Thursday, December 4, 2008

Garnering Market Share

It’s not often that any of us builds a business or product that has a chance to dominate a market, especially a market that already exists in a fairly large scale, but I think Apple has that chance here.

I agree with the idea here that Apple should sell a $99 iPhone and try to really set themselves up as the “generic” smartphone. Tylonal did that with aspirin, McDonalds with fast foot, Starbucks with luxury coffee, and Apple has done it with the iPod. The iPhone would allow them to do it again.

I don’t know what their profit margins are, but they are well capitalized, and they could easily try this for 6 months and see if their share of the market jumps dramatically, especially as none of the other vendors have done a decent job of getting a touch screen, easy to use smartphone.

I typically recommend building your business for the long term, making smart investments and not bets, but this isn’t a big bet. In fact, I’d think while they might risk some capital, they are making a fairly safe bet that their market will grow. Adding another network, say a T-Mobile to their list of carriers might make more sense, but if they want to stick with ATT, then this is a good idea.

If I had the chance to substantially grow market share, and have more exposure to my product, I’d be willing to take some risk, some amount of capital that I had and make the attempt. Market share is important and can really help you grow in the long term if you can deliver value to your customers.

Plus I want one. I’ll get a good case and see if I can not destroy this one, but it seems to be a much cooler phone and interface than any I’ve seen so far.

No comments: