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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.'"
In general geeks like to beat up on some large incorporeal entity that a segment of the community will defend to the death. Microsoft just isn't all that fun to kick around anymore, since the only people who still care about Windows are CTO's and those of us unfortunate enough to work in the dark section of IT known as Help Desk. Apple has become a juggernaut of shiny devices that sell to a large segment of the population that would have never even considered buying a Mac. An even smaller percentage of that give a crap about "lock-in" or other political stances. OS X geeks are a small and defensive breed, and they feel that these devices, ostensibly still computers, are an extension of their ecosystem. They're not, and they are a gateway drug for some. They were for me, but the large chunk of the iPhone and iPod populace doesn't care, and whenever the new must have gadget comes around, they'll move on. Previous generations re-bought their entire collections in several different mediums, this one will be no different. Lock in sucks, and hopefully video vendors come around on DRM, but I think streaming on demand will leapfrog them anyway. So the Apple fans will defend Steve Jobs unique vision as if it was their own, and the geeks will beat this topic to death until there something else that people love to bitch about on the Internet. It isn't principled, it's pointless. En mass much of the ecosystem has turned from Redmond Bad Cupertino Good to Curpertino Bad, Mountain View Good. That will last until some new hip kid on the block becomes the Geek chic and we will then decry Google's constant assault on our privacy. Here's to waiting until Cannonical is the bad guy.
Apple owner here. You have identified a sizable segment of the mac ownership demographic. The demographic that buys apple shit because "apple is cool and I want to buy cool" These people are known as "Mactards"
However there are two other sizable segments.
1) The segment that thinks that Apple is easier and "just works" when compared to Windows. They dont want to fuck about with their PC. (I disagree with these people because Windows7 "just works" too)
2) The segment that thinks that Apple is easier and "just works" when compared to Linux. They dont want to fuck about with configuration files and rc scripts anymore. I fall into this segment. I demand a usable and strong command line with all the proper *nix utilities, but I want a strong windowing system and dont ever want to fuck about with video card drivers ever again.
The apple gui/desktop is superior to kde/gnome/X... not all of us bought apple because apple is cool, some of us bought it while waiting for linux to become more polished.
The market also feels the fortune 50 company I work at is worth less than our inventory on hand. It's not like we're in a dying industry, we're in health care. If you bought all of our stock, then you'd make your money back with three years of profits (based on history). If you bought all of Apple's stock, it would be 30 years (once again, based on history) before you made your $234 billion dollars in profit. The market is insane and its conclusions are nearly meaningless.