In 2001 Apple launched what would be one of the most iconic products of the 21st century's first decade. The iPod changed music and consumer electronics – but it also led to one of the most counterintuitive marketing strategies of the modern age as well. As the iPod grew in popularity, Apple began to sell $1000 computers as accessories for a $200 gadget. The ecosystem of the iTunes store and the ability to manage your music easily and seamlessly with your iPod started a revolution that led millions to consider (or reconsider) getting a Mac as their primary home computer. By locking customers into their ecosystem (and shutting other brands out) – Apple grew using a basic strategy of cross-selling to get customers to buy multiple devices and making sure that they all worked easily together.
Aside from a few minor examples like synched remote controls between televisions and DVD players or shared external memory card platforms (like SD or Sony's MemoryStick), the rest of the consumer electronics industry was very slow to realize the value of this strategy. As a result – buying gadgets became a very individualized experience. It simply didn't matter that much whether you stuck with one brand for all your gadgets or not. If there was one theme to emerge clearly from CES this year, it is that those days are over.
Nearly every manufacturer of large scale consumer products is investing in the value of selling an ecosystem instead of a single product. LG, Sony and SHARP all have launched their own App stores for mobile devices and (now) smart connected televisions as well. The early leader, Sony's Qriocity, features a large content archive and integrates both music and video together. LG's smart home appliances can be accessed through multiple other devices.
Samsung's latest wirelessly enabled digital camera, called the Samsung SH100 can also be synchronized with the Samsung Galaxy smartphone and then operated remotely by the phone as a remote control. The vision for more and more of these products is to make them work together at the touch of a button and finally demonstrate a real value for consumers to motivate them to choose to stay with a single brand for multiple purchases.
This is the locked in world we are headed for – where brand name will do more than just reinforce consumer confidence in the product. The brand will be the ecosystem that consumers buy into, just as they have for years with Apple. Most likely it will work for consumer electronics, and we are already seeing other industry segments start to follow. Financial services organizations want to lock you into banking, credit cards and mortgages. GE wants your home lighting and security to work with your home appliances.
In this new future, the brand you choose will determine the products you consider buying. The barrier to switch will be the inconvenience of having a device that no longer fits the ecosystem of your life.
Rohit, thanks. Nice observation. Completely agree, though I think Apple are doing to devices and services what MS did for OS and Office suite some time ago. Think you’re on the money though.
~S
I’m not sure what worked for Apple, supported by an egregious marketing dept. and almost porn-like attention to design aesthetics, will work for other brands.
Sony, for instance, is ages that is trying to do the ame thing, with very little success. And the very same Apple is (slowly) trying to move on as the tactic (because of tactic much more than strategy we are talking here) is proving to be quite counter-effective.
It’s funny, also, how in a sense Apple’s walled garden approach has been sold (too easily to ‘professional’ alike as well) as a masterpiece of user experience: limiting the design/features to a limited (over-controlled) set of devices is a shortcut to a better experience only because of the hyper restricted range of options/variables.
Just like the whole apps thing (as opposed to the ‘open web’ in its broadest sense), this approach is not only an evident proof of the cheap ‘release often, release the latest piece of over hyped crap’ – the result of the management’s lack of vision and the very poor quality of designers and creative, but it’s also a extremely dangerous poor experience for users, doomed to trash a full lot of useless gadget every time they change their content habits.
This is simply pointless consumerism at its worst. Are these the 80s, or something?
I think they learned many like touch screens and Open source OS. 🙂
I hate to be somewhat of the discordant note here, but I think instead of the brand, the power will reside in the aggregators. The organization that is able to combine different types of contents and therefore brands will be the winner. I think Apple not only made the environment easy to understand and apply to any lifestyle, it also made it cheap (remember how you feel every time you see an app that sells for $14.99). Am I right, or am I missing the point? See you soon Rohit! ~Paul
Nice observation.
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yeah to an extent indeed is good for a consumer and common person as to make the better and best use of technology and Sam sung is far closer to the masses due to its durable products and accessorize that it sales out.
I honestly wish the consumer electronics companies would focus more on producing a quality, more durable product than on making sure their products are only compatible within their own brand. It seems as though more consumer electronics companies care about selling the latest products, but build it not to last more than a couple years so their customers will come back to buy a replacement a year or two later. If they focused instead on making the best product out there, then the consumers and the consumer loyalty would follow.
With the current economy, I am sure more consumers, me included, are trying to save more and spend more wisely. I prefer not to have my choices taken from me and be locked into just one brand, but I will gladly stick to a specific brand if their products are of lasting quality.
To Tracy’s point, have a look at http://www.storyofstuff.com, specifically the part referring to perceived and manufactured obsolescence. There were studies done on the life span / quality of a product vrs consumer loyalty. They have this down to a science and it is one method of building an economy. Frankly, if it stops working in a reasonable time frame, or if something better comes out the buying public is more than happy to purchase the same item again. I would prefer to buy things only once but this is not how the world tends to act.
True. I would like to see this strategy used in other industries as well. Such as clothes or even cars.