Thursday, December 10, 2009

Business model example: Apple - Providing convenient solutions

Apple has a history of design-driven product innovation and has introduced a number of high-end products such as personal computers, media devices, accessories, peripherals as well as media and software to support their products including operating systems, applications for areas such as music and video. Apple has revolutionized the computer industry, the music industry and now the mobile phone industry. The classical example of business model innovation is related to Apple's iPod and later the iPhone. Launched in 2001, the iPod was a standalone product, but when Apple launched the iTunes Music Store in 2003, it provided cheap music for buyers of their physical products, turning Apple into the world's largest online music retailer. The same strategy was applied to provide a convenient solution for applications to its iPhone when the App Store for iPhone was launched in 2008, establishing Apple as a broker of application, collecting a 30% royalty on each application sold.

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