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NETWORK EFFECT IN APPLE

Apple is the most valuable company in the world, network effects play a major role in the recent growth of Apple. Increasing in usage of Apple’s products lead to direct increase in the value of Apple’s products. Direct network effects have been created in Apple’s IOS environment by services such as iMessage, Facetime, and Game Center. These services makes more valuable as more users adopt them. While increasing the owners of Apple products, the value of developers of App will increase. More developer will enter the App store market and develop more available Apps for users, this create more value for the owners of Apple products.

The App Store is a 2-Sided Market

Buying more Apple products also add more value to existing Apple devices because of sharing data between various devices. Apple provides Airplay and ICloud to share data between devices, and users can sync their data across multiple devices through Airplay and ICloud. That means saving document on Ipad will be synced automatically to Iphone. If people own more Apple products, then each product will be more valuable.

http://www.marktalbot.ca/2012/03/05/the-three-types-of-network-effects-driving-apples-sales/

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