Sony v IPod 102314
Sony Versus IPod
Case Preparation and Discussion for MKTG505
2015 NIU MBA FastTrak
Ronald Kollman and Wang Weixun
October 27th, 2014
1.
What are the advantages of proprietary products like Sony and Apple employ versus open source products like IBM or Dell advocate?
The advantages of proprietary products is that they have a captive market with regard to accessories and deliverable content. For example, music for the iPod is mostly deliverable through the iTunes application. Therefore one must buy through that application and Apple gets the additional revenue from there in addition to selling the hardware (iPod). One also gets software upgrade and application control for proprietary devices which can be beneficial for the end user in that they are less likely to get viruses. Open Source is the opposite whereby the software and content is mostly out of the control of the hardware manufacture. How and under what conditions do proprietary products pay off? Proprietary products payoff when there are fewer available competing nonproprietary options available. The proprietary products can gain a momentum in their segments as well to where they set the standard for devices therefore they get bigger initial market penetration and brand equity. The proprietary aspects can also be desirable in certain segments for security. For example, Motorola's older phones had proprietary software inside. Governmental agencies find these phones preferable to other phones as they are less vulnerable to hacking. Therefore, for governmental institutions, sometimes these items can get companies in as qualified suppliers and
MKTG505 – Sony Versus IPod
Kollman & Wang
1 of 5
then as sole source. Consider two consulting companies. One publishes all its intellectual property in books and articles, and the other has a set of black boxes. Which model is better?
Both methods are workable and profitable depending on
Case Preparation and Discussion for MKTG505
2015 NIU MBA FastTrak
Ronald Kollman and Wang Weixun
October 27th, 2014
1.
What are the advantages of proprietary products like Sony and Apple employ versus open source products like IBM or Dell advocate?
The advantages of proprietary products is that they have a captive market with regard to accessories and deliverable content. For example, music for the iPod is mostly deliverable through the iTunes application. Therefore one must buy through that application and Apple gets the additional revenue from there in addition to selling the hardware (iPod). One also gets software upgrade and application control for proprietary devices which can be beneficial for the end user in that they are less likely to get viruses. Open Source is the opposite whereby the software and content is mostly out of the control of the hardware manufacture. How and under what conditions do proprietary products pay off? Proprietary products payoff when there are fewer available competing nonproprietary options available. The proprietary products can gain a momentum in their segments as well to where they set the standard for devices therefore they get bigger initial market penetration and brand equity. The proprietary aspects can also be desirable in certain segments for security. For example, Motorola's older phones had proprietary software inside. Governmental agencies find these phones preferable to other phones as they are less vulnerable to hacking. Therefore, for governmental institutions, sometimes these items can get companies in as qualified suppliers and
MKTG505 – Sony Versus IPod
Kollman & Wang
1 of 5
then as sole source. Consider two consulting companies. One publishes all its intellectual property in books and articles, and the other has a set of black boxes. Which model is better?
Both methods are workable and profitable depending on