If you’re King of the Hill and there is another that’s banging on the front door you protect your house (top of the line iPhone) by making sure that all your flanks are covered. That’s the virtual role of the iPhone 4S and the line’s new pricing structure.
As pointed out in a New York Times article, ‘The iPhone 4S Is as Much About Google as Apple’, Apple’s run this play before. In fact, this winning move – the Platform Play – has been around for centuries and been run across all industries. The key stone of the strategy is making sure that you’re not the only one who benefits from being up there.
Before exploring further it is worth the effort to paint the contextual picture. The first thing that we have to remember is that despite the popular saying ‘Everyone loves a winner’, this is not at all true. Success can breed future success; it can also breed contempt. The proof in the case of Apple’s mobile platform (iOS 4 soon to be iOS 5) is the legions that embrace the Android OS, other systems, and would love to see them fall off their perch.
Secondly, Android became the most popular (42% of smartphone users) in part due its decision to play in the lower-price end of the pool; a large consumer segment that Apple chose not to play in.
So, what to do now?
The key to successfully staying on top is to execute a strategy that interlocks one’s success deeply with the success of the whole industry. It is a long-term play that redefines success as a platform that a growing number of companies or individuals can use to drive their own success – share the wealth. Sound familiar?It should, think iTunes for the music world, and a vibrant app (application) developer community that’s formed because of their smart mobile device platform. If we quadrant off the deep pocketed development shops (maybe 15% of the total), many of the rest have staked their future on a specific platform. They have bet on its success, thus have a strong interest in maintaining and strengthening it. In other words, the ecosystem is now protecting the house.
That’s the Platform Play.
It is much more about setting things up and guiding the overall process while letting others do much of the marketing for you. It’s not about a direct contest – anymore. It is about enriching the platform from which additional value gets built.
Fill the product-line with a spectrum of devices that cover every shape and size of customer to capture the full range of margins. Plant low cost (can you say free iPhone 3S) products to keep competitive offers form undercutting the core profitability driver. Also, never let the participation cost be something stakeholders can complain about.
It’s not only about what you do, but also what you don’t do. Reinforce the platform and don’t compete for attention with your partners. They are going to mention you anyway. I can’t imagine that Sprint isn’t going to do a huge multiplatform marketing push after becoming the latest US authorized carrier. And, app developers are constantly highlighted in niche publications.
Make your stamp of approval monetizeable. It’s all about logos, partner certification, and membership programs. What’s Apple’s membership program? Submitting and gaining approval for an app to be listed in the App Store.
Let your partners take on most of the frontline marketing. The leaders focus is on nurturing the platform by showing appreciation to the partners and broadcasting to the world how they are benefiting.
At this point you might be asking yourself, so why did Apple originally go with a limited – single operator and high end only – distribution strategy? Well they had to do something to originally gain the high ground. And, Apple…
Oh, and don’t think that this only works for large players. Any business can apply this playbook. In fact, in some cases it is more effective for local players. Think about the neighborhood retailer who utilizes his vehicle (retail shop) to increase sales of locally produced goods and services. There is no doubt that they will talk favorably about the retailer and encourage others to frequent the shop. It can be done.
Who’s on your team?
It just so happens that I penned this post just a few hours before the world lost Steve Jobs. There has been a tremendous outpouring of sympathy and support for both his family and colleagues; and you can count me in that number. Much has been said about his eye for design, retail execution, and fanaticism for perfection. What I don’t want to have overlooked was his ability to leverage his assets and the current industry environment to develop, deploy, and re-invent a company’s strategic initiatives.
RIP Steve, job well done.