The product lifecycle – as explained by Apple

Tomorrow is the latest Apple event, apparently focussed on iPads. It’s time to dredge out my predictor from 2011. Black are the original predictions, red the results to date and I’ve put green boxes around potential releases this year. Missing is the rumoured iPad mini retina display.

The predictions are showing their age now. In general the product lifecycle, which Sony exemplified with the Walkman, is to:

  1. Release an early product in an early category, one that does the job but very expensive and primitive.
  2. Refine the product to be better faster cheaper, easily staying well ahead of competitors who are scrambling to introduce their first versions.
  3. Create upmarket (same price) and downmarket (cheaper) versions of the product to combat competitor products, that are competing largely on price and have low margins.
  4. Introduce a wide range of product choices (Colours, walkman sports) as the product moves to being fashion-led rather than technology-led. Competition is tough, so try to avoid fighting a feature war, but engage as you have to, and fight to maintain margin by locking consumers in somehow.
  5. Keep cutting costs and look to exit gracefully as the category is now very very low margin and declining volume. Look for the new category killers to take over or another category to disrupt.

In Apple terms, I see the classic iPod and iPod nanos are between categories 4 and 5 (Cheap, disrupted by iPhone and iPad), while the iPod touch and iPhone are moving from category 3 to 4 and the iPad from 2 to 3.

Apple have superb lock-in with the App-store, but sadly apps themselves are subject to a rapidly accelerated version of the product lifecycle process, and so Apple’s hold on the ecosystem could be a lot more fragile than it appears. In any event the content providers of music, movies are agnostic about which platform their work appears on, and the same is happening with apps.

About Lance Wiggs

@lancewiggs
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