Updated on January 7, 2011: Thanks to feedback, it has come to my attention that there were some errors in the original post, for which I apologize. I therefore updated the post to correct these errors. As always, this blog reflects my views and opinions and does not necessarily reflect opinions of anybody else. I am personally responsible for any errors I make, and therefore am glad to correct.
When people talk about Apple’s success with the iPhone, they attribute some of it to the huge success of the Apple App Store that has over 300,000 applications that were downloaded over 7 billion times (as of Oct 20, 2010).
Apple’s App Store is bigger, in terms of numbers, than any other mobile application store. But this provides only part of the picture. I think there are actually three key ingredients to Apple’s success with the iPhone – together they make up what I now call “appcessories“:
1. Application Ease
Once you start using your iPhone, you quickly begin installing many applications on the device. Many are free, most are paid. Some even cost a lot of money. Some applications you end up not using, others become indispensable—you don’t see how you could work or live without them. For me, these are iThoughtsHD (on the iPad), LogMeIn, Air Mouse, Twitter, Facebook, LinkedIn, TweetDeck, Waze, Ocarina, Kindle, Converter, Google Earth, Skype, Midomi, WeDict Pro, Amazon, Zinio, a few good games, and a few travel applications. I’ve surely invested more than $100 in applications. Yet the investment is not the key factor that keeps me “hooked” on these applications — it’s the fact that I rely on them. If I ever decide to leave the Apple iPhone and move to a competitor (such as Android), I would need to not only repurchase many of the applications (if they exist for the other platforms), but also I might need to migrate my data to them. By now there are so many of these applications, that this alone would be sort of a little nightmare—and thus helps in keeping me loyal to Apple.
I’ve already upgraded my phone twice (original iPhone -> iPhone 3G -> iPhone 3GS). In each upgrades, I never had to reinstall or repurchase a single application. All my applications and settings seamlessly were upgraded to the new device. In all my previous mobile phones, I’ve never had this seamless upgrade experience. In most other phones, I would likely have to repurchase applications and import settings. Why? In part, because the upgrade path would not be assured.
While it is possible to upgrade Android-based phones since the applications are registered with the user based on their Google account and are cloud-based. That is, when one upgrades a user upgrades their Android phone, all the applications they have purchased are available also on their new phone. A question remains whether the applications support the new device as well, as there is quite a bit of fragmentation of the Android platform. Devices vary by their support for a specific version of Android, screen size, resolution, default orientation, capabilities of the device, and more. While most application vendors try to support the widest variety of Android devices, they don’t often achieve a complete result. That said, this is also true for applications designed for iPhone – they may not run as well, or even at all, on upgraded devices. In both Android and iOS case, this is usually a temporary issue until the app developer updates their application.
Irrespective of whether you are using an iPhone or an Android phone, you do get “hooked” on applications – making migration to the competing platform a challenge.
However, applications are just one of the ingredients to Apple’s success…
2. Multimedia
You don’t just consume applications on our mobile devices – you also consume music, movies, and TV shows. Many people, especially young people, have vast collections of digital music. Some rip their music from CDs, share with friends, download illegally, or buy from iTunes (or other legal download alternatives). iTunes also makes it easy to buy music spontaneously —especially on iOS devices. It’s so convenient that I now usually choose to buy music on iTunes rather than download music from other sources or purchase physical CDs. This is also true for all iPod users that have music collections that they manage on iTunes. iTunes is not the best application for managing a music collection, but it works for most people, and many have committed to it because of their iPod experience. And this experience is even richer now, with TV episodes, movies, music clips, iTunes University, and thousands of podcasts. iTunes is really good at organizing and making many of these available on your mobile devices.
Thus far, there is no good-enough equivalent on non-Apple platforms to manage all your multimedia. While iTunes is far from perfect, it does a pretty good job. If you buy into the Apple family of mobile products, you can easily migrate your collection to new devices or upgrade them over time. So far, no other competitor offers this.
It is true, however, that there are third party solutions for Android – applications that help you manage your media. Some are really good. Nevertheless, if, perhaps due to the iPad you’ve made an investment in iTunes and purchased DRM-protected content, you are more “locked in” than if you were managing your media collection in other manners.
And now the clincher, an exceedingly important ingredient to Apple’s success with the iPhone:
3. Accessories
How long do people hold on to their mobile phone? Usually, it’s between 1.5 and 3 years. How often do you hang on to other consumer electronics devices? I believe it’s usually longer. For example, a TV could easily be used for 5 years. An audio-video receiver can be in good service for about 7 years. An alarm clock on your nightstand? Probably 5 years. A clock radio in the kitchen? about 4 years. What about your car? Most of us keep a car for at least 3 years, probably 4 years on average. These are not well-researched figures – they are my estimate. But you get the picture – we hang on to accessories more than we do to the mobile phones.
Why is this important? Well, suppose you bought an iPod, an iPhone, or an iPad. Then you decide to buy a TV set with an iPod docking station. Or an alarm clock on your nightstand with an iPod dock to charge and amplify your music. Or you buy a clock radio with an iPod dock for the kitchen. Or a docking station for the audio-video receiver in the living room. You might even get a car with an iPhone adapter built in…
Bottom line
I’m sure you’re beginning to get the picture – once we make the investment to Apple mobile devices such as the iPhone, we begin investing also in these Apple-specific accessorories, or what I like to call “appcessories“. We form habits around the apps. We have investment in the multimedia content, and perhaps most importantly, we replace the accessories less frequently than we do the mobile phone. Basically, Apple makes it easy to change devices (as long as we stay with Apple) without losing access to the time and money we’ve invested in their applications, music and multimedia, and accessories. And when it comes time to upgrade our mobile phone, we think about these as major considerations. While some of this is true also for Android, the “accessories” aspect is mostly true for Apple due to the similar form factor (albeit lack of full upgrade compatibility) between the accessories.
That’s one reason why it’s easy to understand the loyalty of Apple users. 89% of iPhone users would like their next device to also be an iPhone whereas only 71% of Android users would like their next device to be powered by Android. This is not just a fad. It is a systematic outcome of having consumers who have invested in appcessories.
Does this mean Apple will always win the game? No. For instance, the non-PC operating system war is a multi-front battlefield. One battle is already raging on the mobile phone front. Two other fronts are now in early stages – one on the tablet, and the other on the TV. In case of the tablet battle front, appcessories are still a strong draw for Apple consumer. However, it’s not clear whether this will hold true for TV, and this will make the TV battle more challenging for Apple than the tablet war. Expect at least the tablet battle for dominance to be fierce in 2011.
As always, I’m very interested in your thoughts. Any application or accessory that you cannot live without? Have you figured out how to deal with this on non-Apple platforms? Let me know.
One more point I like to add is the quality of product that Apple deliver leads to their success. Keeping Apple product is a style statement. People have I Phone even though they do not Know/use most of the applications. There applications interface is very user friendly.
Quite true!! I used to use Nokia and i was so addicted to its Symbian apps that i dreaded to switch to any other manufacturer.
Then i bought iPhone and now i am again in the same situation. However, i think that there is always a margin for improvement, so even if i will buy anyother more improved device, even though, it will take some time for me to adjust to it, i will again be in the same position. It’s all about innovation!!
Or should i say,”Survival of the Innovators”.
Your analysis is sopt on! The apps and accessories one has invested in, can be a major factor while upgrading the phone.
I own an Android device,though it’s neck-to-neck with iPhone in most aspects, app store syncing is where iPhone wins. Android market doesn’t have a central account system, so I had to reinstall all my apps after upgrading the OS to Android 2.2
In short, had i paid for any app (I didn’t :)), it would have been a loss for me, and in addition to the time wasted in reinstalling!
Thats really a nice insight provided. Definitely with Apple products you start looking for things which will make your investment on appcessories worth and in the way of doing it we are actually doing more and more investments. Thus sooner or later you will be Appleholic 🙂
That’s Apple… Steve Jobs is KING !!!!! Before Ipod there were a big market of CDROM Players and the MP3 player and Sony was the best…. But Jobs came in and create his own nitche and created a product which changed the flow.
I believe yes Apple will alway win the game, because Jobs vision is far far bigger than others.
Car manufraturers are making cars with ipod dock and they are selling their products showing off this new upgrade.
I saw one episod on discovery in which they were showing the Apple Ipod-Iphone story and the way they came up is awesome… That is the business !!!
No matter there might be failures but the success is so big that few failures are not visible.
Apple is in the news for singing an agrement to provide micro USB on its devices. I guess once that is done we can see a whole new range of accessories which we can used across devices(from different vendors). Don’t know if Apple will part away from their standard Dock Connector.
Apart from Apple Brand and Apps, What I like most about my IPHONE is THE fantabulous user interface it provides, I bet no other vendor can ever match that.
http://news.cnet.com/8301-1035_3-10274953-94.html
I agree that once you have spent a considerable amount of money on apps, you are more likely to stay with the platform.
When it comes to iPhone accessories, it is a different story. Apple have this habit of changing the hardware with each iteration of the iPhone in such a way that your old accessories that worked fine for an older model of the iPhone, now come up with messages such as “This accessory is not optimized for this iPhone” or “This accessory is not supported for this iPhone”.
Clearly there is a ploy to get consumers to purchase additional accessories that support the latest iPhones. This is not acceptable and could potentially damage the brand. Where is the universal micro USB connector we are supposed to see that all mobile phone manufacturers signed up to, including Apple, rather than this proprietary connector? Another ploy to keep people locked into the Apple platform, but this one could backfire since older accessories generally are not supported!
Welcome back Tal – missed your tweets for the last couple of weeks.
Good analysis of Apple’s three-part approach to making it really easy for us consumers to keep on buying their very pretty poison.
And ease of upgrade application and data/content migration between generations is a huge barrier to competitors getting in on the act. Incidentally this is reflected in the enterprise software world where apps vendors have been known to make it less than straightforward for customers to migrate away from their products. That’s hardly surprising but is creating a trend where buyers are increasingly asking apps vendors to include the full migration scope (not just the transform/load) in their proposals, and to contract based on outcomes/shared risk.
Accenture came up with the ‘Tridget’ phrase to describe the potent device/web app/content datacentre mix a few years back. I like the appcessories (hope you’ve trademarked it;-)) name as a new spin on this. Tridgets are certainly growing all around us – from smart energy monitoring to pacemaker management to online parking, and where these hook up a tightly-coupled hardware brand/closed software platform/convenient content management you’ll see strong loyalty following.
But that will only work over time when an excellent user experience matches the marketing message – and Apple are past masters at that.
Happy Holidays.
♥ Apple products attract cream crowd consumers who can easily shell out more money on accessories unlike consumers of other platforms.
Just quote the price of such accessories, they are relatively expensive in many cases !!!
♥ Have to agree that Apple keeps their interfaces “appcessories” friendly ! ( But in tomorrow’s world it won’t be difficult to have universally wireless integrated devices unlike giving away **docking stations** )
It could be a Wifi “stack” for bluetooth like capabilities !!!
Or even faster Buletooth with new profiles stack, universally integrated in to non iOS mobile devices, super compatible with fella consumer devices !
♥ Other platforms like Android,Bada(Samsung),Symbian are targeting varied consumer base with price sensitive consumer.
Hence unless the ecosystem evolves to have cost effective compatible accessories there won’t be a Apple like success !!
Why almost all of the posts here are about Apple? There are so many interesting things out there beyond this single company. It will be only fair to publish similar posts about competing products.
Great post Tal, and yes, cogent summary of a great business model. But it does nothing to allay my mild unease about Apple’s model – it’s all very smart, very user centric and beautiful, but it’s also totally, utterly closed, and when you take on something like an iPhone you easily succumb to the might of a sole provider. Tim Berners-Lee himself has had quite harsh things to say about Facebook being a totally closed environment, and I don’t think it’s a stretch to say it of Apple too.
But, then again, it was always thus – it’s a smart business model that ties consumers in again and again through a great user experience with lots of ‘peripherals’. Future business books will point to this as being the tech version of Gilette razors…
I think the way many people react to Apple products, it’s almost “Obsessories” rather than Appcessories. People seriously obsess over Apple products. The Apple attention to customer experience is in every stage of the product:
– The Apple store: basically a candy store for techies. Radio Shack has lots of electronic goodies in it, but you won’t get your adrenalin going walking into a Radio Shack. Apple stores are designed to make you want to sit down and start playing around with stuff. They’re more like Vegas casinos than stores in that regard.
– The packaging: unpacking an Apple product feels like unwrapping a gift rather than opening a product package. No ugly plastic molding here.
– The product: if it’s not visually beautiful, it’s not going out the Apple doors. For Apple, being cool is not enough – it has to be drop-dead gorgeous.
While the Designer Tech mentality Apple has is a big contributor to first time buyers, I think it’s also very significant in return customers as well; design is a fourth element in the customer loyalty equation.
The post seems to be a page from an Apple Lover’s Diary.
The fact that Apple doesn’t give freedom is the only reason why some stay away from Apple and many that have made the “mistake” once are forced to stick to Apple(stuck with Apple – mistaken as loyalty to Apple).
Apple products are very cleverly marketed and of course have at times an innovative edge over the others. But it’s the marketing that is the reason for majority of its sales. It is something bought as a “Must Have Accessory” itself – as something to show off, which also doesn’t work out in many cases since the users are not always able to utilize even what is offered. I have come across many such Apple product users – however haven’t come across any other smartphone user who isn’t aware how to utilize the gadget to its maximum potential.
Question that comes to my mind is-
Would Apple dare to test Loyalty by allowing more freedom?
Parikshat,
1. There’s nothing wrong about loving Apple. Seems a lot of people resent that, I’m not sure why.
2. People don’t _have_ to buy Apple products. They buy them because they want to. And they don’t want to buy Apple products just because of marketing. Apple products offer real value to people, primarily in enjoyment of use. Not everyone is looking for that – some people prefer richer feature sets, for example, but those who are looking for a great user experience get that from Apple products. That’s not marketing hype. I’ve also met plenty of people who tried Apple products, didn’t like them, and moved on to something else. Bottom line, people who stick with Apple like it (or even – perish the thought – love it).
3. People don’t have to utilize every single feature or function a product provides for it to be useful for them. My TV has dosens of features most of which I don’t even know exist; am I enjoying it less because of that? No. By the way, comparatively speaking, most people use a very large portion of Apple mobile devices’ capabilities – Pepole who have iPhones frequently use the non-phone features more frequently than the phone features. This, however, is not unique to Apple, and is also true on Android.
Passions run high when it comes to Apple. Before buying my new smartphone, I asked Facebook friends whether they’d recommend an iPhone or an android device. A heated discussion with many exclamation points ensued…
Anyway, not really a comment but I just happened to see this (via my new smartphone).Here’s what Jerry Seinfeld thinks about iPhones 😉
http://www.youtube.com/watch?v=PYDA7__znfY&feature=player_embedded
P.S. Tal, I’m really enjoying my new Android 😉
Wow! Thanks for all the feedback.
Anand, I agree with you. Apple’s quality is as good as or better than practically any consumer electronics / computing product I own. Their products usability are also superb.
Ravi, true. The point I’m making is that Apple has a consistent enough form factor and connector interface that it’s not JUST the applications, it’s also the surrounding accessories, making them “appcessories”.
Varun, I think that if and when Apple actually do support other devices, it might either be by an adaptor or in addition to their native connector. Therefore, not breaking the compatibility with the rest of the devices. Btw, that news about the agreement is very old. I don’t know when, if ever, it will actually materialize…
Brian, you are absolutely right. I have this issue with all my iPhones (3 of them – a 2G, 3G, and 3GS). Some chargers work with some iPhones but not with others. This is also true for some of the accessories such as speakers and such. That said, I doubt there’s a ploy here to get to upgrade them and I believe they will stabilize. Note that iPhone 4 is no longer round and doesn’t necessarily fit in every accessory designed for previous iPhones. Also, the iPod Touch is last iPod touch is still round. I don’t see that universal connector materializing realistically any time soon. The public commitment doesn’t mean it will happen nor exactly when and how.
Tony, thx! Happy to be back. Regarding the trademark – I actually checked, since I thought it would be cool to trademark it. However, it turns out a company called New Potato Technologies, Inc. has requested this trademark. But it is in dispute with the USPTO and currently suspended. Quite interesting, I thought. They did manage to get registered the trademark for “Appcessory” (not plural).
Rakesh, yes, all could become wireless, including charging. The technology exists and the question is when will it penetrate all these devices – universal wireless connectivity. There’s room for many options for consumers, and you might say that Apple is not at the low-end of the market, which leaves an opening for many other players. But the mere fact that they have some consistency within and across their product lines – both in terms of applications and in terms of accessories and multimedia is still a rather unique advantage.
Anonimous (correct spelling: anonymous), there might be many more interesting things. However, this is my blog and I write about what’s interesting for me and what I’m interested in sharing. There is no attempt to be fair nor balanced.
John, every company tries to create an “unfair advantage” – also known as a competitive edge. Apple has many tricks up its sleeves in this regard. Some openness (for instance in the plethora of innovation available to app developers, web developers, and accessory developers), and some closed – to both protect Apple from competition to core assets as well as to create a more compelling and consistent user experience. At some points Apple has crossed the line in, and has eventually pulled back on some to avoid too much regulatory scrutiny. Whether they will avoid it completely is yet to be seen.
Parikshat, I’m writing this on my iMac and am now surrounded by Apple gadgets (iPhone, iPad, etc.). While it’s hard to believe it, I’m not a die-hard Apple fanatic. I use Microsoft Windows, Outlook, and Office every day. I do not believe people buy Apple products because of Marketing nor as just something to show off. I actually believe iPhone users, on average, use more of the functionality of their device than equivalent Android users does of their device. i don’t have hard facts for this, just anecdotal. Android is a good OS, but it still not nearly as usable for the average user as iOS. The loyalty survey I mentioned (and it’s not the only one that comes to the same conclusion!) does not depend on freedom at all – it’s what people WANT their next device to be after they have experience with it. I can leave Apple at any day. Any device one begins to depend on creates “migration headaches” – not just Apple. This is true for any device and OS. But still, some people prefer to “stick with what they have” and others would prefer to change. iPhone users are much less likely to desire another phone thereafter than practically any other phone owners.
Adi – thx for responding to Parikshat – agree with every word.
Naomi, loved the video 🙂 I’ll add a nice BBC skit to the mix…
Thanks for all the discussion. Keep’em coming!
Tal
Hello,
Adi and Tal – thanks for the inputs.
Certainly loving any brand is O.K. especially after having spent a fortune on it- even after a single purchase.
My argument however revolves around the value addition relative to investment which would need a user to explore and use the awesome features a gadget offers. My decision to upgrade weighs in all that I would be empowered to do, against the investment. Certainly this would keep me from getting in line for the launch of 7next version of what I already have!!
Apple being the first in the market has a lot of advantage and has been reaping it’s benefits immensely. If we could measure the “cool-factor” (embedded through marketing building upon the innovation) involved in purchase of Apple products it would perhaps be the deciding factor for most. Apple has been doing this so brilliantly and for so many years now.
The set of Apple users I have personally known or observed were the source of my comment.
I believe as the support for Android within the organizations grows it would be changing the statistics once again – example some don’t allow outlook access from Android but allow iOS and even Windows or Symbian.
Regards
Parikshat
Stop bragging about Apple iPhone. Android is the most powerful handset OS ever created. Only Android gives true multitasking capabilities unlike iPhone which only pauses apps to background.
Now that we are all appreciating the success of Apple in terms of their strong market share and presence, I would like to know your views about their recent decision to pull off a Wiki-leaks app from their app-store. What do you guys think about it?
Another sign of success is when your products become the subject of religious debates…
As for me, I find all Tal’s points as good reasons to go for Android as my next smartphone (assuming I will dump my BB one day). It’s open, fully web-synced, and I must believe that one day a solid alternative to the horribly bloated iTunes will emerge. This software is an act of treason against humanity 😉