Just a quick post based on Ben Thompson's excellent article titled "How Apple Creates Leverage, and the Future of Apple Pay," and also based on Exponent #24, a podcast with Ben Thompson and James Allworth. In his article and podcast, one of Ben's main points is that Apple won't be disrupted because:
- There will always be a subset of consumers willing to pay for the best user experience.
- This subset will always prefer the best user experience over something that's just "good enough."
- This enduring preference protects Apple from disruption.
Thompson says Apple uses the best user experience to leverage important new partnerships that allow it to deliver an even better user experience (like it's done with Apple Pay), which then puts more distance between Apple's user experience and what's typically been considered good enough. This creates a virtuous circle, with a better user experience leading to more leverage which then leads to more partnerships which then leads to a better user experience (and so on).
By widening the gap between its "best in class" user experience and what's typically been considered good enough, Apple changes consumer expectations of what's good enough, shifting Christensen's product improvement trajectory upward. See Concepts page and discussion of Clayton Christensen.
By continually focusing on the best user experience (through partnerships, an integrated approach to products/services, and a job-to-be-done approach to product design), Apple repeatedly raises consumer expectations of what's good enough. Apple focuses on the future state and future consumer expectations, not the present state and what the market currently considers good enough. This seems like a good way to skate to where the money will be.
The author owns stock shares of Apple.