Apple Ecosystem: closed and effective

Ecosystem can be defined as “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. Apple ecosystem is one of the main competitive advantages associated with the brand. Third-party products are not usually compatible with Apple products and all products belonging to Apple portfolio work well with each-other.

Thanks to services such as iCloud, airplay, and airdrop, you can start a task in on one Apple device and continue it on another and there is no need to download or install anything. Today, Apple ecosystem is widely considered to be the best in the industry, and arguably in the world.

Theoretically, you don’t have 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.

As it is 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.

 

Apple Ecosystem

Apple Ecosystem

 

Apple ecosystem integrates the following key elements:

  1. Company image of creativity that motivates customers to upgrade their devices frequently.
  2. Perception of status and effectiveness that is associated with using Apple products
  3. Efficient devices and services that perform best with other Apple products and services

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 two 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, 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.[1]

Apple Inc Report contains a full 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.

Apple-Inc.-Report-1

References

[1] Luke (2018) “The Apple Ecosystem” Apple Magazine, Available at: https://applemagazine.com/the-apple-ecosystem/36702

[2] 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/

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