Tech Devil: Apple’s Business Model Crushes Competition
Last week, Research in Motion (RIM), the makers of Blackberry phones, released their quarterly earnings. They were down $125 million from last quarter and announced layoffs of key executives. RIM has been dealing with stability issues for the past year or so. They’ve been consistently losing revenue, changing leadership and shipping mediocre products like the Playbook tablet. Other companies like LG, Motorola, HTC and Samsung have done all right but could be doing a lot better. How does Apple fit into this? Apple is the main reason RIM is failing.
Apple has one of the best business models in terms of making a profit. They build beautifully designed, high-quality products and sell them at an affordable price. Simple marketing and the general public’s addiction to consumerism does the rest. This is the reason Apple’s stock has gone up $200 in just a few months and the reason they have more cash on hand than the U.S. government and a boatload of other things.
They keep it simple, which is the key to success in anything, really. I’m not really sure how other tech companies can look at Apple and say that their business model is not the best way to do things. HTC got smart and has decided to cut down their product line of smartphones to the One series. The One X and One S are getting great reviews out of the gate and are considered to be top-tier competitors. LG, Motorola and others have yet to join the show and, while they do make good phones, they don’t have any that can really compete with the iPhone.
Going back to RIM, they’re having similar problems to that of LG and Motorola along with the fact that the iPhone is pulling market share right out from under the feet of RIM. More and more businesspeople and companies are turning to the iPhone instead of Blackberries. The fact that RIM’s phones and tablet run outdated operating systems that barely live up to modern web standards doesn’t do much for them either.
If companies want to seriously compete with Apple, they’ll have to step back and, like Ron Burgundy said to Conan O’Brien, do a page-one rewrite. This doesn’t mean companies that don’t follow suit will never make money, but they won’t make as much. They’ll continue to make low-quality phones that will make them good money in the short term, but lose customers in the long run because the customers will realize they could be saving money elsewhere. Samsung and HTC have the best chance of competing with Apple. Samsung has made great strides in smartphones and laptops, but they still have some work to do to create a viable iPad competitor.
I hope to see most tech companies decide to be like Apple, in their own special way, instead of following RIM into the graveyard of tech companies. This goes along with what I wrote about earlier in the year regarding simplifying and unification and hopefully the companies come to their senses.