PCs and iPad: How did Apple address the competitive landscape – Part IV

This is the fourth part of the post “PCs and iPad: How did Apple address the competitive landscape” where you can read about Apple’s background, market overview and trends. In the second part you will read about the analysis of the competitive landscape and the strategic environment which Apple is targeting. The third part is about Apple company’s strength to perform in the targeted strategic environment and the competitive map which shows where and how does the iPad fit among other products in the computer (named PC in the strategy radar of part II)  industry.

This part will finish the strategy analysis of the iPad defining its critical success factors and how they are addressed  in comparison with the closest competition at the time this article was written in August 2010. As with the competitive map from part III, this analysis was made for the industry and not the market, because there were no other popular tablets. We can use both analyses today as a study of tablets in general vs. other traditional products, which is interesting to form an opinion on whether the tablet is a long lasting technology or just a temporal trend.

Again, added extra information to explain some points is marked using **.

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4. Analysis of Apple-iPad Strategy (III)

iPad’s Key Success Factors against its competitors’ are shown in the Strategic Canvas in figure 5. In addition, the Strategic Canvas chart depicts the strategic profile of the computer’s industry and the factors that affect competition within it.

*The key (or critical) success factors are those characteristics that are important in order to choose a product or service over others. You can read more about them in the post “Messages Service and its Critical Success Factors“. We made this analysis in order to understand the difference in offer among the industry players defining what a tablet is in comparison with them. After selecting the critical success factors, they where assessed, connected and compared, resulting in a canvas where the the higher the overall line is, the better for the targeted market. *

Figure 5: Strategic Canvas

The Strategic Canvas shows a focused, divergent and well defined strategy for Apple-iPad that targets an specific market gap. iPad’s proposition can now be defined as “portable device designed for mainstream communication, rich media entertainment and medium content creation capabilities, with high technological design at an accessible price”. It is important to mention that in the case of iPad, accessible price does not mean low cost-low profit-low growth whatsoever.

5.         Results

The Apple-iPad was launched in April 3, 2010, and after only 4 months of its release, Apple sold almost 4.5 million iPad, forecasting to close 2010 with 7.4 million units sold. These numbers represented a forecasted total of revenues of almost $6m, which would be 10% of total Apple’s 2010 revenues.

iPad is likely to become another big platform for Apple. With iPad, Apple has created a completely new market, just like they did with the iPod and iPhone. Moreover, iPad is the only current competitor in the Tablet PC for now [*it was in August 2010, when this report was originally written*], enjoying the first-entrant advantage. After observing the big iPad’s success, some PC manufacturers such as HP, Dell and Microsoft, announced the launch of their new Tablets by the end of 2010. In addition, Google-Android is becoming a big menace due to its large number of Applications being created and its high performance OS. The new players in the Tablet PC market will launch their products with additional features in an intent of increasing their own competitive advantage.

Apple-iPad has created a new market with promising growth opportunities and logically new players will appear. However, Apple has a unique strategy of addressing the mass-market at a premium price and design based in its brand stregth, setting the new rules and standards for this new market. In addition, iPad’s biggest competitive advantage is the “content controllability” based on iTunes and Apps Store, which no other competitor will have in the short-term.

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In the next -and final- post:

  • Long-term impact and Recommendations (part V)
  • Managerial Agenda (part V)
  • References (part V)

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