Apple, a Love Note: The Power of an Ecosystem

by Jeff Dachis 27 Jan 2010 Blog Post

Getting Your Organization Social: Experience Management Blog

I love Apple products.

Apple makes beautiful, elegant, simple to use, powerful hardware and software/services.  This is obvious to almost anyone and yes, in case you were wondering or had a doubt, I am a biased unabashed Apple fan.  You can run whatever rig you want in our shop, but everyone is on a mac.  I have been using the products for years and will continue to do so as long as they make them.  My life is better, my work is easier and more productive because of Apple.

We will see yet another example of this in action with the release of some new Apple products.

As always, the Apple haters will pick apart the device and examine each component as if they were commodities and complain about the under-powered processor, or lack of battery life, or missing firewire port or choice of network partners or undersized storage…  They will complain bitterly that they don’t understand what the big deal is.  They will say the products are overpriced and that you can get them cheaper.  You can get the commodities cheaper, but herein lies the rub; its not about the commodities, its about how they are packaged and integrated into a much larger ecosystem of hardware, software, services, applications, developers, distribution, marketplaces and content.  In each of these areas, Apple doesn’t have to own every facet of the system, they just have to provide or facilitate value exchange.

We are about to see Apple place itself in the middle of several business ecosystems with its elegant hardware and software/services, and provide an easy to use experience for participators.  The funny thing is that many of those critics still don’t get it.  It’s not only about the elegant hardware or simple to use and understand software (based on Apple’s rock solid unix based OSX), it’s about Apple’s ability to insert itself into the middle of an industry or business ecosystem, innovate, and provide/extract enormous value —  which they do flawlessly.

Apple’s relatively frictionless marketplaces for value exchange provide an expanded business operating environment, different from any previously imagined. Especially in the business of digital.

Let’s take a look at what we get as users of Apple products and why the Apple ecosystems are hands down market leaders and will end up transforming the industries they touch.

Lets talk about content

Magazines and Newspapers

The Apple tablet will likely provide digital distribution and a seamless marketplace for the dying magazine and newspaper publishing businesses with a built in monetization model for subscriptions, pay per play, or advertiser supported consumption.  If the print organizations can get their cost basis down fast enough they may find a highly profitable global marketplace for short form literary content with a rich user experience delivered through the iPad.


Again, the Apple tablet will likely provide digital distribution and a seamless marketplace for touch or controller based games with a built in monetization model for subscriptions, pay per play, or advertiser supported consumption.  Moreover this industry is already well established and generates more revenue than all other entertainment media forms combined.  The iPad will provide an opportunity to bridge an app store model for more game developers to monetize their efforts with a seamless distribution and gameplay environment.


Apple will yet again provide digital distribution and a seamless marketplace for HD movie content and a built in monetization model for subscriptions, pay per play, or advertiser supported consumption wrapped in a beautiful and elegant movie delivery vehicle perfectly suited for portable viewing experiences.  As we’ve seen with the iPod and iPhone (where people said no one would be willing to watch movies on a tiny screen), the fact is that they will and they do by the millions with the new Apple tablet.


The Apple tablet is a perfect eReader.  It will provide a rich color reading experience combined with yet another seamless marketplace for digital books to be purchased and downloaded. I’m certain you will be able to sample some of the book content before purchasing and moreover I think, like the app store for developers, the Apple bookstore will provide a richer monetization model for authors while at the same time providing for a global distribution platform for existing publishers.


Apple is already the largest retailer of music on the planet.  They are also by far and away the largest seller of music players in the market.  While the music industry is still trying to protect the relics of its past, Apple has stepped in and figured out a way to sell more music to more people and expand the opportunities and options for music creators, sellers, and buyers…  I’d expect this to continue to be the case.

Photos, Video, and other personal content

The democratization of the tools of self expression will continue to expand the universe of content manifesting people’s creativity and ideas.  Apple provides the most easy to use suite of personal creation tools ever created.  More people document their lives, share memories with family, and utilize Apple’s tools to create, produce, edit, and share their personal experiences than ever before.
Getting Your Organization Social: Experience Management Blog

Lets talk about applications and marketplaces

The Apple tablet will, like its sister the iPhone, have a robust and expansive application development environment with a widely distributed and easy to use SDK (software development kit).  This has enabled literally thousands of developers to develop thousands of applications, thereby making the hardware exponentially more useful because of a committed and properly incented army of developers providing meaningful and useful applications and utility to go along with the rich array of content married to hardware and software.

The app store and iTunes enables a frictionless marketplace for developers and content providers to monetize their creations and the Apple tablet, iPhone, iPod, and iTouch platforms provide a rich deeply installed global distribution platform.

Lets talk about the supply chain

Apple has become a very efficient master of its supply chain and distribution.  Although core to the heart of the business, from online purchases and customer support forums to the Apple stores and genius bars, to chip and component manufacturers and assembly, to software development and release cycles across the software line, Apple’s ecosystem of supply chain and distribution is a core (but only one component) to its success. The supply chain is enabling the hardware and software component of the ecosystem to get product to market and enable the rest of the ecosystem to function.

Lets talk about the cloud

Don’t underestimate the importance of Mobileme, Apple’s cloud based storage, application, and synchronization environment.  This online service allows a person to access most basic apps from any PC or iPhone (soon to be Apple tablet) in the world including calendars, email, address book, photos, and what will certainly be other apps as they become available.  More than that, Mobileme allows for the seamless synchronization of all your Apple devices so that they all have the most updated versions of all of your information all of the time.  Mobileme is the glue that allows me to have my stuff anywhere I want it on any device I choose.

Its about the ecosystem

Any one of these components are somewhat interesting on their own, but only Apple brings them all together in a seamless, broad and far reaching environment that combines hardware, software, applications, services in the cloud, content and B2B and B2C marketplaces into one rich, elegant, useful, and valuable user experience ecosystem.

Without a doubt there are interesting product announcements on the way. Apple has always been loved for its products, but in today’s networked economy it’s Apple’s understanding and strategic use of an expanded ecosystem that will continue to drive its power in the marketplace and will allow it to dominate and transform the media and technology landscape as we know it.

Social technologies are enabling all companies to expand their ecosystems, listen and gain insight from a variety of new areas, and participate and engage with exponentially larger ecosystems of constituents with the potential to drive enormous value in countless new ways.  Let us know if your organization is ready to discuss how to approach harnessing the power of your ecosystem.
Getting Your Organization Social: Experience Management Blog

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  • Luke true, and yet it is amazing how few people are understanding this. Surely people recognise this after admitting that the phone application on the iphone is average at best…yet they still continue to break all mobile phone sales figures/forecasts…why, because the phone is not what the iphone is necessarily all about. It is about the ecosystem! It is about feeling connected and participatory in the ecosystem – and the iphone provides this in spades…the ipad also. But who will but the ipad..we believe this product will give Apple back its’ niche luxury tag…and when content sales are the real driver for your model, this is not a bad thing!!

  • Richard Scionti

    Brilliant analysis Jeff. I must admit, I considered myself a bit underwhelmed by the consumption-oriented functionality of this first gen iPad, but your post spins that perspective on its head. Yet another example that Apple is no longer competing with Microsoft…the new clash of the titans is obviously Apple -v- Google.

  • Lee Provoost

    I agree that the ecosystem will be the reason why the iPad will be a success and triumph over the Kindle. The only thing I’m curious about is the reading experience on the iPad. Reading on the Kindle is very soft and gentle to your eye (in contrast to reading for a long long time on a macbook or a iphone). I wonder whether Steve has an answer to that :)

  • Tom

    I remember your very early days an an apple fan, and looks as if your support has never waned, it took me longer to become a fan, but today I too love Apple. What’s missing on this Dachis Group site is a way to share this (and other) media with the social parts of the “ecosystem”. Where are the share links on DG’s site so readers can share out fellow your groups articles/blogs to constituents (friends).

    • Bryan Menell


      We have a Retweet button at the bottom of every story, but I assume you’re talking about more detailed “Share This” types of features. Which of the many do you prefer?