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February 1, 2010 | Neal | No commentI’ll admit that this post is a little off topic compared to what we usually write about here at the blog but it is an excellent post for everyone who makes the easy assumption that the only thing standing between your favorite non-Apple consumer electronics manufacturer and great innovations is their abilities in the design studio. It is valuable to remember that competition has many facets and that it isn’t only the obvious parts of the competition that helps tilt the final outcome in the favor of one competitor or another.
By pricing the iPad at about $500 on a good day, Apple has forced Asia’s hand. The company clearly did plenty of deals with Foxconn and the rest of the suppliers down the line and while folks like LG are making a mint on screens and other components, they have essentially closed the spigot overseas leading companies like Asus and Acer to announce that they won’t try to compete.
This also explains why other companies just couldn’t get past the resistive touchscreen for so long. Suppliers knew that Apple was sniffing around and so they kept prices high. As a result we had almost two years of me-too garbage coming out of Samsung, Sony, and Nokia until – at long last – the smaller touchscreens are ubiquitous.
Apple has the industry by the tail. Heck, they even have the news cycle by the tail as evidenced by the fact that everyone – including this site – is still writing about Apple. But it’s not all roses and champagne when Apple launches a new product and everyone else – Lenovo, Dell, and the like – knows it but refuses to talk about it.
If you want to understand the nature of “first mover advantage” this is it. Branding folks will tell you about the power of mindshare and other such intangible benefits but by leading the market from a design standpoint, Apple can proactively make deals with component manufacturers and ensure that they have a serious lead on the competition – especially when it comes to those coveted “early adopters” who are willing to pay full price for new toys. The big question is why Amazon, Sony, and the others who put out eReaders first couldn’t achieve similar benefits before Apple entered the market.
Tags: Amazon, Apple, Digital, eReader, gadgets, iPad, Kindle, Sony
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