Apple’s Strategic iParadox

Interesting blog post by Umair Haque.

The iPad's like an amazing hairdresser — who wants to monitor your bathroom for authorized shampoo, conditioner, and water. By building a device that liberates services, but locks down ‘product’, Apple’s shooting itself in the iFace. It’s as if Apple wants to step into the hyperconnected network age — but also keep one foot firmly planted in the industrial era.

The iParadox is this: Apple should be striving to commoditize products if it wants to benefit from services (or vice versa). But it’s trying to benefit from both at once — which is, simply put, strategically self-destructive. One is the mirror image of the other.

The real promise of the iPad is to help the beleaguered media industry, bereft of imagination, kickstart the great shift from products to services. Media’s been stuck for too long in the the industrial era, trading in mass-produced, mega-marketed stuff. But in a hyperconnected world, as media players are finding out the hard way, mere stuff’s a commodity. Service economics are superior: services are less risky, less capital intensive, higher skill, higher loyalty, and dramatically less imitable. The result is that service-centric businesses tend to have higher margins and create significantly more value than product-centric businesses. That’s why every economy (and sector) that transitions past the industrial era is built on them…