I don't agree that there are plenty of technologies that can be rolled out at a moments notice. The issue is the bleeding edge ones are expensive and in very low demand. There are always substantial tradeoffs in battery, portability, network, and margin, among other things.
It takes substantial engineering to take a technology and make it useful, usable, and desirable to a broad enough range of the market that you can make money at it. There is little room for error today. Look at HP. Look at Blackberry.
Apple and Samsung make over 90% of the PROFITS in the mobile and tablet space. That in spite of the Android software being 'free' from Google. The reason quite simply is that the other handset and tablet companies don't have the scale or value proposition to make a profit. People aren't buying what they are selling in the volumes necessary. Today's landscape is less about 'products' and much more about 'products plus platforms' - very different than the PC days when you could sustain lots of innovation before we saw prices drop through the floor in the Windows world. Those platforms are being driven today by consumers spending their own money, not companies 'subsidizing' the platform by standardizing on it. Blackberry has lost 75% of their value in one year. That's solely because their product (and platform) became non-competitive, but they assumed the corporate customer would sustain them. With 'bring-your-own' options with many of those enterprise customers, consumers are adopting android or iphone rather than Blackberry. In the PC space, consolidation and standardization resulted in even the biggest companies like Dell and HP not being able to make money in the computer industry. The same is likely to happen in the mobile and soon the tablet space, only faster.
Apple (through supply chain mastery) truly does control the value chain. They will be the largest manufacturer of mobile chips - not just phones. They purchased PA Semi and license ARM technology and custom formulate their own A-series chips. They lock down volume with key new technologies like high resolution displays and block competitors. That takes massive investments. Over 300 stores take the experience (and preserve the channel margin) all the way to the consumer. They own the IP and architecture and have invested in the customer experience end-to-end. iTunes is about a $9B revenue business alone. That's just content that feeds the platform. This is about a platform plus product play. Amazon is the key contender that could make a play, because they are thinking about monetizing the content as a component of the platform. They don't report volumes or profits, so it's not clear how the strategy is playing out, but it is a potential model to success. Unfortunately, they are using the Android core, but not the user experience, as they chose to own the experience rather than give that over to Google. Sound familiar?
Google buys Motorola because they don't control the product play and thus the experience, and frankly have let the android customer experience fray. That's the reason they most recently rolled out Google Play - to try to aggregate all these separate content and tools initiatives in a unified experience. It remains to be seen if G + M equals a better product without all the other OEM's jumping to Microsoft because of perceived favoritism.
If you've read any articles or books on Apple, they are masterful at saying no. Strategy is about saying 'no' and few in the technology industry have figured that out. Apple will walk away from technologies (Remember floppies, CD's, Parallel ports, VGA Monitor ports, etc) and features that they consider 'old' or 'edge cases' to drive maximum volume and thus drive down their costs while also providing a consistent platform and tools to build upon it. No other company owns the value chain to that extent.
Is it a 'lock-in' strategy? Maybe, but I look at the value received for the price. On the day of the announcement of the new iPads, EVERY iPad ever sold could upgrade to new features. Some were hardware constrained like Siri voice recognition. But they engineered the platform and removed the carriers from the upgrade equation. Most tablets today won't see Android 4 till later this year, and that was LAST YEAR'S upgrade. One could argue Apple is more 'open' to enabling me to keep up with new OS features than any of the carrier controlled Android handsets. In reality, the carrier's like it that way. THEY want to control the experience and 'lock you in.' Before iPhone, remember all the crap they'd install in the home screen and the closed nature of what they would allow?
If someone wants to buy an alternative tablet or phone than Apple, go for it. But I don't think you can 'blame' Apple for being smarter than the rest of the industry. And they have the business model, financials, customer loyalty, and product profile to back it up.
neil
