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Apple’s segmentation strategy, and the folly of conventional wisdom

90% of the app users are using iOS. Android hasn’t quite simple arrived. Mark Sigal tells the real story on why Apple earns the money and the other earns the market share. It should be mandotory reading in marketing! The extract is from this excellent post from O’Reilly Radar – Insight, analysis, and research about emerging by Mark Sigal. I site from the middle of the article:

The folly of conventional wisdom
Therein, lies the problem with conventional wisdom. Namely, that it’s conventional. It doesn’t think outside the box in terms of strategic imperatives, like building differentiation, growing margins or defensibility.
That explains why the top three mobile handset unit sales ‘leaders’ (Nokia, Samsung, LG) are outselling Apple in raw units an astounding 23.5 to 1, yet for all of that effort,combined they are garnering only 82 percent of Apple’s profit level.
Is it surprising, then, that the reward for achieving such distinguished leadership was for the CEOs at two of those companies (i.e., Nokia and LG) to get fired?
Let me net it out for you: Customers buy outcomes, they don’t buy attributes, and they certainly don’t pay a premium for it. Whether you love or hate Apple, recognize that they are an exemplar of this truth.


About mortjac

Norwegian social entrepreneur, blogger&Swift programmer. PM for the OMG GL standard. Using #ULab to give #Villajoyosa sustainable tourism&tunable pipe organs.


2 thoughts on “Apple’s segmentation strategy, and the folly of conventional wisdom

  1. I just posted this comment to Mike Sigal post in O'Reilly Radar:Brilliant!I've tried to explain the superacy of iOS to friends for years, just to see they goes and buy an Android phone, telling me it technologically superior. And I could cry for my friends, not being able to experience the dawn of "The Apps Lifestyle". Well they assure me the Android has enough, but when times goes, they are not using for neither twitter, facebook, google docs or whatever.So I'm trilled by your article. So express my thoughts and feeling regarding this matter much better than myself.I've a question for you however. In trying to clear my mind on what I choose to call the "touch-mobile-cloud", I'm writing a series on post on my blog at http://iaktta.nu. But now going to write the last post, including Apple TV, the touch-mobile-cloud doesn't fit. "Apps Lifestyle" is better, but it's not perfect. Be warned however, there are 9 earlier post, and only the last one which cover my passion accounting, may be up to your standard.So, I will be eagerly waiting for a discussion on you, on what we should call this new world of mobile IT based (90%) on iOS. I have your blogs in my newsfeed, so I just take the time and – wait ;)/mortjac

    Posted by Morten Jacobsen | October 1, 2010, 08:09
  2. There was a lot of comments on Sigal's post, so I just put a comment to them also:Paul Sweeting: Your notion "It's real genius has been its ability to reverse the normal commoditization dynamic." on songs, GSM and now trying on TV shows, are very clarifying.And reading the comments, well just half of them up to now, many of the talk about iTunes a central hub. I've thought about changing my MacBook to something more powerful, just to have iTunes working better. If that is a common behavior, then iTunes really drives the whole eco-system. Wow!

    Posted by Morten Jacobsen | October 1, 2010, 08:37

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