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Apple’s Dominant Strategy

Apple recently announced the latest iteration on it’s iPhone, the iPhone 5. Reactions to the news has been mixed, but there is a general sense that the new device is in many ways much better than the previous version, but it is in no way revolutionary. The new phone makes many improvements over its previous version, such as a larger screen and faster processor, but no radical changes have been made to the phone or its core identity or functionality.

One can look at this in the overall context of the mobile device market and the players that are involved there.  We can think of this as a game with players such as Google and Samsung, Microsoft and Nokia, and many others, each with their own continuous spectra of strategies that they could employ. In Apple’s case they had a range of choices in how to design their next iPhone, ranging from a milder, safer approach that involves making improvements to the previous iteration and bumping up the specs, to completely redesigning the device, introducing unknown and unseen technologies, and bringing a radically different product to market. Other firms in the market face similar choices, and since they are fighting to gain ground in the mobile market share, they are most likely going to be releasing new and innovative products that push the envelope, in order to try and draw customers and loosen Apple’s grip on the market.  If Apple decided to completely redesign the iPhone a midst all of this competition and their new device did not stack up on some levels with competitors, or was too different for loyal Apple fans, they could lose a large portion of their market share to other companies. However, with its pre-established and solid fan base, Apple knew that if they delivered a reliable product that their customers have come to expect, and upgraded it in several ways, which many have been waiting for, that many consumers will opt for the Apple product, since it’s something that they’ve come to know and rely on.

And so we could think of this strategy of releasing an upgraded version instead of re-envisioning the product as the dominant strategy for Apple in this game of trying to control the mobile device market, since regardless of what competitors do, they’ll certainly turn a profit from it.

Source: http://www.theverge.com/2012/9/13/3323082/iphone-5-predictable-73-degrees-sunny/in/3085609

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