
Apple's market segmentation strategy - danilocampos
http://radar.oreilly.com/2010/09/apple-segmentation-strategy-an.html?y
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danilocampos
"Apple has used its vertical integration of the iPod media player and the
iTunes marketplace across all of its devices to create a billing relationship
with 160 million consumers..."

This is the most interesting part of the modern Apple story, for me. This
opportunity for instant purchase is a dramatic force multiplier for Apple in
_every single avenue they explore_. It's an absurd hothouse ecosystem they can
just plug into any content-driven product.

For me, when other companies decide they want to take on Apple, I couldn't
care less about how they rip off the form factor or UI. I'm looking for one
thing: a credible answer to Apple's instant billing mojo.

Amazon seems to get this, and they have billing relationships they're able to
exploit to make it happen. Kindle is a great play in this direction. Funny
enough, it looks nothing at all like an iDevice, yet there's that one crucial
similarity everyone else is missing.

For an interesting counterpoint, look at Android. Google does not have its
shit together with regard to billing. As a user, entering your billing info is
a clunky pain in the ass. As a developer, you can only get paid if you live in
one of ten countries. These realities conspire to keep Android app sales low
compared to iOS, and it's a tragic missed opportunity.

Amazon's Android store move is brilliant – those guys have the hustle and
experience to do the hard work necessary to take on Apple in mobile content.
They aren't solving the geographic problem yet, since it's US only, but give
them a bit of time and they'll be running circles around Google.

~~~
dirtyaura
_This opportunity for instant purchase is a dramatic force multiplier for
Apple in every single avenue they explore._

I fully agree. They also forced iPhone buyers to have credit cards in many
countries to even buy iPhone. And they of course forced iPhone buyers to
create iTunes account. These would have been totally absurd customer
requirements from the perspective of e.g. Nokia, but for Apple it was a super
clever way to grow their billing ecosystem.

I think their biggest opportunity is still a head. When they create a
"Buy"-button for a browser, so that any web page can integrate to iTunes
billing, the web economy won't be same anymore.

I was really bullish about this already over a year ago (
[http://dirtyaura.org/blog/2009/06/16/mobile-startups-and-
sma...](http://dirtyaura.org/blog/2009/06/16/mobile-startups-and-small-
payments-opportunity/) ), but there are tons of problems with this (technical,
scalability, fraud detection, legal...). However, I'm pretty sure that it will
happen during this decade.

~~~
danilocampos
Oh, that's _fascinating_. I hadn't even thought of that. You turn the entirety
of the web, at least those who will play by your rules, into an App Store.

Wow, with that Apple benevolently takes the entirely world by the balls and
starts a whole new gold rush. It's so interesting, it must be inevitable.

30% cut would be a bit rich, though — makes PayPal look downright charitable
by comparison.

~~~
Hoff
And they have real-world experiences and the volumes of data and the
programming skills that are necessary to look for purchase patterns indicating
fraud, too.

------
bambax
The article is strangely written but full of very insightful observations.

I like this one best: _"Customers buy outcomes, they don't buy attributes"_.

Endless lists of features are pointless; features that work and are integrated
into a predictable, enjoyable user experience are what customers want.

But of course the hard part is to build a credible promise; Apple's has been
30 years in the making. Microsoft has one for the enterprise market. I'm not
sure Google still knows what it is doing.

~~~
mechanical_fish
_Endless lists of features are pointless_

It isn't _quite_ that simple. The endless-checklist-of-features sales
technique was born for a reason: It comes from _corporate_ sales, incubator of
a lot of technology and a place where a lot of salespeople get their
experience.

In corporate sales feature lists are useful because your customer is a crowd
of disparate people. The accounting department wants Feature X, the factory
managers need Y and Z, the facilities folks need Q. Being able to tick off all
those checkboxes helps to close the sale.

And, indeed, Apple has traditionally had trouble in the corporate space
relative to the consumer space.

What Apple has managed to do is to break free of the paradigm where hardware
and software are primarily designed for the business market, then sold to non-
business customers as a sideline. With Apple it's the other way around.

