How does a competitor defeat an industry leader? Simple. But not easy. Since Apple seems intent on charting its own course a competitor has to do what Apple does– but better. Or, do what Apple does and be much less expensive.
Let me explain.
Apple has many products, many retail stores and outlets, 1.5-billion products in the wild, more than a billion customers, and money in the bank. How would a competitor– and Apple has many– defeat the company in any given product segment?
There are two basic methods that can be employed to defeat an Apple product, but combined, even Apple itself could fall on the rocks.
Let’s take Apple Watch as the example, but any product would suffice. Method one is to create a product that competes with Watch; feature for feature, function for function. Watch Series 4 starts at $399, so if the competitor’s watch knockoff had all the same capabilities how should it be priced?
No, because that does not create an incentive for Apple Watch customers to switch or move away from the so-called walled garden ecosystem.
How about all the same capabilities for half the price at $199? Assuming the quality was the same, and the functionality matched Apple Watch, it’s likely the Watch competitor might succeed in the marketplace; perhaps with marketshare, but not likely profitshare, definitely not revenue share.
After all, there may be a very good reason– math– that competitors do not have all the same functionality built into their Watch versions at half the price.
Method two is to do what Watch does but better. Far better. Improvements in every aspect; display, battery life, connectivity, application selection, health options, etc. In other words, to do to Watch what iPhone did to the smartphone industry back in the day. iPhone was a far better user experience so customers switched from smartphone whatever to iPhone.
A Watch competitor that comes along with such functionality and capability that far exceed’s Apple’s version can price it higher, right? Wrong. Perhaps the same as Watch; certainly near Watch’s price tag, but price, as always, remains an issue so an improved competitor still has to compete with Watch on price.
The best way to defeat Apple by product, products, or ecosystem is to do what Apple does. Better products which integrate well, offer more privacy and security, and have 500 or so physical stores where service and support are available.
Do you see any competitor doing that?
Not Google, not Samsung, not Microsoft, not any of the Chinese knockoff manufacturers. Apple sits alone. To defeat Apple requires competitors to do what Apple does. Only better.
That’s no mean feat.