Why Apple Is So Sticky 595
Hugh Pickens writes "'Sticky,' in the social sciences and particularly economics, describes a situation in which a variable is resistant to change. For websites or products it usually means that visitors or customers keep coming back for more. Now Fortune Magazine reports on an analysis by Deutsche Bank's Chris Whitmore on what makes the (iTunes-based) iPhone-iPod-iPad platform so sticky and why it's going to get harder, not easier, for Apple users to switch, no matter what Google and the rest of Apple's competitors have up their sleeves. Whitmore says the investment Apple's customers have made in content for those devices in terms of apps, videos, and music purchased at the iTunes Store creates Apple's 'stickiness.' Apple has an installed base today of about 150 million iTunes-dependent devices that could grow to more than 200 million by the end of 2011. Whitmore comes up with a cumulative investment in those devices of about $15 billion today, growing to $25 billion by the end of next year. 'This averages to ~$100 of content for each installed device,' Whitmore writes, 'suggesting switching costs are relatively high (not to mention the time required to port). When Apple's best-in-class user experience is combined with these growing switching costs, the resulting customer loyalty is unparalleled.'"
Re:music? (Score:1, Interesting)
I know at least 5 people that switched from their iPhone to an Android device .... I don't think any of the lasted for a month before going back to their iPhones. So yes, some people switched, and then regret it fairly soon after.
Android doesn't actually offer any advantage over the iPhone that really matters and it has several disadvantages. Slashdot rants and raves over open and free and blah blah blah, but when it comes right down to it the only people ranting about 'free' are too cheap or poor to buy either so they just rant and don't actually matter. Then there are the techies that are happy to use an inferior product just so they can 'stick it to the man' ... unfortunately the man doesn't give a shit about all 8 of those people.
You guys can sit around and circle jerk to android all day long, but I've yet to meet a person who actually thought it was great and not one person can provide an actual advantage android has to the iphone other than 'OMG CLOSED APP STORE OMGZ!@$!@%' which no rational/balanced person actually gives a fuck about.
Media porting (Score:2, Interesting)
This is an example of why we need media portability laws, just like laws were passed to allow you to port your cell number from one carrier to the other. Laws need me be made allowing media, software, music, books to be portable between platforms.
This is also another reason i believe music, movies, and likely now book should be sold with serialized licenses included. The license gives you access to the exact same content, no matter what medium or method it is distributed. You goto bestbuy, buy a physical CD, inside the case is included a license for the media with a unique serial/key. you could then goto itunes, amazon, etc. enter in this key and get instant access to a downloable version of the same content that you purchased on a physical disk. Same would work with say a bluray disk you buy at bestbuy. come home with the disc, plug the serial number into itunes and instant access to a downloadable, obviously lower bitate version for your ipod/iphone
Re:Value calculation is skewed (Score:3, Interesting)
The thing is people get into the habit of buying their music on iTunes. Like they had the habit of buying it in the record store or a big-box like Best Buy or Wal-Mart before it. Habits are just hard to break. There seem to be enough people who like iTunes enough to keep going back.
I prefer getting a physcial CD from the record store or mostly Amazon now. Seems iTunes is having such an effect on the market, coupled probably with piracy and less music interest, that most record shops are cutting back on CDs anyways.
Nothing like another dead horse to flog. (Score:4, Interesting)
Re:Apple "It Just Works" (Score:4, Interesting)
This is why Apple make it in the consumer market - the whole concept of "buy only our products" works - we see Microsoft and Linux fanboys going their respective routes as well (OpenMoko, Linux, Linksys Routers etc.) because they want it all to be the same. When that concept works and the software actually integrates nicely with the hardware (something that only apple, as a hardware company, are currently able to achieve because they write the software for their own hardware), the average consumer tends to enjoy. Now if only they had a decent server, I'd think about getting one.
Side note: Find me an easier to deploy and use solution than NetBoot/NetInstall (with DeployStudio) and I'll stop using a 27" iMac for my Windows 7-only gaming rig. That ability to image a machine on the spot with Target Disk or NetBoot is the major selling point for me.
Re:The question is (Score:1, Interesting)
Apple makes computers.
No, Apple re-brands a bunch of existing technology and sells it.
The making of the computers is reserved for the many vendors Apple utilizes.
Apple is akin to Virgin but for computing/technology. I believe if Virgin decided to start selling computers it would quite easily eat in to the Apple market-share.
Re:Because of the kind of people who buy Apple (Score:5, Interesting)
Apple owner here. You have identified a sizable segment of the mac ownership demographic. The demographic that buys apple shit because "apple is cool and I want to buy cool" These people are known as "Mactards"
However there are two other sizable segments.
1) The segment that thinks that Apple is easier and "just works" when compared to Windows. They dont want to fuck about with their PC. (I disagree with these people because Windows7 "just works" too)
2) The segment that thinks that Apple is easier and "just works" when compared to Linux. They dont want to fuck about with configuration files and rc scripts anymore. I fall into this segment. I demand a usable and strong command line with all the proper *nix utilities, but I want a strong windowing system and dont ever want to fuck about with video card drivers ever again.
The apple gui/desktop is superior to kde/gnome/X... not all of us bought apple because apple is cool, some of us bought it while waiting for linux to become more polished.
Re:Apple "It Just Works" (Score:4, Interesting)
Re:The question is (Score:5, Interesting)
Re:The question is (Score:3, Interesting)
Regarding Music - you're right on the money. When I dumped Apple, it was a pain to move the DRM'd music across, so I either nuked it and re-bought or just didn't worry about it (lots of 'one hit wonder' crap, really - didn't care if I lost it).
Regarding Apps - I think they are a LOT less sticky than people want to believe. Most people in my office have dropped iPhones for various other devices, and didn't give the sunk costs a second thought. You'd have to be poorly off to think that $30 or $50 worth of iPhone apps is a large expense. You will probably spend more on a memory stick for your new phone. I know I did :)
Regarding app devs? I doubt it matters. I have yet to see anyone find a single 'Killer App' for the iPad or iPhone (or really even Android). The stores are largely filled with toys and stupid time wasters.
My 'stickiest' app was CS2. I had the premium version, and there is no upgrade path for Apple -> Windows (or other). Thank goodness CS2 performs so badly on Apple Intel boxes :)
Re:The question is (Score:4, Interesting)
No, Apple re-brands a bunch of existing technology and sells it.
They don't just re-brand it. They steal it, polish it up, and releases it in a stream-lined and user-friendly product with all the bugs worked out. And as we all know, copying ideas and improving on them is Good(tm). And some of Apple's ideas are original, like multi-touch.
I believe if Virgin decided to start selling computers it would quite easily eat in to the Apple market-share.
Marketing isn't everything. Having the right idea, the right people and the right corporate culture at the right time and place counts for a lot.
Microsoft could have made Windows as user-friendly as Mac a long time ago, with all their money and their foothold on the market, but yet they fail in that department again and again.
Re:The question is (Score:3, Interesting)
iPod has only plateaued because the iPhone had iPod built in. The mobile phone market is huge, way bigger than the PC market. And so far Apple only has a small market share. There's plenty of room for growth. And even if/when they are market leader, that doesn't mean growth stops. Remember Microsoft kept it's PC OS sales growing for 25-30 years.
And don't forget the iPad. Just like the iPod and iPhone before it, many people on slashdot dismiss it. But I keep hearing people try the iPad and love it and want one, just as they did before with the iPod and iPhone. It has a long successful path ahead of it.
Yes, the rumours are that the next product is an iPhone OS based Apple TV for $99. And your other suggestions are good too.
Then what about photography? In many ways iPhone and other camera phones have already revolutionised taking snaps. But what about the market for SLR digitals, and quality camcorders? There's the opportunity to use iPhone OS for their UIs, and bring Apple's UX and innovation to bear. And imagine what all those app developers could come up with if they had programatic control of every feature of an SLR or a camcorder. Plus it's a great fit for Apple, both in terms of their brand image, the fact that they are premium products, and their existing product lines - Aperture, Final Cut, etc.
Plenty of opportunities for growth.
Re:The question is (Score:4, Interesting)
I agree with your concerns about how apple treats customers, however it's hard to deny that without apple we would not have all these nice shiny toys. Apple appears to be the only company capable of creating a product with a specific set of goals in mind and make those parts just work.
Apple products are not without their flaws, but they generally don't feel like they just slapped together some random hardware components and called it a day. Most other companies products feel just like that.
I still stay away from buying apple because I hate their lockdown policies, but I am sad to say that apparently they are the only company capable of actually designing and making a proper product. Something that has a specific set of design goals and accomplishes exactly those - nothing more, nothing less.