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Why Apple Is So Sticky

Hugh Pickens writes "'Sticky,' in the social sciences and particularly economics, describes a situation in which a variable is resistant to change. For websites or products it usually means that visitors or customers keep coming back for more. Now Fortune Magazine reports on an analysis by Deutsche Bank's Chris Whitmore on what makes the (iTunes-based) iPhone-iPod-iPad platform so sticky and why it's going to get harder, not easier, for Apple users to switch, no matter what Google and the rest of Apple's competitors have up their sleeves. Whitmore says the investment Apple's customers have made in content for those devices in terms of apps, videos, and music purchased at the iTunes Store creates Apple's 'stickiness.' Apple has an installed base today of about 150 million iTunes-dependent devices that could grow to more than 200 million by the end of 2011. Whitmore comes up with a cumulative investment in those devices of about $15 billion today, growing to $25 billion by the end of next year. 'This averages to ~$100 of content for each installed device,' Whitmore writes, 'suggesting switching costs are relatively high (not to mention the time required to port). When Apple's best-in-class user experience is combined with these growing switching costs, the resulting customer loyalty is unparalleled.'"

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  1. Re:What "sticky" really means by Anonymous Coward · · Score: 5, Informative

    The term "lock in" apparently has had its definition changed much as "brick" has already.

    How in the world is anyone "locked in" to an iPod?

    Had you bothered to read the OP or the article, you would have some idea how.

    But as to why the parent got modded up, it's because "vendor lock-in" is a well-known phenomenon in the field of economics and it is exactly what the author is describing when using the word "sticky."

    Stickiness does not mean what he's using it to mean. Stickiness is a measure of inertia or lag between an event and the resulting inevitable reaction in the affected group. Vendor lock-in is what happens when businesses exert market-power to prevent "churn" such as when they artificially raise the cost of switching away from their products and services.

    Apple has done this in myriad ways, not the least of which include their selection of compatible file-formats, DRM and their developer agreement which prohibits the use of cross-platform development tools, together keeping competitors from offering attractive full-featured media-players and from having the same apps in their app stores.

    Vendor lock-in is the appropriate description for the phenomenon at issue.

    http://en.wikipedia.org/wiki/Vendor_lock_in