The Real Competitive Advantage of the Apple Ipod

Only available on StudyMode
  • Download(s) : 98
  • Published : March 11, 2006
Open Document
Text Preview
Introduction
The contemporary press is flooded with articles and commentaries extolling the phenomenal success of Apple's iPod. It seems everyone has an opinion as to how design has contributed to the dominance of Apple in this lucrative, emergent market, targeted—if not lusted after—by savvy high tech giants Sony, Samsung, Dell and Microsoft.

But I suspect that something more clever is afoot; that Apple's design strategy is in line with something we call "value transference." And if my suspicion is correct, the technology at the heart of the iPod will have little to do with their long-term competitiveness in the consumer electronics realm. Each new iPod embodiment brings a fresh form, feature, function and cost based analysis: The New York Times' David Pogue offers good consumer reports on a consistent basis. Frog Design's Luke Williams suggests that the "clean" look of this product is an intentional consequence of references to the white ceramic and polished chrome tropes of the humble bathroom design experience—we keep calling the iPod such a "clean design" expressly because it references these materials and finishes; Susannah Cullinane of the BBC News suggests that the central iPod design elements were borrowed from the similarly successful Regency TR-1 transistor radio launched in 1954; Engadget's Clicker columnist Stephen Speicher postulates how Apple is poised to use the new iPod to capture the portable video market; still others propose that Apple is looking to control the cell phone handset, or video remote markets, with future generations of this product.

These reflections on design strategy are interesting, and speculating on future target markets is always provocative. But I suspect that something more clever is afoot; that Apple's design strategy is in line with something we call value transference—a dynamic strategy that can be quite successful in technology markets. And if my suspicion is correct, the technology at the heart of the iPod will have little to do with their long-term competitiveness in the consumer electronics realm. Further, if we look in the right places, we can learn precisely where Apple intends to move, leveraging the design of the iPod—but not the kind of design you think.

Research Foundation
At the Kellogg School of Management's Center for Research on Technology & Innovation, we study how contemporary firms use innovation and design to build and sustain competitive advantage. Of particular interest to our research team is the premeditated tactical and strategic use of specific intellectual property regimes (patents, marks, secrets and copyrights) in a time-sequenced manner.

Marks, unlike patents or copyrights, never expire if used properly. Registered design elements that serve as a brand foundation are therefore indefinite forms of competitive advantage. Our findings overwhelmingly support the conventional wisdom that design decisions cast a big shadow on the commercial success of the product over its lifecycle. But more recently, we have found that some firms know how to build brand identity through great design, and they understand how to leverage and secure critical design elements and cognitive touch points of the user experience through non-traditional marks. In the process, they build strong, transferable brand identity throughout the product lifecycle that can be leveraged in future offerings.

This has led us to consider the possibility that the cognitive touch points of the user experience can be reconciled—and secured or monopolized—as unique brand elements through non-traditional marks. Marks, unlike patents or copyrights, never expire if used properly. Registered design elements that serve as a brand foundation are therefore indefinite forms of competitive advantage.

Value Transference
Value transference, in a nutshell, is the premeditated use of multiple intellectual property regimes at specific points across the product lifecycle, in order to realize...
tracking img