Apple's iStrategy - the "i"s have it

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Given the iPhone 4.0 launch there’s been a lot of talk among friends and colleagues about Apple’s iPhone strategy. At our last pancake party, one of my iHater friends insisted that Android’s success (and strategy) heralded the death knell of Apple in the smart phone market. In class last week, my students questioned Apple’s walled garden approach. Surely it had already failed spectacularly in the 20th Century, when Apple lost the computer wars against Microsoft. How could it sustain itself the 21st Century?
 
But the Apple garden of the 90s is not the garden of today. And iOS4 shows us clearly that Apple has learned its gardening lessons well.
 
Yes, the latest iPhone feature set is pretty fabulous: longer battery life, front-facing camera for video calls, high definition video, gyroscope, multitasking and more. All of these features add up to a super phone with real advances over its predecessors. But strategically, Apple’s most important feature upgrade is the repositioning of its operating system from iPhone OS to iOS 4. It’s not just for phones any more. It’s for the iPad, it’s for iPod, and it’s for iDevelopers.
 
By expanding the functionality of their OS, Apple increases the size of their iTunes ecosystem. More iProducts means more developers. More developers lead to more content and more users. More developers and more customers encourage Apple to create more iProducts. It’s a network effect in practice. Can any other phone manufacturer talk about their $1 Billion check to the development community? What about the 100 million iOS devices on which consumers use and buy content? This is Apple’s offensive and defensive weapon against Android and the pure mobile phone ecosystem.
 
Apple failed in the ‘90s when they lost the developer community. This time around, Apple has learned how to make money for content developers. And as long as Apple can provide incentives for the developer market, here at Bulldogmi, we’re betting their dominance will continue.

The i’s will have it, indeed.