Apple's Ecosystem Helps Deliver a Winning Customer Experience

Last week Paul Stamatiou wrote a post: Android is Better. That inspired me to share my perspective on how Apple provides the best customer experience for my needs. This is not to say that Apple has the best products for everyone. For your needs it could be Android. For someone else it could be Blackberry or Windows.

 

Apple's Ecosystem

Breadth and Depth of Ecosystem

One of the most important advantages that Apple has today is an unparalleled ecosystem. If you use a Mac, iPad, iPhone, and Apple TV you will have the most frictionless experience keeping your devices, services, and data up to date. Just set up iCloud! Today, nobody offers such an experience. I am sure that Google will be able to offer a similar ecosystem in the future. But in that future Apple will also be able to extend the depth and breadth of it’s ecosystem.

This ecosystem is even more important when you think of the average consumer. Unlike the geeks (including myself) when these consumers buy an iPhone they have a higher tendency to use Apple's stock apps and services - Calendar, Reminders, Notes, iTunes, etc. If they buy an iPad next these services (and data) are magically available on the iPad just by entering the iCloud credentials. Later on if they buy a MacBook all of this is available there too. Only Apple can provide such a deep and wide experience today. As these customers buy more Apple devices their experience becomes exponentially better.

Services that Customers Love

An argument that comes up frequently is regarding Apple's weakness in services. It is true that Apple is not as strong in services as Google. But when you look at all the services you use today, there is a long tail of services that is not from any single company. No matter which platform you choose you will use at least a few services that belong to neither of these companies. So when it comes to services the right question is: Which platform provides the best experience for all the services that you use? Today it seems like it is the App Store. Everyone from a small startup to Google and Microsoft wants to make sure their apps are available in the App Store. Think of any hugely innovative/disruptive/popular apps that have been released in the recent past - Mailbox, Tempo, Quip to name a few, they have all come on iOS first. In fact 8 months after launch Mailbox, and Tempo still don't have an Android app. Then there are apps that are available on both iOS and Android but the experience on Android is not close to the experience on iOS. A recent survey from Canalys highlights this:

Quite simply, building high-quality app experiences for Android tablets has not been among many developers’ top priorities to date.

This could change in the future. As Benedict Evans recently wrote:

If total Android engagement moves decisively above iOS, the fact that iOS will remain big will be beside the point – it will move from first to first-equal and then perhaps second place on the roadmap. And given the sales trajectories, that could start to happen in 2014. If you have 5-6x the users and a quarter of the engagement, you're still a more attractive market. 

Although he suggests that a cheaper iPhone could reverse this trend:

A new, cheaper, high-volume iPhone would have the potential to mitigate or even reverse this trend. Clearly, like current low-end Android, it would sell to a demographic with a lower average engagement and purchase rate and so the average iOS rates would drop. However, it would mean that iOS’s reach would expand significantly at the expense of Android. How would a $200 or $300 iPhone sell? Easily double digit millions, possible up to 50m units a quarter. 

There is also historical precedent that a smaller iOS market share may still get the developer attention that Apple gets today. As Rene Ritchie writes (via John Gruber): 

The Mac, though its market share was never large, especially when compared to the well over 90% marketshare of Microsoft Windows-based PCs, had always attracted an incredibly talented, incredibly dedicated group of developers who cared deeply about things like design and user experience. OS X enjoyed not only the traditional Mac OS community, but the NeXT one as well. That talent share always felt disproportionate to the market share. Massively. And a lot of those developers, and new developers influenced by them, not only wanted iPhones and iPads, but wanted to create software for them.

World Class Customer Service

When you use so many products, and services you are bound to have a problem at some point of time. The Genius Bar at the Apple Store is unrivaled in helping customers. I have never had a bad experience in my 7 years of using multiple Apple products. I have also heard countless stories from friends who have had similar positive experiences. And there is absolutely no competition in this area. Those that have the infrastructure to provide in store service (Verizon, AT&T, Best Buy) don’t place much emphasis on customer service. Those who understand the importance of delivering a great customer Service (Google) don’t have the infrastructure today.

Total Cost of Ownership

Apple products are priced very reasonably considering their lifespan and resale value.  Let’s consider the iPhone as an example. You buy a new iPhone for $220 with a 2 year contract. Right before the launch of the next iPhone you can sell that iPhone for $400 - $450 on Craigslist. From that money you pay $250 for the contract breakage fee, and spend $200 on a new iPhone. Your total cost of ownership comes out to be iPhone is $20/year. I have done this 3 times now so I am not pulling these numbers out of thin air. I have also sold (via Craigslist) a 1 year old MacBook Pro at a 10% discount, a 4 year old MacBook at a 50% discount, and 1 year old iPads at 25% discount. 

Apple’s advantage lies in providing an end-to-end experience that delights its customers. While competitors are doing well at some pieces of the ecosystem no one is able to offer an end-to-end experience. As competitors race to build a strong ecosystem Apple could retain its advantage by increasing the breadth and depth of its ecosystem, staying the best platform for services that customers love, and continuing to provide world class customer service.