Why the ecosystem approach may backfire for Apple in the long run, in absence of market share

iOS ecosystem matters to consumers but upto what extent? Can the ecosystem approach even hurt Apple?

It’s been 8 years since Apple launched the iPhone — the best phone ever made. Over the years, it’s built the best ecosystem around it, supported by a legion of developers, users and incremental distribution — now including Japan and China also. However, by following only a certain strategy path continuously, it may have missed the wood for the trees.

Apple’s flaw is not that it’s not making good hardware (it’s still making the best there is) or good software (yes, iOS is a fantastic user experience though it lags in light years when it comes to innovation on features that involve cloud, algorithms, cross-platform works, or personalized user customizations); but that it believes that everyone in the world has $600-$800 to spend on iPhones.

The WWDC keynote reinforces the view that Apple believes in its own supremacy and only serving the high-end market (notice the focus on high end game graphics, Continuity, and launch of a new coding language that requires a Mac to write). This may continue to serve the company for many many years ahead but it erroneously continues to believe that users who are buying $100-$250 Android phones are misguided fools — they are not.

Disruption waits for none. Blackberry and Nokia got destroyed in just a few years. BBM and iMessage are a Joke today and no matter how much they copy WhatsApp and WeChat of the world, they do not matter at all to any normal user.

Android will dominate in coming years not because it’s great (it’s not — not yet) but because it’s good enough and most users won’t really care about what they’re missing by not switching to iOS

Android will dominate in coming years not because it’s great (it’s not — not yet) but because it’s good enough and most users won’t really care about what they’re missing by not switching to iOS. Just like Facebook is good enough today for most of us and no one is really bothered about G+. Google search is good enough and no one can be bothered to try Bing.

Similarly, Android is already becoming good enough for 90% of world’s population who’re quickly migrating to that platform because of its ubiquity and availability at every price point, and Apple’s brand and excellent ecosystem may have no levers to pull them since it does not even understand this market, their requirements or has software to support them.

Apple’s strategy of building a smarter and deeper ecosystem may even backfire as most of the users buying their first Smartphone as Android may find switch to iOS increasingly more daunting

A large part behind Apple’s Mac failure in late 1990s and early 2000s was the fact that it had only 5% market share by volume. Users who had lived their entire life on Windows and almost didn’t know anyone using Mac were very sceptical about buying a Mac since they felt the learning curve for a Mac would be very steep one with no one to guide or support them among their friends or family. Apple, on an average, is today at 12% of phones market share by sales globally but it may decline further as Android keeps on growing. In fact, Apple’s strategy of building a smarter and deeper ecosystem may even backfire as most of the users buying their first Smartphone as Android may find switch to iOS increasingly more daunting.

Just getting 2 product cycles wrong is what it takes to alter the dynamic of industry. I hope Apple gets it right this time in September when it launches this year’s iPhone and genuinely goes for a $300 phone (last year’s iPhone 5c was a dud on strategy level, with wrong pricing and product strategy).

September 2015 may not be so forgiving to Apple.