In addition, the traditional iPod platform is being scaled back as the benefits this platform provides consumers can be found in all other platforms, often accentuated with other forms of digital content as well, from e-books and published materials to movies, television shows and other forms of video content.
Market Analysis
The future of Apple's profitability is entirely based on the success of their iPhone and iPad investments and the transformation of their business model away from just hardware to digital content ecosystems capable of generating significant gross margin (Snell, 2011). Investment and industry analysts have often shown through analysis that their supply chain is capable of keeping up with a much more aggressive timeline of new product development and launch (Prudential Equity Group LLC, 2006). Apple is scaling its product strategy towards video content as the center of their iTunes ecosystems, and has been monitoring this for nearly six years, as Figure 2 below illustrates. During the Apple iPod product planning cycles, Apple made a conscious decision to embrace the idea of having platforms capable of displaying video so well customers would be willing to pay extra for higher definition movies and shows (Reppel, Szmigin, Gruber, 2006). Now nearly six years later, this strategy is becoming a highly profitable area of their product mix.
Figure...
As an analysis of the company's previous experiences in hardware platforms, ranging from the very successful Apple II to the ill-fated Lisa, the one highly reliance predictor of success or failure is the ability to attract developers to write software to make the most use of these systems (Mitchell, 2010).
Differentiation today and in the future for Apple will be entirely dependent on their ability to continually attract and motivate independent software vendors (ISVs) to fully support the core features of their platforms and also participate in the process of helping define new software-based features (Mitchell, 2010). For Apple, they really have no choice but to concentrate on this strategy going forward. They must find differentiation at the platform and more specifically, operating system level if they are to succeed as they have already attracted competitors imitating their hardware platforms including the Google Android operating system (Proffitt, 2011). Analysis of their standard costs based on their released financial
