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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.'"
Why is Slashdot so stuck on Apple?
Apple's continued success is mostly due to the fact that it all just works. Why would your average Joe Sixpack and his Mom want to switch to another product that is potentially harder to use? It's the Apple / iTunes ecosystem that is a major drawcard for your average consumer. iTunes being a one stop shop for Music / Apps / Updates / Synching etc
pretty much plays unprotected AACs, so there's no lock in there. As far as apps, many are used for a couple weeks and then forgotten or deleted. There may be a psychological lock in when looking at 100 apps, but in reality only a handful are used. At the iPad level, there are bigger and more useful apps which could be more of a lock-in factor, but there isn't much lock-in at the iPod and iPhone level. Hell, there will probably be a dozen comments in this story about slashdotters who switched from an iPhone to android.
Do you even lift?
These aren't the 'roids you're looking for.
Sounds like, at least in Apple's case, "sticky" is just another word for "vendor lockin"
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.'
Wow, it's almost like Windows where the thousands of dollars worth of Windows software I own are the only thing keeping me stuck to having a Windows PC in the house.
Let's talk about applications only. Sure the average user may have purchased $100 worth of software, but how much of it do they actually use day to day? I think, just like a computer platform, that the cost of switching is lower than it would seem because most software does not need to be replaced, so the cost is lower than it would seem from simply examining purchase prices for everything you own.
Now throw in media... songs are pretty much sold DRM free these days, so there is no cost to migrate media. Video is tricker since through iTunes it is wrapped in DRM. But I wonder apart from children's video, how much video purchased online is really there to be watched again and again - I buy a lot of video online but after I watch it, I generally don't watch it more than once. I "buy" it knowing full well it's really more like a rental, and if I really like a video I'll buy it on physical media that I can load out or keep as long as I want.
There is something to the argument they make, I just don't think it's as strong on the value side as they make it out to be.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
... in that people are stuck with DOS/Windows/Office because the cost to switch away are too great.
OS X only exists to make people want to buy Apple hardware. Allowing OS X on commodity hardware would dilute their brand and suck buyers away from what they're actually trying to sell.
I know many people with Iphones, Ipads and Ipods, nearly all of them love the devices but hate Itunes, using it as the only option available to them. Several of my more computer literate friends are unhappy with the restrictions thier Ipods place on them regarding PC transfer rights and lack of backup options for their content, but most never even consider what would happen if their device failed and won't until it does...
errr....umm...*whooosh* *whoosh* Is this thing on ?
Your line of reasoning is seriously flawed.
Most of the apps in the App stores are priced at almost rental levels - with the benefit of having no time limit. If you can't afford a few dollars for a productive or utilitarian app, or even a few dollars for a few weeks of gaming fun before you're bored of the game, then owning a smartphone is probably not for you.
Most people don't buy hundreds of random useless apps, they buy things that they feel are worthwhile. And since most people don't change their phone/OS every six months, it's not an issue. Also, your stubbornness assumes that these apps are never going to become obsolete, and that you'd otherwise never consider upgrading to another app with improved functionality (or looking for new games that are new and interesting).
These are the kind of people who allow their self-worth to be determined by others; their cool-factor by how many Facebook friends they have, and what parties they are/not invited to.
They have convinced themselves of a form of technical superiority, when in reality, their platform is too small to be noticed by virus\malware providers, or most productivity app venders save a few like Adobe.
They consider themselves "Counter-culture" when in reality, they are the worst kind of lemmings.
Just watch next year, as hundreds of thousands of them toss their iPad for another one, because it will have a camera, and once again in a few years, for another feature that should have been in v1.0.
Does Apple have good technology? Sure. Is it beyond what anyone else could do? Never has been.
Can they market their platform beyond all common fucking sense to people seeking validation through faddish participation? Fuckin A!
Wanna see an Apple user's head explode? Ask them if their device supports IPv6, and watch them strain to answer without giving away that they dont know what the fuck you are talking about.
I reject this statement because it is fundamentally not true.
Case in point, the iTunes interface is not intuitive and neither are many of the features.
For novice users, I reject that any solution that is based around files (which I know you would prefer and sounds like what you are using) is easier for non-technical users to understand than the way iTunes works. You stated that you saw novice users confused by iTunes, but they got over it. Well I have seen a lot of novice users that never get over the confusion of how to deal with files.
iTunes "just works" for most users despite being somewhat nonintuitive, because the other solutions are either more clunky to set up or less intuitive still.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Well, I'm really glad I don't have your job if the typical app price is so important to you. For the price of a movie, you could buy one or two professional apps that will probably give you more time of use each and at more convenient times before you change your phone. So maybe, you're the type of person that never goes to the movie theater because you'll eventually pick up the DVD for a dollar several years later, goes out to eat at a restaurant because you can cook food at home, or buys an espresso from a coffee shop (which is more than your typical app price these days), but most people aren't. Nobody is going to disagree with saving money, however the scale of savings you are talking about is pretty bizarre to most people I suspect. Given the typical $/hrs of use, I suspect that the price of apps you'd have to replace with a new phone compared to normal things in daily life most people do is trivial and buried in the noise of the cost of things like change put in tip jars.
I've been saying for a while that the iPhone is no longer a "premium" brand. High school kids have them. If $100 is "relatively high", then those iPhone customers are not what Apple makes them out to be, especially when amortized over the cost of a 3-year phone plan - $100 is less than $3 a month. Less than $0.10 a day. How much cheaper can you get? Are iPhone customers reduced to saying "Buddy, can you spare a dime?"
Lock In = iTunes AAC w/FairPlay DRM
Sticky = I don't want to figure out how to migrate my iTunes mp3's to Windows Media Player
Lock In = Outlook Encrypted PST files.
Sticky = I don't want to figure out how to get my e-mail archive transferred from Hotmail to Mac Mail.
Lock In mean you can't get your own data out because it is wrapped in something proprietary. Sticky means you can, but it isn't worth your time and effort.
Apple increases sticky by making it work across multiple devices. My music "just appears" on my computer, ipod and iPhone. Switching all three means migrating my songs to a new desktop os, a new phone os and a new media player with possibly thee new interfaces. That's a powerful incentive to not migrate.
that's typical behavior for apple -- making it expensive and inconvenient to switch. even in the 80s and '90s apple was notorious not only for that kind behavior and but also for doing what some call 'planned obscelenscence[sp]'. specifically, every year it seemed like, they redesigned their pcs with new architecutre, giving them new hardware that was imcompatible with the previous year's equipment--- maknig upgrading and modifying them imposible.
Thats stupid, people have used floppy disks.
Yes, and people put eery file on that floppy disk in the root directory. They had a physical device with them that they knew had all their stuff.
These days people COULD do that with a USB drive, but generally they do not. They keep it all in the Desktop, or if they are particularly savvy they MIGHT put some data in the system supplied Documents directory.
Before, you were saving files to one place (the disk) instead of migrating them across several...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
So Slashdot historically loves Apple. Reason is twofold:
1) Apple is a historic underdog and Slashdot likes underdogs. They were the small guys fighting the evil that is MS, and Slashdot REALLY hates MS. As such they like Apple, or at least what Apple was.
2) Apple provides an easy to use alternative to Windows with some UNIX underpinnings. While many are loathe to admit it, Linux is a PITA for many desktop uses. Some of the people who use(d) it do so out of anti-MS zealotry and/or a UNIX superiority complex. Well, Apple offers an OS you can pretend is UNIX (even though that is just a minor foundation) that is easy to use and not MS. So, it is the sort of thing many /.ers like.
However, Apple is, and nearly always has been, a company far more controlling than MS. They want to dictate everything about your computer usage. They want you to have to buy hardware from them, in the configurations they specify only. They want you to use only their OS. They want to control where you get your applications and media, they want to tell you when to upgrade, etc.
This is, of course, counter to what Slashdot likes. However it was something that wasn't that apparent, nor that onerous back when Apple was the little guy. However as Apple has grown, it has become more and more obvious that their vision of the future of technology is one where they run everything.
So because of these two things, you see a lot of Apple stories, and a lot of stories on their lock in strategies. Don't expect it to change any time soon as Apple isn't likely going anywhere and the combination of love/hate will continue here.
This just in: "Vendor lock-in makes it harder to switch to a competitor's products!"
Wow!!!! Story at 10!!!
My bicyles
The reason Apple is doing so well is that they turn out devices that suit the people's needs and are well-designed and reliable. This marketing bullshit about how Apple has some "secret sauce" is just nonsense promoted by those who can't research the stories they write - or those who want to turn out the same old junk and think they should be competitive just because they showed up.
The so-called competitors have been shown up for what they really are and they're squealing. Ever use a Motorola phone? How did you like their excuse for a user interface? Or have you ever used a Blackberry? How many times a week do you have to pull the battery to reboot it? Even the newer Droid phones - great concept, but they leave a lot to be desired in the execution. And that's just the cell phones.
How about tablets? I've used a HP TX series tablet and after that I bought an iPad. There's lots of noise from vaporware vendors but anything like competition for the iPad is nowhere in sight. At least HP looked at the way things are and killed their Windows tablet - they'll bring it out running Web/OS sometime in the future. Probably it'll be delivered by virgins riding unicorns.
Creating and building fully developed and well rounded products isn't a trivial task - Apple spent a lot of time and money making their iThingies good. For those companies who want to compete with Apple on this ground - they're going to have to get rid of their "good enough" mentality and create great products. And even then, they'll be months or years behind Apple. This isn't wrong or unfair; when all the geeks were kicking Apple while they were down, they had some good stuff brewing in the labs. Now that it's out on the street it's a different day and a different game.
I'm hoping that other corporations will be impelled to improve their game and actually compete with Apple. That would be good for everyone - but until they can compete in the market, the promotional BS is nothing more than vapor that isn't worth listening to.