Class reflection #6

19 08 2008

One of the more interesting discussions we had in class yesterday was related to the iPhone being a closed system. Apple seems to defy the idea that monolithic, closed systems are dead, as suggested by the authors of Wikinomics. Despite logical thinking that a closed system would be unattractive to people, along comes the iPhone, just like the iPod before it, to defy convention.  The iPhone is:

  • Only available on one carrier (AT&T) in the US
  • Only available in one form factor (touch-screen; no flip phone or QWERTY keyboard)
  • Only available in two colors (previously just one)
  • Only allowing users to access content and applications through iTunes
  • Moderating which applications are available to users
  • Relatively expensive in terms of both price point with contract and data plan

Compared to other smartphones from BlackBerry, Microsoft and Nokia (Symbian), which offer multiple phone styles, carrier, applications and services, the iPhone is greatly limited. Yet, it is the fastest selling phone of all-time, attracting mobs to AT&T and Apple stores when the latest 3G iPhone was made available. It was TIME Magazine‘s “Invention of the Year.”  The iPhone is adored by consumers and press alike because it trumps its limitations with an unprecedented user experience and has become a status symbol.

The iPhone’s success begs the questions: Do people really want an open system if an alternative closed system can provide better experiences? Do people want variety and flavors (as suggested by Yochai Benkler and Chris Anderson), or do they want a single product to be like everyone else? The iPhone is yet another example of Apple challenging logical economic approaches to markets with products that provide experiences that trump all other purchasing decisions to gain market share from competitors.

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