However the lack of stability in these partnerships is a major weakness for the company today. In 2008, Apple released the following graphic illustrating just how pervasive they believed video-based devices would be, which clearly makes the value of digital content providers critical to their future business model.
Market Assessment of Video-Capable iPods
source: (Apple Investor Relations, 2008).
Implementation: Apple will need to work closely with their research and development team to see what Apple is bringing to the table. Despite the success of the iPod and the iPhone, Apple should continue making products that are familiar to the customer but more user friendly. By doing so Apple can offer their customers products at a lower cost. In addition, Apple can also cut costs by using outsourced research and development teams.
Implementing a competitively featured product relevant to Apple then needs to take into account a business model that reflects the needs of digital content partners and their differentiation while also factoring in how unique and distinctive Apple's customer base is as well. The following graphic provides insights into their customer base and its unique attributes.
Source: (Cuneo, 2003)
The implementation of any series of competitive products must take into account these attributes and seek to create them...
Specifically focusing on innovativeness and communicativeness of the proposed products, along with showing how digital content's value can be retained over time is critical for establishing and sustaining differentiation. This can be accomplished by having a broader structure than the Apple iTunes ecosystem, getting away from the proprietary nature of how music and digital content is distributed by Apple today and making a more open architecture for anyone to use music or digital content on any device.
Ramification
The ramifications of creating a more equitable partner ecosystem that respect the needs and profit requirements of digital content providers will serve to create greater differentiation faster than products (Berling, 1993). Apple's innovation has been driven at the product level, yet they are faltering in the areas of partnerships (Abel, 2008). What is needed are products that compete with Apple at a functional level yet have a more open architecture that allows content providers to retain their margins and profitability.
Evaluation
In evaluating the performance of the differentiation strategy the metrics associated with content use and transfers which Apple relies on heavily (Casadesus-Masanell, Hervas-Drane, 2010) need to be added to with profit per partner as well. Only then, will an open
