Wednesday, April 15, 2015

Apple’s Blue Ocean

The Blue Ocean Strategy article, while providing a great deal of insight into market creation, did not provide much detail on the possible hurdles faced by companies employing the strategy.  Creating a new market where competition is irrelevant seems like a fantastic avenue to success.  But while reading the article I couldn’t help but think, what if the consumer doesn’t ‘get it’?  If a consumer expects elephant performers at a circus, what will they think when they learn that no animals are part of the show?  Will they buy tickets?   

Apple has arguably created numerous ‘blue oceans’, but the most impressive may have been the introduction of the iPad.  The tablet market had not yet been developed, and like many users, I initially didn’t see the need for an additional portable electronic device.  At the time I carried a personal smart phone and a laptop and smart phone provided by my employer.  I also had three personal laptops and a Kindle collecting dust in my home office.  The idea of adding another device with essentially the same functionality seemed unnecessary.   

Apparently I wasn’t alone.  In January 2010, Wired Magazine reported just prior to the release of the iPad that 71% of readers polled agreed that “my laptop and smart phone already have me covered.”  Wired Magazine readers are a tech-savvy crowd.  If they didn’t see the need, who would?  What task could possibly be handled by a tablet that isn’t already handled sufficiently by my laptop and smart phones?        

Like many times before, Apple knew what consumers wanted before consumers knew themselves.  Apple had been developing the tablet since 1983, and the time was apparently well spent.  Described by beta-testers as “a first generation iPhone that met its match with a rolling pin,” the iPad was seen as “a slate-like substitute for magazines, newspapers, and books.” 

But the slick design also handled web surfing and gaming in a way that was impressively immersive to the user.  Rather than viewing websites through a traditional browser encumbered by a URL bar and various buttons along the screen perimeter, media viewed on the iPad fills the screen.  The thick black bezel makes the iPad seem to disappear, and to the user it feels like holding a monitor or TV in her hand (and a slick one, at that!).  Gizmodo puts it perfectly, “The magic of the iPad […] is that the iPad itself kind of fades away, so it's just you and whatever you're doing on it.” 

I eventually purchased the iPad 2 and after owning it for just a few days I finally ‘got it’.  The iPad isn’t meant to provide additional functionality not found in smart phones or laptops.  Anything done on a tablet can be done on a laptop or smart phone.  But it is the better medium for various tasks.  I can watch TV or movies on planes or hotel rooms or, well, anywhere.  I can play immersive games in the back of a cab in traffic. and the world just drifts away.  I can pipe my iTunes playlist to my Bluetooth speakers while referencing a recipe on my iPad in the kitchen. 

And, again, it seems I’m not alone.  The iPad sold 7.3 million units in Q1 2011.  This year, a whopping 21.4 million iPads were sold in the first quarter.   

The Wired 2010 survey does seem to demonstrate that consumers were skeptical, at least initially, of the need for this new blue ocean.  But they were quickly won over when the iPad hit the market.  While consumers may require time to ‘buy in’ to a new concept, the marketplace of the blue ocean is completely void of competition, providing plenty of opportunity to win over consumers and create profit. 

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