How App store enable Apple gain success in the market of smart device

In the information age, the technology innovation has created lots of business opportunities and altered the business model of various industries. More and more companies more focus on promoting the growth of its main business by selling products to customers or providing service to them, rather than focus on products and services themselves. For example: Amazon sells the kindle to promote the sales of e-books, which indirectly promotes the profit growth of e-commerce business. Twitters attract users by freely providing social network services, which enable it to accumulate lots of internet behavior data. So, Twitter can analyze users’ behavior data and get profit form advertisements by pushing ads according to the users’ favor, Furthermore, Twitter can get profit by providing other recommendation service to business partners. As world leading smart device manufacturer, Apple has established a large ecosystem including software platform-Appstore, music service-iTunes, TV+, accessory certification system and etc., which attracts lots of people to purchase Apple smart devices and enable Apple to be the largest smart device manufacturer(Sohail, 2019). In the following content of this article, we will discuss how the core of Apple’s digital business model–App Store enable Apple to gain success in smart device market.

As a disruptor in mobile device manufacturing, Apple opened the smart phone era. Before the release of the Apple phone, the main function of the phone was to make calls, receive text messages, and take photos. Most of traditional mobile phones only support first-party mobile phone software applications, and the software platforms are not open to external software developers. Therefore, the number of software applications in traditional mobile phones are very limited. In the era before the release of the Apple phone, people paid more attention to the appearance design, hardware performance and brand effects when choosing products. Before the success of iPhone, nobody thought that a computer manufacturing enterprise would gain success in the mobile phone manufacturing industry. At that time, Nokia was still the leader in the mobile phone industry. However, Apple unexpectedly won the leading position of the mobile phone industry in a very short period of time. One of important factor enabled Apple to win this success was App store. The App store contains a large number of third-party software, including 3D games, video players, social software. And it allows third-party developers to publish apps in this platform. The launch of the App Store had completely changed the way that people use mobile phones, allowing Apple to quickly occupy a relatively high market share in this emerging market of smartphones, and also laying the foundation for Apple to become the leading company in smartphone industry. By 2019, the number of application software in the Apple App store has exceeded 1.8 million (Statista, 2020), becoming the second largest software application platform, and its software types cover business, entertainment, artistic creation, education and other fields. The success of Apple today is not only because of its brand effect and brilliant hardware to attract consumers, but also because of its variety of software attracts more and more consumers to buy Apple products.

Furthermore, the App store enable Apple to develop business sustainably. As Apple has opened the development rights of its software applications to a large number of developers, the App Store has attracted a large number of software developers to publish applications on the it to earn business profits. The more applications published in the App Store, the more customers are likely to be attracted to purchase Apple products. Therefore, the advantage of customer resource will attract more developers to develop apps for Apple smart device. Therefore, the open software application platform of the App store has created a virtuous cycle for Apple’s business, allowing Apple to establish the advantages in the number of software and customer resources in the early stage of the smartphone market, forming industry barriers, making it nearly impossible for latecomers to copy Apple’s success, therefore, the App store has also become a business model of circular profit.

There is no doubt that Apple is a successful company with the estimated market value at more than one trillion (Investopedia, 2020). One of the important factors that contributes to its success is its open source software platform. However, its main competitor, Google Android Platform, also supports a large number of software applications. And in recent years, mobile phones applied Android system have become better and better in terms of user experience, which may pose a threat to Apple’s market share. The pace of technological development has never stopped, and Apple needs continuously integrate new technologies and business models to ensure its leading position in the industry.

Reference:

Investopedia. (2020). At $1.3 Trillion, Apple Is Bigger Than These Things. Retrieved from: https://www.investopedia.com/news/apple-now-bigger-these-5-things/

Sohail, O. (2019). Apple’s Market Share in the Premium Smartphone Segment Remains Unrivaled, Despite a Drop in Sales. Wccftech. Retrieved from: https://wccftech.com/apple-market-share-premium-smartphone-segment-q1-2019/

Statista. (2020). App stores: number of apps in leading app stores 2019 | Statista. Retrieved from: https://www.statista.com/statistics/276623/number-of-apps-available-in-leading-app-stores/