If you’ve read PixoBebo more than a few times then you know I stick to the basics. Product Marketing 101 states that differentiation is key to a product’s success. If a company has a new product that they want to compete against an entrenched industry leader, certain steps must be taken.
First, the product must have at least a similar feature set with equal functionality to the industry leader, but, to create a compelling reason for the competition’s customers to switch, probably needs to be priced less.
Second, if the product has an improved feature set with better functionality than the industry leader, the product probably needs to be priced competitive with the leader, otherwise, again, there’s little incentive for customers to switch.
So, differentiation is key, whether in functionality, feature set, or price.
How does Apple differentiate key products (Mac, iPhone, iPad) from competitors? It’s actually quite simple.
All personal computers have certain similar components. Screen, battery, CPU, keyboard, case, operating system and applications. Besides OS X, recent Macs have Retina displays seldom found on PC notebooks, and up to 12-hour battery life.
Tablets are a different, even more competitive market, with many of Apple’s competitors slashing prices on new products simply to move inventory. Meanwhile, Apple’s iPad sports long battery life, a Retina display, and many tens of thousands of tablet-specific apps which competitors just don’t have.
Smartphones are also different, yet the math applies. Android-based smartphones are a dime a dozen, with most manufacturers losing money. Apple’s approach has been to differentiate by case design, screen resolution, battery life, CPU and graphics capability, application library, and ease of use of iOS.
Indeed, 30-percent of the iPhones sold this year come from the two-year-old iPhone 4S, which indicates customers are willing to pay for higher quality, older Apple devices which still run the latest iOS version and apps.
Going forward, where does Apple continue to differentiate? The elements are simple and run across the line of products–Mac, iPhone, iPad. Longer battery life. Higher screen resolution. Improved hardware. Better camera. iOS and OS X. And the large library of applications.
As long as Apple can continue to innovate, continue to iterate improvements, and differentiate the Apple experience from competitors, the company will succeed. It’s math.