August 25, 2011
I'll let others wax on wax off about Mr. Jobs' courage, taste, focus, vision. I'll merely point out that under Steve Jobs, Apple has been a brilliant systems thinker. The story starts with a whooping and winds up with market systems brilliance. Let me explain.
The vendor with the best market system wins. It's why Microsoft whooped Apple in the PC market. While Apple under Steve Jobs focused on its Macintosh closed system of hardware, software, and applications, Microsoft built an open market system on Windows: any hardware, any application, many ways to make money.
Mr. Jobs and Apple mastered the lesson: it's the market system that matters. A successful market system includes all the players, all the pieces, the end-to-end solution, the business model, the flow of money, the attractors, blockers, hardware, software, content, and services all wrapped into what we in 2006 called a single digital experience (what we now call a "total product experience").
With the launch of the iPod in 2001, Apple's market systems mastery shone through. Others had built great MP3 players. Only Apple built a great music market system.
In 2001, the music publishing industry was in shambles. Adolescent thieves stole music and the publishers wrung their hands. Then came iPod. Apple delivered a complete market system built on iPod, iTunes, and the Apple Store. Apple's music market system had it all: music player, marketplace, retail store, payment system, rights protection model, and a fully conceived business model. (And of course Apple improved it over time with more content, iTunes on Windows PCs, pictures, video, and a music player at every price point.)
This didn't happen by accident. Jobs and team thought it through, negotiated aggressively with the market-defining players, built on what had come before, and stitched it together into a brilliant market system for the music industry.
Then came iPhone. In 2007, the smartphone industry was bereft of ideas. The carriers controlled the market and ambled along building faster networks with nothing to use them for; the smartphone players incrementally improved their communications devices; and the PC looked ready to Aircard its way to mobile relevance. The problem was that no vendor had the right market systems view (or if they did, they didn't have the courage or ability to implement it).
With iPhone, Steve Jobs and Apple pulled off their biggest and most comprehensive market systems coup. By co-opting the carriers into treating iPhone like the computer it is, Apple with AT&T's support created an ecosystem with all the right elements: hardware, software, applications, content, network, distribution model, delivery model, ad delivery model, payment model, development model, and all that other stuff.
Apple then listened to the needs of all players — including the enterprise — and enhanced the system over time to overcome its limitations. For the enterprise, Apple first added business email, then decent security, then enterprise device management hooks, and now a B2B app store and soon a decent over-the-air software delivery model. Apple grew its mobile business ecosystem by addressing the concerns, desires, and needs of all the players in the market. 425,000 iPhone apps is the result.
When iPad appeared in 2010, it plugged right into that system, quickly earning 100,000 apps, and we all started talking about the battle of the mobile ecosystems. And now Mac is joining that ecosystem, with an app store, touchscreen interfaces, and the same delivery, monetization, and developer attractors.
And we have Steve Jobs to thank.
So when we think of Steve Jobs' contribution to Planet Earth, let's thank him for thinking broadly and systematically about all the moving parts and how they fit together; all the complexity and how to overcome it; and all the players and how they can make money, too.
I wish for you a peaceful journey, Steve.