Has the App Store really improved Apple's competitive position?
The assumption behind this question is all that Free investment by developers, VC's and the Press should have reduced Apple's costs of doing business while simultaneously increasing the costs of the competition.
So has it?
Let's scrape some data. A benchmark. Set shortly after the emergence of the App Store.
We fast forward and scrape last year's financials and we discover the hypothesis holds true.
Apple's cost of doing business has decreased as a % of sales revenues. On the other hand the competition is having to invest significantly more.
We also discover something interesting. The biggest losers spent significantly more money on R&D than they did on Sales and Marketing. They didn't lose innovation leadership they lost control of the narrative.
So we expand the data set. Go looking for patterns.
And we discover more than a few surprises that raise some more questions. Complex questions. Questions like: If the network economy changes everything, if the whole idea fuelling this wave of social disruption is for the prosumer to do the work for free and encourage their friends to join them, why does the sales and marketing spend by this new generation of disruptors appear to be so, well how can we put it gently?, so old school? So 20th Century?
Shouldn't they be spending significantly less - not significantly more - than the incumbents on advertising and marketing? Isn't the investment in the platform the main attraction? Isn't connecting with the platform the secret recipe for unlimited growth? The network effect? The price of being sticky?
And you strip the most obvious patterns out of this shake n' bake of M&M's to discover the insight. The magic rule.
Apparently innovation is a game of ideas and execution, played out in equal measure. Cheap ideas are expensive to execute. Great ideas pay for themselves.
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