Leveraging the Apple Ecosystem with Third Party Hardware Products

There are many things that make a successful company: great leadership, exemplary people, a solid culture, and a much targeted market.  Yet, people sometimes overlook the impact of building a successful ecosystem of partners who can help a company with new applications, products, features, and channels to the market. 

So we decided to look at one of the masters of building such an ecosystem: Apple. We all know how successful Apple has been with the iPhone and the iPad and creating new product categories and platforms that leverage mobile computing. Mobile accessory vendors have been quick to leverage Apple's product platform from the very beginning. In building lifetime value of a customer, these accessories can derive large profit margins for everyone in the value chain. Just how big is the market?

Source: http://www.slideshare.net/andreasc/mobile-megatrends-2014-25-may-2014

ABI Research expects global revenues for mobile accessories to be $81.5B in 2015. Future Market Insights believes global mobile accessories market revenue will reach $121.7B in 2025.

For the sake of discussion, we can look at mobile phone accessories as part of larger wearables and mobile accessories market. In fact, if you use mobile phones as controllers, they start to tap into the concept of the Internet of Things (IoT) and other related and adjacent markets in smart homes, entertainment, and security.

Let’s look at mobile phone accessories. Future Market Insights subdivided this market into more than 6 categories as shown below and included their 2014 market share.

Source: http://www.futuremarketinsights.com/reports/global-mobile-phone-accessories-market

While this list is pretty straightforward, strangely, I believe it is missing one important category - hardware enabled input and output devices that take advantage of the iPhone platform as a controlling device. This is a distinct advantage of the iOS market. Unlike Android devices, whose styles, hardware, form factors, buttons, switches vary by competitor, the iPhone platform and ecosystem is standardized to allow a clear path to hardware development of the iPhone mobile computing platform. They offer developer programs like MFi and the External Accessories Framework (EA) to support communication and support of third party hardware device to an iOS device through Apple Lightening, 30-pin connector and wirelessly using Bluetooth.  

In the presentation by VisionMobile, these ecosystems have given birth not only to red and blue oceans, but black oceans, ecosystem driven-markets that are so powerful and strong, you can't beat them, and you can only join them or compete with them with another black ocean ecosystem (e.g. Android vs. iOS).

A simplified input-output model for hardware development looks something like this:

Source: Vince Ferraro

In the imaging, test and measurement, and audio markets, companies are leveraging Apple's ecosystem in some exciting and new ways, often creating new product categories or products that are substitutes to existing products that were created on platforms and devices in the pre-smart, mobile phone world.

Here are some examples of such products.

Imaging

Ollo Clip 4-in-1 Lens System

Zeiss Optics Exolens System

Flir One - a thermal imaging infrared camera attachment. A similar product is offered by Seek.

Sony QX30 Smartphone Attachable Lens with 18MP and 30X optical zoom

Echo Labs Revolve - a San Diego startup that is developing an innovative microscope that use mobile phones and tablets for image viewing, image capture, analysis and printing.

HyperCam - under development, the HyperCam makes use of a technology called hyperspectral imaging, which involves scanning 17 wavelengths of visible and invisible near-infrared light from across the electromagnetic spectrum to capture unseen details.

Scanning

Infinite Peripheral’s LineaPro 6 Accessories Bar Code Scanner - turns your iPhone into a bar code scanner

eora 3D - the world’s first high-precision 3D scanner that is entirely powered by a modern smartphone. It lets you capture everyday physical objects and surfaces and turns them into high-quality 3D models, all on your phone, making it extremely affordable.  

Sensing & Measurement

Lapka for iPhone - a range of environmental sensors that plug into the iPhone

Scanadu SCOUT  - which is developing a  personal medical Tricorder

Range Smart Cooking Thermometer - hardware and  app to receive remote temperature alerts to iOS devices anywhere.  You can also save and share recipe graphs, and set both USDA- and gourmet-recommended presets, so you know your dinner will be done just how you like it.

There are also brainwave measurement using devices like Emotiv's EPOC / EPOC+. Another popular one is by Muse.

A list of other medical-device accessories for the iPhone can be found here.

Audio & Music

Alesis IOMIX 4-Channel Audio Interface/Mixer for iPad - enables four-channel mixing and recording on your iPad. The iO MIX provides all of the necessary connections, as well as compact four-channel mixer for making the most of every performance. With its compact design, iO Mix is the perfect portable studio.

Focusrite iTrack Professional Dock for recording on iPad. iTrack Dock is a comprehensive, studio-quality iPad recording interface that acts as the hub of your iPad recording studio. It features dual legendary Focusrite microphone preamps, along with two line inputs and an instrument DI with plenty of extra headroom, stereo monitor outputs with 105dB dynamic range plus independently controlled headphone outputs, and a USB port for class compliant MIDI instruments and controllers.

DigiTech IPB10 Guitar Floor Multi-Effects Pedal -  a programmable Pedal board which sets a new standard for guitar signal processing. By harnessing the power of the iPad, it combines the simplicity of a pedal board with the flexibility of multi-effects. The iPB-10 unleashes the ability to create and control guitar effects like never before. The iPB-10 allows you to create your ultimate pedal board, all on your iPad. Design a pedal board by simply dragging and dropping up to 10 different pedals, in any order, to each pedal board.

IK Multimedia iRig 2, an interface adapter for iPhone, iPod touch, iPad, Mac and Android. They have an entire line of mics, mixers, effects, and recording attachments for smartphones and tablets.

Where do you go from here?

There are many other examples and opportunities are limited only by the capabilities and functionality of the iOS platform. 

The key point is that a company, such as Apple, looks at their product as a platform upon which others can build and profit from.  In addition, other companies can exploit that ecosystem to build their business.

There are a many hardware opportunities for innovative companies that can do one of two things to leverage the capabilities of Apple platform.

1) Replace existing products by harnessing the power of the Apple ecosystem. Create disruptive products that challenge and change prevailing value propositions and pricing of these products in the market.  Leverage existing value chains to drive market share and expand the market.

2) Create new products and solutions that were too costly or unattainable, until the iPhone ecosystem was developed. Develop the market with new price/performance curves and blue ocean ideas that bring radically new capabilities and functionality that might have been confined to a higher priced niche.

While this blog focuses on Apple, other companies may glean ideas on how they can transform their products and services by leveraging the power of an ecosystem.   Sometimes, it is just a matter of building a stronger business development function.  Other times, it may be reviewing and expanding on the product set which will make the product or platform more robust.  Perhaps setting up a new product or business advisory panel can help with those ideas. 

What are your thoughts on this topic?  Let’s continue the dialog. And if you would like to discuss building an ecosystem, feel free to contact me at vferraro@clevelpartners.net or tweet me @vincelferraro and check out our other insightful blogs and resources.

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StreetSavvy Marketing Predictions for 2016

StreetSavvy Marketing Predictions for 2016

It’s that time again when just about everyone has predictions for the New Year. In November, Forbes contributor Kimberly Whitler posted predictions from the C-suite.   Adam Davidi, from the Guardian, posted predictions on branding based on conversations with “experts.”   I am sure we will see predictions from Forrester, Gartner and others as well.

We, at C-Level Partners, don’t want to be left out.  My colleague, Vince Ferraro, and I have been C-level executives in marketing and general management for many years. We now consult with companies on marketing and their go-to-market strategies.   We decided to look at “Big M” marketing, relating to predictions for how companies and brands go to market and how they interact with customers.  So without fanfare and any biased perspective, we share these predictions for Marketing for 2016. 

Let me be candid.  While most of these are predictions based on our work with clients, with start-ups and in talking with our marketing colleagues, there are also some “aspirational trends” that we hope come true for the profession as well as we believe they are important for marketing professionals and the businesses they manage.  Some of these trends overlap and leverage each other.   To us, that will represent the power of good marketing.  In no particular order, our top sweet 16 are:

1.       Cognitive Commerce has begun.  Marketers will use information on customers from their databases, the internet, and other sources to build stronger relationships, build predictive algorithms, personalize content, and deliver products and services to meet their specific needs.

2.       The distinction between offline and online will disappear as real time analytics will unite both camps.  Marketers will consider all (omni) marketing channels to optimize their marketing programs based on cost, effectiveness, ROI and the satisfaction quotient from building relationships with customers.

3.       Branding will be from the inside out.  Companies will not push the brand but the brand will be built on trust, engagement, referrals, authentic dialog, and transparency.

4.       Digital Marketing will cease to exist as a standalone part of marketing.  There isn't a need for separation anymore. World class marketers will know how to market in a digital world. Traditional and online marketing not only will coexist, but one will leverage the other and work better together.

5.       Advances in video broadcasting and continued growth in mobile devices will change TV marketing forever.   Marketers will use new technologies to enable a more immersive experience and TV and other broadcast video usage will expand on all screens - laptops, desktops, tablets, smartphones, HDTVs and even screens in cars,( i.e. telematics).

6.       Content will be created specifically with video channels in mind.  Further, there will continue to be a migration to mobile video which will become de rigor on a company’s website, in blogs, in training, and on Youtube.  Youtube channels for marketers will continue to expand.  In addition, the use of video podcasting and live streaming are also in a growth mode.  The world is clearly digital and going video and marketers will take advantage of that. 

7.       Personalization will grow as its ROI is measured and as customers come to expect to be treated as individuals.  We, at C-Level Partners, have written that there are now 7Ps of marketing and personalization is one of them.  Technology and marketing automation will enable this to happen.  This personalization will improve company branding and the ability to build stronger relationships with customers.

8.       Marketers will get back to basics.   Solid, well planned marketing will trump the sexy marketing in the past.  The CMO and business leaders will focus on marketing as a strategic investment to generate profitable revenue.

9.       The human touch will return to marketing.  How many of you love to listen to an automated customer service system saying that “your call is important to us…”  That’s bull!  Companies will realize that you are important and will show it by having more touch than tech or at least do a better job of integrating the two.  Being human will also apply to helping customers understand the value of the company’s products and determining what motivates buying behavior.  This is like getting back to the future… and I love it.

10.   Employee experience (EX) will be as important as customer experience (CX).  Engaged employees are critical because at the front line – in retail, sales and customer service- they ARE the brand, or at least a fair representation of it.   Engaged employees also feel part of the company, behave like owners, and will be promoters of the company's products and services.  According to our anecdotal evidence, only about 30% are engaged today.  Think Zappos, Starbucks, 1and1, and Jet for companies who provide both good EX and CX.

11.   Marketing and Data Science will be the new dynamic duo.   This will be key to understanding the customer persona from many angles - demographics, psychographics, sentiments, and buying behavior.  Vince and I, both being engineers, can relate and understand this dynamic.  We expect to see the CIO and CMO becoming BFF’s.  

12.   As a corollary to #11, data will be the new currency for the younger generation. Data will enable the ability to personalize the marketing message and make that message more meaningful and differentiated for a particular customer.   But it doesn’t only apply to the younger generation; big data will be used to help understand buying behavior of all customers and couple that information with the dynamics of profitable revenue growth for the corporation.   The new marketer will be, must be, a datahead or recruit the right people in his/her organization who have the skills to analyze the myriad of data available from business and marketing systems.

13.   Marketers will provide more original insights into business.  Marketers will not be mere curators of data and content.  The key word is original.  By having more insight into business, the CMO will be able to justify his/her seat at the executive table.  (This is a belief and expectation!)

14.   Customer success will be determined by a combination of satisfaction, retention, and referral.  We have always believed that the combination of the three components will yield the most loyal customers.   In conjunction with this, customers themselves, through social media, will become the company’s best sales people. Technology to help build customer engagement will continue to evolve and become more sophisticated.

15.   Marketing and selling will be in an omni-channel world.   Marketing execs will understand the buying persona of their customers and will use math and analytics to optimize the sales and distribution channels.  But the key here is that it will not be one channel vs. the other.  The marketer will blend online and offline, retail and wholesale, third party distribution and direct to ensure the buying experience matches the customer and to improve the profitability of the company.

16.   Chief Marketing Officers will evolve to become strategic businesspeople first and “marketing" executives second.  This is our wish and expectation; therefore, we took the liberty to include it as one of our predictions.  The CMO will be the linking pin from the outside world of the customer to the inside world of production, manufacturing and operations.  He/she will have a unique view on building and capturing valued.  In the past, we have not seen this from most of our traditional marketing colleagues as many have been focused on one area e.g. advertising, digital, brand, and product.  The new marketing executive will be a generalist, a businessperson with a focus on top and bottom line growth, steeped in data analytics, change management, and growth levers, coupled with creative and innovative bent.  We may be wrong about this one for 2016, but we believe it will eventually take root over time.

We would be interested in hearing your thoughts on your sweet 16 predictions for 2016.  Let’s keep the dialog going at www.clevelpartners.net.   And feel free to contact me at dfriedman@clevelpartners.net or Vince at vferraro@clevelpartners.net for a complimentary discussion on how we can help you achieve value creation and profitable revenue growth.

The New 7Ps of Marketing: Disregard at Your Own Risk!

I was reading an article in the recent Forbes online CMO Network by Kimberly Whitler entitled: What are the top predictions for marketers heading into 2016?   Ms. Whitler surveyed some experts, including CEOs, Presidents/GMs, CMOs, authors and executive recruiters.  In a different but recent article, Forbes CMO also ranked the top 50 CMOs.  To me, I would have rather heard their predictions.  

I always enjoy reading “predictions” because they keep me on my toes- maybe I missed something- and makes me challenge what I believe are the upcoming trends.  As a businessman and marketer I certainly don’t want to be caught short. 

Yet, I found the article very interesting and certain worthy of consideration.  I believe that each person is looking at the "elephant" from their unique vantage point.  And frankly, I am not sure they are predictions or wishful thinking based on the viewpoints of the interviewee. Nevertheless, they are certainly food for thought. 

From a holistic view, my prediction - or wishful thinking - is that marketers need to start with the customer and realize that marketing has become multi-channel and multi-dimensional.   The smart CMO must orchestrate the new marketing mix. That means they need to simplify messages sent to consumers through whatever channel is relevant to them i.e. digital, small screen, large screen, Point-of-Purchase.  And they need to determine which is most relevant for the target personas.   Moreover, the smart marketer should consider all the tools in his/her toolbox and select those tools that are most effective for getting the right message and INTERACTION with the customer.  

When I put this together, i find that the old model of 4P’s is antiquated.  I believe the new prediction is that good CMOs are now considering 7Ps in a holistic view: the original 4 (Product including product/service development, Price, Promotion, Placement (digital or traditional), and the new three consisting of Process (including customer engagement, referral and loyalty), People as brand messengers at point of purchase or via customer care, and Personalization (through technology and the internet).

The “traditional” 4Ps of marketing are well known.    In the day, marketing was about creating demand, and to a large degree it still is today.  But the focus was on selling a product to meet a need.   In general, promotion was based on advertising push.  The marketer’s mantra was to shout out the virtues of the product by mass advertising. To some who read the history books, the “soaps” on TV were called that because the consumer goods manufacturers such as Tide, All, and Fab were sponsoring and advertising on the TV shows aimed at the housewives and other stay at home folks. 

Pricing was simple.  Manufacturer’s set price and used a price point philosophy of good, better, best. Placement represented where the consumer could buy the product i.e. at the neighborhood store or a mass retailer or even door-to-door sales and home delivery. 

Because of technology such as the internet, and the movement away from a manufacturing to a service company, even the original 4 P’s have changed.

FROM                    TO

Product        à       Solution

Promotion    à       Information

Price            à       Value

Place           à       Access

Consumers and businesses want solutions to their problems and want to understand how the product/service will perform.  Due to the internet, both as catalogs of information and online reviews that are omnipresent through a myriad of sources, information has replaced pure promotion.   Certainly consumers and businesses want to find the right product at the right price, yet price by itself has been replaced by value with the value add sometimes being generated by service agreements and extended warranties.  And primarily due to the internet, place (distribution) has increased to a multi-channel access.  Think about the changes from the 1990s when e-commerce was first getting started to today.  Consumers and businesses now have electronic exchanges and other online venues from which to buy goods and services.   And now, coming full circle, we see Amazon opened its first brick and mortar store in Seattle.

Now let’s add the new three elements to the marketing mix.  First is the element of PEOPLE.    When I was head of marketing at US Cellular, we changed our brand and positioned our company using the tag line “the way people talked around here.”   Why did we do that?  In part, we recognized from our research in the late 90s and early 2000s that customers in our market wanted something more than what other cellcos offered.  We were not going to be the most technologically advanced (although our network and engineering were superb), nor were we going to cover the most customers in the country.  What our customers wanted was a relationship with our company, represented by our front line sales and customer service people.  They wanted a company they could trust.  At that point, we realized that people were the brand messengers and in our touchpoint marketing system, represented a way to affect the relationship and alter the buying habits of our consumers.  And it worked.  Our retention rate i.e. loyalty, was the best in the in the business.

The second new element is PROCESS. Many companies loathe the word process because they feel it is bureaucratic.  To me, process is the mechanism for repeatability. We want processes to help the customer in building its relationship with the company and also empower the employees to do their job to satisfy the customer.  Clearly, it is a tricky balance!   The processes today – mostly enabled by technology- relate to tools that help the company serve the customer.  

There is a dizzying array of tools that the marketer has to understand and use.  See Marketing Technology Landscape by Scott Brinker or some of the Lumascapes by Luma Partners.  Some of these tools include ways to mass customize a product or service to the customer needs.  Witness the new companies entering the market to build relationships with consumers and business buyers.  There are processes enabled by digital and web technologies that enable social engagement and the marketers use these new tools to build and maintain relationships with their customers.   This improves value through new services and interactive engagement in the eyes of the buyer. 

The final area is PERSONALIZATION. Several of the interviewees pointed out that understanding the customers’ persona is critical to segmentation.  Once you understand who they are, the company has to satisfy their unique requirements.  I have always been a fan of mass customization (read Joe Pines original work) or macro-niching as I use to call it 5 years before mass customization became vogue.   Personalization is easy today with technology.  You can see it when you buy a car.  Go into a BMW or Jaguar dealer in their store or online and the system will build the car for you.  Buy a house from Toll Brothers and you get a platform and options to tailor the house to your needs.   Go on the web and find a case for your smart phone and you can easily customize it with your school logo and colors.   Consumers want to feel special and that ensures a solid on-going relationship with their customers.

Marketing has changed and will continue to evolve over the next several years.  Clearly there will be a natural bonding between the CIO and CMO as marketing technology has become more important in defining the marketing mix.  While Ms. Whitler did not ask my prediction for 2016, I will share it with my readers.    I predict that marketing will be more about the customer and the great marketer will find the right combination of the 7 elements to build and sustain relationships with that customer.  At least I hope so. 

I would be glad to continue the dialog or share additional thought.  

Feel free to visit us on our web at www.clevelpartners.net or contact me at dfriedman@clevelpartnes.net.