Apple Competitor Creating Disruptive Innovation as an

¶ … Apple Competitor Creating Disruptive Innovation as an Apple Competitor Apple continues to create an entirely new level of disruptive innovation in the areas of MP3, smartphone and tablet PCs by continually fueling new ecosystems of musical and video content while revolutionizing the hardware experience. The continual evolution of the iPad is today re-ordering the structure of the PC market and with it, enterprise computing (Apple Investor Relations, 2012).

Just as the iPod and iPhone are revolutionizing music delivery it is feasible to assume that that iPad and follow-on tablet PCs will also bring the same level of rapid change into enterprise computing. Apple has redefined the concept of the platform as the competitive force in stable and emerging, high growth markets (Deck, 1997). This focus on ecosystem-driven profitability however is ripe for disruptive innovation at the individual customer experience and device level.

The intent of this analysis is to look at how a more powerful customer experience strategy at the device level can reorder the table PC market, using the Porter Five Forces Model as the frame of reference for this transformation (Porter, 2008). Ecosystems Aren't Enough Anymore Apple, as of this writing in December 2012, faces a multitude of threats. Their operating systems are under attack from Google and the Android operating system.

The Apple iTunes ecosystem, which at one time generated nearly 30% of all profits for the company is increasingly under attack from free services including Spotify that have very unique, all-you-can-listen-to business models that are making iTunes outdated and expensive (Apple Investor Relations, 2012). iTunes did revolutionize music and video distribution and also showed that scalability across devices could be accomplished relatively quickly from a platform standpoint as well (Deck, 1997).

Figure 1, Apple Product and Services Ecosystem, taken from a filing the company made with the Securities and Exchange Commission (SEC) highlights how the iTunes ecosystem works (Apple Investor Relations, 2012). Figure 1: Apple Product and Services Ecosystem Source: (Apple Investor Relations, 2012) Creating a Device That Delivers An Experience By Anticipating Content Interests What's still lacking in the Apple product line and design philosophy that allows for radical personalization and customization.

Apple has not allowed customers to create their own unique iPad designs as the company has adhered to such a strict approach to defining standardization throughout their supply chain, procurement and manufacturing processes (Cusumano, 2008). Apple is willing to forego entrance into higher growth, and potentially higher gross margin areas of the market by concentrating on standardization (Apple Investor Relations, 2012). This strategy has served them well as they continue to seek out opportunities for cost reduction throughout their supply chains, and more specifically intensive supplier qualification strategies and programs (Cusumano, 2008).

Clearly there are much greater potential areas of profitability for the company that their business models will not allow them to reach out and gain sales within. Taking a strategic view of the Tablet PC market it is evident that there is significant upside potential for a customized tablet PC, complete with an operating system that allows for real-time sharing of contacts, all forms of content (video and digital) and greater support for multiple roles being supported on the same device.

A Porter Five Forces Model has been constructed of the Tablet PC market and it is shown in Figure 2. The gaps in the market based on this analysis are primarily in the area of collaboration and multi-role-based uses of tablet PCs. There are no structural elements of the Apple operating system or architecture to allow for this level of customization.

Figure 2: Five Forces of Tablet PCs Sources: Based on the Porter Five Forces Model (Porter, 1986) Conclusion Apple will continue to experience significant headwinds in their markets they are competing in today. Competitors taking a more focused approach on collaboration and.