A niche, to me, is focusing on a specific area of a service or a product sector. The specific niche needs to provide either a large volume of business or small volume with lucrative profit margins. One of the biggest niche strategy advantages is the ability to quickly become a dominant player in a certain area. By definition, there is almost always a limited pool of competitors in the market area, either for the area itself or the geographic limitation.
I believe that Apple has niche dominance, although it is the largest niche I had stumbled upon, it is still a niche, despite all its increasing popularity, its still only amounts to 12% of the personal computer industry. Apple's traditional enterprise niches includes graphics, advertising, and creative departments, and although the mac may always be a minority platform, it is a stable one. Throughout their history, apple has produced some of the most expansive personal computer on the market, and in the age of $300 Dell PC's, they still do. I can only assume (since Steve Joves is not a homeless person), that they have a certain clientele that they are relying on , that would continue to afford and pay for their pricey products. The iPhone, for example, is an excellent example, in a period when people are trying to figure out how to pay the rent, Apple were pushing to the market a $600 cell phone, touch or no touch, itunes or not, its still a cell phone to me, but to my surprise (and to Apple's as well) the iPhone sold 500,000 units in the opening weekend, still a niche? Absolutely. Most business people still use a blackberry, and the companies that provide it to them, will keep on doing so.
In the left corner, weighing much more than Apple, we (and by saying we I mean all of us) have the "good" old Microsoft, playing in the role of the big bad monopoly, taking the huge market share, as Windows still dominates 98% of the PC market. I would like to go back to the beginning and explain how was Microsoft's control became possible; back in 1981 (after creating Applesoft Basic for Apple Computer) they entered the OS market with MS DOS 1.0 (the first Macs didn’t appear until 1984). Within a few years Microsoft had over 90% percent of the OS market. The Microsoft monopoly was possible, in part, because of the incredible advantages of being first. And, the monopoly made Bill Gates the wealthiest man in the United States. Microsoft became a monopoly because they created the most universally useful standard for desktop computers. People don't understand much about computers, Microsoft took advantage of that, and created the most universal user friendly access to a cuputer, priceless, or is it?
I believe that Apple has niche dominance, although it is the largest niche I had stumbled upon, it is still a niche, despite all its increasing popularity, its still only amounts to 12% of the personal computer industry. Apple's traditional enterprise niches includes graphics, advertising, and creative departments, and although the mac may always be a minority platform, it is a stable one. Throughout their history, apple has produced some of the most expansive personal computer on the market, and in the age of $300 Dell PC's, they still do. I can only assume (since Steve Joves is not a homeless person), that they have a certain clientele that they are relying on , that would continue to afford and pay for their pricey products. The iPhone, for example, is an excellent example, in a period when people are trying to figure out how to pay the rent, Apple were pushing to the market a $600 cell phone, touch or no touch, itunes or not, its still a cell phone to me, but to my surprise (and to Apple's as well) the iPhone sold 500,000 units in the opening weekend, still a niche? Absolutely. Most business people still use a blackberry, and the companies that provide it to them, will keep on doing so.
In the left corner, weighing much more than Apple, we (and by saying we I mean all of us) have the "good" old Microsoft, playing in the role of the big bad monopoly, taking the huge market share, as Windows still dominates 98% of the PC market. I would like to go back to the beginning and explain how was Microsoft's control became possible; back in 1981 (after creating Applesoft Basic for Apple Computer) they entered the OS market with MS DOS 1.0 (the first Macs didn’t appear until 1984). Within a few years Microsoft had over 90% percent of the OS market. The Microsoft monopoly was possible, in part, because of the incredible advantages of being first. And, the monopoly made Bill Gates the wealthiest man in the United States. Microsoft became a monopoly because they created the most universally useful standard for desktop computers. People don't understand much about computers, Microsoft took advantage of that, and created the most universal user friendly access to a cuputer, priceless, or is it?
2 comments:
Good examples. I really liked you using Apple and I thought of writing about them myself before writing about Dell. Apple has been regarded for years as a top quality company with a small but steady (cult like?) following.
They have used how the public perceive them and smart marketing to push themselves into existing markets. Be it the Ipod who entered and took over the lead in a market with many types of personal music players (Walkman, Discman, mini disc, MP3 players, etc..). The Iphone which was introduced and made a huge splash in the mobile phone market.
Although they have become one of the big players with many types of products and billions in sales, they are still viewed as a specialty company.
Hi Nadav,
I tend to disagree with some of your assessment about Apple. I believe that Apple as a company gains it competitive advantage not from a niche dominance position but from product and service differentiation. They are unique company compared to its rivals, their operating system is different from Microsoft or Linux, and they derive profits from charging much higher prices from its competitors. Hence to that they are not in a niche position, they become leaders in the smart phone industry and more and more people are switching to Mac. As for your remark about Iphone Vs BlackBerry, the reason most companies use BlackBerry and not Iphone is because Apple didn’t open yet it phone to the application that will enable the Iphone to connect to the office mail server, but it will happen soon. All of that and puts Apple in a competitive advantage position due to its product and service differentiation.
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