Rumours are rampant about Apple’s automobile project. The latest is from Bloomberg saying that Apple is going to partner with an established automobile firm to produce a new car. So Apple will make the self driving software and Ford or another automobile company will make the physical car. Something like Apple does now with Hon Hai and their iPhone. Apple designs it, Hon Hai makes it in China.

Apple Titan Electric Car
Apple Titan Electric Car: The most dangerous competitor the automotive industry has ever known

The thing is, I believe that many people are underestimating Apple’s danger as a new entrant to the industry. They have entered new markets time and time (mp3 players, cell phones) again and ended up dominating the industry within a few years. However despite what most people think, it’s not often because of a better design.

I think the main reason Apple succeeds in new markets is due to them rethinking the revenue model. With mp3’s, the Koreans had the market locked down by the year 2000. They had hundreds of models with excellent quality and full of great features. Better than Apple even has now. Better sound quality, the ability to record voice, radio, longer battery life the list goes on. So if Apple was late to the market with a substandard product how did they take over?

 

In the case of mp3’s, they won by bringing in the record companies instead of ignoring them or trying to beat them outright. The Korean mp3’s were setup to play almost any file. And they did. Users downloaded files on the torrents and their mp3 players could play practically any file you threw at them. (reflecting the random nature of downloaded files. mp3, aac, tiff, flac, OGG, WAV. Anything really. Apple knew they couldn’t beat them on flexibility or quality. So they went back to the drawing board.

Who are the players? In this case, record companies and music buyers. The problem was that buyers were tired of buying whole albums. They wanted the song they liked and nothing more. So Apple worked a deal with the record companies (largely because they had not other options. i.e. work with Apple or let their stuff all be ripped off) So they created the .99 cent download. One song, any song. 99 cents. Simple.

Once they got users credit card it was easy to sell more songs. One click and boom. Singlehandedly Apple saved the record companies and also destroyed the competition. I don’t think many people realise how earth shattering that was. It literally saved the record companies and with it recording artists. So there is a heck of a lot of goodwill on Apple’s side.

They created a profitable ecosystem that didn’t exist and paired it with their hardware. That’s exactly what they did with the next market. Cell phones. iPhone plus apps = the destruction of the Japanese cell phone market. Once again it wasn’t just a better design. It was a whole new profitable that was created along with their hardware. It’s a brilliant plan and that’s exactly what they will do with Titan, their coming electric car. Check this video and let me know what you think. I think this is one of my most interesting videos because the topic is fascinating and much is unknown. Here I take a stab at it. Love to hear what you think.

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