Last Thursday, Apple launched the Mac App Store, an application / software store for the company’s Macintosh computers that brings Mac software developers together with Mac OS X users in an experience that mirrors the company’s iTunes App Store for iPhone, iPad, and iPod.
The Mac App Store is another platform for Apple whereby the company plays the role of provider to bring entities together. At the current time, this encompasses customers and developers. The Mac App Store is simply an extension of Apple’s overarching platform strategy. Over the past decade, Apple has made the shift from a hardware and software company to a platform company. This transformation accelerated in 2007 when the company launched iPhone and iPhone OS. I won’t discount the fact that they sell hardware and software but these are now utilized by the company to bring users onto the various platforms. Apple’s internal activities and culture work to support the platform strategy across the various departments, and customer contact points.
A Multi-platform provider
At a basic level of analysis, Apple is a multi-platform provider that designs and sells hardware to support the following platforms:
Digging deeper we can see that Apple has begun to systematically merge these platforms into a comprehensive Apple platform / ecosystem. I expect that this unification strategy will continue to take shape with iTunes continuing to play a key role. As you can see above, iTunes exists on every one of listed platforms.
iTunes – a key to the Apple platform strategy
Apple’s shift away from a hardware and software company to a platform company started with iTunes. If you ever watched an Apple keynote you would have been keen to focus in on a metric that Apple executives routinely tout when they discuss iTunes, the number of accounts with credit cards. As of September 2010, this number stood at 160 million. Why does Apple tout this metric? It’s a signal, plain and simple. Apple is sending a signal to the platform participants, consumers, developers, and advertisers about the size of the consumer “side”. If you’re a consumer, you’ll interpret this number as a measure of the platform’s popularity. A higher number will encourage those without an iTunes account to join because friends and family have accounts. Conversely, by knowing the size of the consumer side, developers and advertisers interpret their reach potential – more consumer accounts translates to a higher probability of sales. It also signals to non-consumer users that the platform is the ‘place to be’ which encourages more to developers and advertisers join. Apple also touts the number of apps with a similar signaling objective.
The platform essentially feeds on itself such that overall platform growth is driven by the growth in the various user types. It’s network effects – a process by which the value of the network is dependent on the number of users across the network. Same side and cross side network effects are at play.
There you have it, Apple is a platform company that happens to sell hardware and software.
Anyone care to offer some predictions as to how this strategy projects out?
Webkit is another platform, although an open one.
@michael,
You’re correct, Webkit is another platform but in my view, it differs from the ones I mentioned in that it is one-sided. It’s a platform specific to developers.
The x-factor for apple was always the design they created. But I guess after growing from a chimpanzee into a gorillla they have to move being a platform provider.