Apple's business inspiration to the hardware industry

The article “How to Reshape the Business Model” published in Harvard Business Review defines the business model as follows: Business model is how to create and deliver customer value and company value system.

Bob Higgins, the founder of Highland Capital, said in his 20-year experience of his career: Looking back at the development of the company, I believe that each failure is attributed to technology, and each success is attributed to the business model.

Then, in a short period of 7 years, the company’s market value increased from US$6 billion to US$235 billion, an increase of nearly 40 times. How did Apple innovate and use the business model? What implications did it bring to hardware companies? Apple’s model: “Combination of software and hardware. ”

The business model consists of four closely related elements: customer value proposition, profit model, key resources, and key processes. The customer value proposition and profit model clearly define customer value and company value, and key resources and key processes describe how to achieve customer value and company value.

Apple's profit path is "soft and hard": one is to sell hardware products to get a one-time high profit, and the other is to sell music and applications to obtain continuous profits from repeated purchases. It can be seen that, compared with electronic companies that rely on the profitability of production and sales of hardware products, Apple is more of a software "music and applications". This is Apple's "critical flow" Apple Inc. encourages innovative corporate systems, corporate culture and day-to-day management On the basis of the work, the "critical resources" CEO Steve Jobs's wise move, in 2003 Apple introduced the pod matching music management platform iTunes, in just 3 years, iPod + iTunes portfolio for Apple's revenue of nearly 10 billion US dollars, accounting for almost Half of the company's total revenue, and later things have proved once again that every time the value of iTunes is estimated to be wrong, the value of iTunes is immeasurable!

So why do consumers accept Apple's "soft and hard combination" model? This is to return to the first element of customer value proposition of the business model. It refers to the irreplaceable value that the provided product or service brings to customers. This is also the key to the success of a business model. For Apple, the core function of the iPhone is a communications and digital terminal, which integrates the functions of mobile phones, cameras, music players and PDAs. This multi-functional combination provides users with a single function beyond the mobile phone or iPod. Apple's APPStore has nearly 200,000 programs, which are also an important part of the customer's value proposition. In addition, Apple has done a great job in user experience. These are the customer value propositions provided by Apple.

Provide irreplaceable value for users; excellent design and over 100,000 music and application support make iPod, iPhone or iPad much more profitable than competitive products; , Those applications are also more valuable, hardware and software complement each other, appreciate each other, Apple's "soft and hard combination" model no one can be against, but also worry about profitability?