Apple ecosystem and this is one of the important reasons that makes the ecosystem attractive for end-users.
Issues with Apple Ecosystem
From the consumer viewpoint, living in Apple ecosystem is not bad at all. As discussed above, all Apple products and services synch incredibly well with each-other, providing high level of user convenience. However, there are some issues.
Firstly, remaining within the ecosystem is increasingly expensive. Apple products are usually the most expensive in their respective product categories in the global scale. The world’s largest IT company by revenue puts bigger price tags on its products because it is aware of the difficulties for customers to break free of its ecosystem.
Secondly, the company has been caught slowing down older iPhone models deliberately to encourage customers to upgrade to new models. Therefore, it can be argued that the costs of enjoying the benefits of Apple ecosystem are increasing and unavoidable. Although the tech giant was fined EUR 25 million by France’s competition and fraud watchdog DGCCRF for deliberately slowing down older model phones without informing consumers[3], there is no guarantee that such a practice will not be used in the future.
Thirdly, some consumers do not like being captive to any brand in a psychological level. As a notable example, Apple co-founder Steve Wozniak stated that he doesn’t like being in Apple ecosystem because he doesn’t like being trapped and he likes being independent.[4]
Apple Inc. Report contains the above analysis of Apple ecosystem. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S Model on Apple. Moreover, the report contains analyses of Apple leadership, business strategy, organizational structure and organizational culture. The report also comprises discussions of Apple marketing strategy and addresses issues of corporate social responsibility.
[1] Luke (2018) “The Apple Ecosystem” Apple Magazine, Available at: https://applemagazine.com/the-apple-ecosystem/36702
[2] Clover, J. (2023) “Apple Now Has More Than Two Billion Active Devices Worldwide” MacRumors, Available at: https://www.macrumors.com/2023/02/02/apple-two-billion-active-devices/
[3] Apple fined for slowing down old iPhones (2020) BBC, Available at: https://www.bbc.com/news/technology-51413724
[4] Dormehl, L. (2015) “Wozniak: I don’t like being trapped in Apple’s ecosystem” Cult of Mac, Available at: https://www.cultofmac.com/397713/wozniak-i-dont-like-being-trapped-in-apples-ecosystem/