illustration 11.3 Apple's iPad advantage Gaining competitive advantage through collaboration? Consumers like the ease of use and vast ecosystem of With much fanfare, two new versions of Apple's iPad were launched in October 2018. These iPad Pro models offer more Apple's iPad but challenges were mounting. Amazon's low screen, new displays, Face ID, Apple Pencil, curved screens, cost 'content consumption device', Kindle, offered a vast a new USB-C connector for greater versatility and a thinner library of movies but lacked Apple's beauty and had few body than earlier models. These innovations are part of the apps. Google's low priced Nexus 10, aimed to profit from reason why Apple continues to dominate a highly compet- business services use rather than hardware. Its improved Itive tablet market and excite such customer interest on screen resolution and android operating system challenged launch day. However, the first customers into the shop are iPad's technology and it shared many characteristics of people who just can't wait to tear the gadget apart. Market research firm iSuppli's 'teardown' analysis experience. Samsung's own tablet, Galaxy Tab, had similar revealed the €622 (E497, $829), 4G 64GB model, cost $409 advantages along with compelling design and openness (£245, €306) to make, just 49 per cent of its retail price. They to non-Apple standards. Microsoft aimed to profit from identified Broadcom and Qualcomm as suppliers of Blue- tooth and Wi-Fi chips, STMicroelectronics the gyroscope, lacking a comparable software ecosystem and its tie to Cirrus Logic the audio chip, three Taiwanese companies Windows could be a hindrance. touchscreen components, Sony the camera CMOS sensor and Samsung, a direct competitor, the expensive display, million units since 2010. However, Apple has been embroiled battery and processor chip. Apple is at therefore at the heart of a network. However, and this is symptomatic of the competitive intensity of the it had always protected its intellectual property. No hardware sector where competitor products are increasingly similar was licensed, ensuring control of production and mainten- in appearance. Apple's products success though is not just ance of its premium pricing policy. It was impossible for any down to their appearance but their underpinning collab- independent company to manufacture cheap iPads, in the orative network where the real battle is fought out, for way for instance Taiwanese manufacturers produced cheap consumers buy the ecosystem rather than the gadget. IBM/Microsoft-compatible personal computers in the 1980s. Sources: G. Linden, K. Kraemer and J. Dedrick, Who captures value in a iPad's success has attracted a swarm of companies global innovation network?' Communications of the ACM, vol. 52, no. into the accessory market, such as Griffin (US) and Logi- tech (Switzerland) supplying attractive add-ons including F. MacMahon, "Tablet Wars', 4 December 2012, Broadcastengineering. ultra-thin keyboards, cases and touch-screen stylus. Apple licensed them the necessary technology and benefited from attractive complementary products and royalties. But the relationship was arm's-length, with no advanced informa- Questions tion about new products. Apple originally jealously controlled access to iOS. However, 1 What are the pros and cons of Apple's tight control of for the iPad, it opened up allowing third parties to develop apps, and this stimulated the new App stores industry. The 2 What role has 'ecosystem' played in Apple's competitive attractiveness of 1Os and strong consumer demand encour- aged software developers to produce for Apple first. other ecosystems with streaming apps and a consistent user its hardware, Surface, but was not particularly innovative, IPad is a phenomenal success with sales in excess of 350 in lawsuits against Samsung over its Galaxy Tablet design 3 (2009), pp. 140-05; Tablet Wars: The Telegraph 6 November 2012; com; A. Hesseldahl, 'Apple's new IPad costs at least $316 to build, IHS ISuppli Teardown Shows, 16 March 2012, http://allthingsd.com licensing? advantage?