Monday, August 31, 2015

Who does the iPhone compete with? Apple’s latest alliances suggest new competitors

We have just received the news that Apple and Cisco have become partners, with the goal of better integrating iPhones with corporate networks in general, and specifically with Cisco products for visual conferences over videolink or web services. This is short time after Apple became partners with IBM to create apps (software) for the workplace. While the IBM partnership is mostly oriented toward the large corporations that IBM serves, Apple also has many partnerships in which it either helps develop apps or helps app-developing firms connect their offerings to give greater functionality for small businesses.

Clearly, Apple is interested in becoming more of a company that serves businesses, in addition to its current strength in serving consumers. The opportunity for Cisco, IBM, and other partner firms is that so many employees own iPhones, often as a result of their own choice rather than a company purchasing policy. Integrating the iPhones deeper into what the company does can be an opportunity for simple tasks like meetings over a distance, and for more complex processes like scheduling, staffing, and sales. From the viewpoint of firms that provide these services now, the iPhone looks like a Trojan horse – something that got into the business because it looked nice and harmless, but is now ready to become a potent competitor.

So who does the iPhone compete with? The interesting feature of these competitive moves is that an iPhone (in fact, any smartphone) can be programmed and networked in so many ways that it is very unclear where the limits are. Both established Apple partners and new firms can apply their creativity to the task of seeing what business activities can be improved by integrating iPhones. Already we know that any video-conference service other than Cisco should be worried because the link between Apple and Cisco link takes advantage of the complementary business presence and software/hardware of Cisco and personal presence and software/hardware of Apple. But that is just a starting point. The next steps can happen very quickly, because starting new app-based businesses these days can be done within a few weeks.

Network Advantage in competition among firms comes from placing the firm in a position where it can benefit from its network of partner firms. It is not surprising that Apple is working hard to get network advantage, because their business is based on products that connect to networks and let their owners get personal network advantages.

More to read:
Clark, Don and Daisuke Wakabayashi. 2015. Apple, Cisco Unveil Business Partnership. Wall Street Journal, Aug. 31 2015.