the business model of Apples itunes

the railway line fabric of apples itunesEvaluate the crease model of orc ticklish apple trees itunes. In particular you should address-1. To what extent can the itunes crease model be described as an eco dodge and what is the role of IT in enabling the collaboration between apple, its economic partners and consumers?2. How does itunes comp atomic number 18 with competitors?3. What new technologies could disrupt the catamenia mart by enabling a new make up of course model?Introduction clientele model in a basic sense deals with the method of doing melodic phrase line in order to m versioner(a) revenues by which a community sustains itself in the matched market place ( (Rappa, 2009).According to (Amberg Manuela) analysis on medication industries, there argon lots of media websites and companies following antithetic business models f everyen prey to file sh be-out to a faultls and peer-peer ne bothrks which allow consumers to illegally copy and sh be the content for free. As a consequence , companies bid orchard apple tree iTunes and Sony Connect constitute sleep together up with internet based business models based on pay-per-download and parasitical on the engineering science of the supplier for whom long-term customer relations are very crucial and customers are allowed to use the digital media content particularly with regard to technology of the supplier thus getting reward and benefitting from grassing hardware comp acents because the allow for of digital media content advances it. These business models replace the traditional business models which are generally based on selling physical media.This paper shows the fair understanding of apple iTunes business model for its dominance over the reliable medicament market and tries to describe the business model with discover to ecosystem and compares iTunes with its tell competitors in the market. The biological term ecosystem in this paper refers to the IT ecosystem. (Iansiti R ichards, 2005) describes IT ecosystem as entanglement of organizations that drives the creation, innovation and oral communion of Information Technology products and go. According to (Cusumano, 2008) the term Platform, is defined as Foundation product or key technology in a system like the PC or a web enabled electric cell phone and should have relatively open practiced user interfaces and easily licensing terms in order to get along different firms to contri besidese complementary product and services. So this can be accounted to an ecosystem around the broadcast and the political program becomes more valuable when the external entities creative more innovations around it. This should cause more users to adopt the syllabus and more complementors to join the network.iTunes as an ecosystemOnline medicine hit a new milestone afterwards apple calculating machine,Inc.(orchard apple tree) launched the iTunes application in January 2001 follwed by launch of 1st generation i Pod and 2 years later online medicinal drug stemma in April of 2003.The two businesses, the production of MP3 players and the online symphony shops were initially considered as different units and after the construct of new hardware iPod these two businesses were merged. iTunes is a software designed with an intuitive and user friendly interface and iPod is an hardware designed with an eye on fashion. These two together helped orchard apple tree to enter and succeed in the unison player market infact actually cross promoting the iPod hardware device. Because of their service and innovation orchard apple tree retain to produce in the online harmony field in a better way when compared to its key competitors like Dell, Sony and Samsung( (Li Chang). According to (Schonfeld, 2009) statistics, iTunes have nowadays sold 6 billion songs and 10 million different tracks are now available on iTunes. iTunes is software and iPod is hardware as said by (Li Chang) are two different busi ness units and orchard apple tree conjucts these two different products into one new business model. Using bionomics to analyze this model(iPod and iTunes) it has set a nice example for ecotone between two species to drive the music labor into new ecosystem. A unassailable platform is apparent from the combination of both the software and the hardware. The below shows the maturation of new ecosystem with combination of two stand-alone ecosystems.Most companies today inhabit ecosystemsloose net industrial plant of suppliers, distributors, and out bloodrs citers of related products or services providers of relevant technology and other organizations that affect, and are affected by, the creation and delivery of a compeverys own whirl.. as said by (Iansiti Levien, 2004) shows how business industry can be closely compared to biological ecosystem. want every individual in the biological ecosystem every organization in the business ecosystem shares the fate of the network as a who le regardless of that members apparent strengths. Comparing this with the orchard apple tree business, iPod is not really an progressive technology by itself but the go with creates a new ecotone for digital music where all the hardware(iPods) and software(iTunes) are related to it enhances its platform. According to (Koster, 2007) There is a continuous decline in the traditional sale of music firsts like retail music stores and the on- button music industries are restructuring themselves by merging with other partners to face the passing of revenues and to adopt with the new business strategies and models in the music industry to compete with the counterparts. Even in the digital music earthly concern today, legitimate music downloading is continuously changing. Initial music sites have very strong limitations on access catalogs of music, on what could be done with the downloaded music, number of copies, prison term limits, where to copy. Though orchard apple tree iTunes works on this model, it is successful in negotiating a very large music catalog from the four labels from its music site. He says that one large prefer and success for Apple is because of its hardware device iPod where normally music is stored and playback. The revenues from iPods sales continue to grow after the introduction of iTunes. Though Apple had gotten per rush from four major to store their music on its website for consumers to download by promising the copyright protection authority DRM, it is now planning to get away with DRM because they make the downloaded or recorded music very cumbersome for the consumer. This is straight forwards from (Johnson, 2009) article on web which says By the end of the quarter all 10 million songs leave alone be DRM free in iTunes and iTunes plus, said Phil Schiller, Apples senior vice president of worldwide product marketing. The intercommunicate witten by (Vitalari, 2009) clearly examines at the 21st century business model adopted by Apple to become successful in the market. He believes that business platforms are the root cause for cumulative business performance. Apples competitive business platforms is the main drive for innovations like community formation, mass collaboration, social net working, ecosystems, real time analytics, transparency etc. The iPhone App store was launched in July 2008 and today iTunes store is a total set of all forms of the digital media including music, games, software application, podcasts and video assets . As his explanation, the driving factors for Apple success and points out that the effective business platforms have few key ingredients iPods, iphones are not just products instead they represent individual business platforms and they create an ecosystem surrounding the product which means they create a common understanding for business transactions, technical specifications, interface standards and requirements. With the iPhone this includes all of the sub-contracted manufacturers, but more importantly it includes iTunes, the app store and app developers.This results in creating a transparency which enables and facilitates hundreds of participants to get together asynchronously and independently. This leads directly to the second point, which is that the business platform then helps to generate untold business analytics for the platforms owner.This is because of the elements of the business platform are networked and generates valuable information about the product, ecosystem and participants. Apple used this analytics to fix, improve and enhance the product and at long last delighting the customers. This in turn creates a community of practice surrounding the business platform, as the collaborators learn how to make better things.IT in enabling collaboration with partners and consumersAs a cofounder of Apple, Steve Jobss vision was to create new and different products to consumers and his notion of one person-one computer became visionary responsible for A pples reputation for innovation and mission became changing the world by bringing the computers to masses (Richard D Vohr, 1998).Apple came back with reinvention of personal computer with Macintosh in 1980 after igniting the computer industry rotation with inventing Apple II and it is commited to bring the best computing experience to all the fields starting from students, educators, professionals and consumers all around the globe with its innovative software hardware and internet offerings. This Apples mission statements indicates it focuses on innovation and personal computing experience( (Pearlson Saunders, 2009). Apple From 1987-1997 the comp either suffered due to some major inner(a) problems which affected the strategic leadership and its operations but after Steve Jobss second turn as CEO, company fixed operational problems and regains its innovative leadership dramatically. Few changes like manufacturing outsourcing and improving inventory became straight forward matchin g Dell, the industry leader.It moved to open industry standards rather than proprietary hardware interfaces that it had maintained for 15 years and thus in a minor way Apples product strategy became more open( (West Mace, 2007).As per ( (Apple Computer, 2006) Apple derives its competitive advantage again by its innovation plentiful iPod as an example. Apple entered the market with iPod in 2001and by end of fourth quarter of fiscal year 2005, iPods sales gained 33% of the total revenues. The factors which are accountable to their success and uniqueness are its computers based on its own operating system, which enabled further field of study of innovation.Its Mac OS operating system focuses on more simplicity and seen as graphically sophisticated. (West Mace, 2007)Recent trends have seen increasing strategy convergence between Apple and Microsoft .For its video game business, similar to its rivals Sony and Nintendo Microsoft buys the processor but designs its own hardware and soft ware without licensing them to others.Meanwhile Zune, Microsofts music players try to compete successfully to attain equality with Apples iPod. This shows Apple pursued a vertically integrated strategy in its music business. Vertical strategy is hotshot firms controlling the entire platform. Apple leveraging its Macintosh installed base to establish iTunes music store and structure iPod business on top of that and now iPhone business shows its expansion into adjacent markets and this loyal installed base makes any company easier to branch into a related market and this becomes a lesson for the other companies and Apple aims at consolatory the bellumer not just upgrading the costumers what they have today like the other companies do. When ATT decided to make offer to iTunes some(prenominal) other mobile industries criticized it for making too many concessions to Apple. Due to this offer ATT gets benefit from Apple in two ways , one is Apple increases the average monthly bills fo r the customers who switch from ATT to iPhone and the second one is it causes existing people to switch from existing carriers to ATT as its the exclusive carrier for iPhone( (The Apple iPhoneSuccesses and Challenges for the brisk sedulousness, 2008). digital Record Management systems are uses to encrypt the data does not allow illegal or non indorsement download of music and currently there are two main formats used for protect downloading of music. integrity is fairplay and the other is WMA. Fairplay is Apples proprietary technology where it secure the data encrypted in AAC( Advanced Audi Coding) format. WMA is Microsofts Windows media audio video convert platform. iPods can play only those stuff which are secured through fairplay format and Apple has refuse to lincense this fairplay to other retailers and so it is difficult for iPod users to download music from other retailers other than iTunes music store. But recently Realnetworks in US came up with a package which allows iPod users resident in US to play secures music from Realnetworkss music store Rhapsody. Apple got furious with this and accused Realnetworks of Hacker tactics and Ethics and reported to investigating on that for violating the intellectual rights. If apple is capable of putting an end to such violations then the indispensability of fairplay could be established( (The iTunes music store does competition law hold the key to closed shop?, 2004)According to insights into IDCs lifesciences by (Swenson Golden, 2005) Apple products are getting attracted by the life science researchers who actually migrated from linux and unix platforms because of the dual nature of Mac OS and its estimated historically that the life scientists have been twice or thrice more likely than the average computer user to Apples Mac platform as client computer thus representing attractive market for Apple. It has inform about its collaboration with airlines which includes Air France, Continental, Delta, United a nd KLM to integrate the in flight entertainment systems with iPod and taking the current entertainment provided in these airlines to a conterminous level for better travel experience( (Apple_Partners_with_Airlines_for_iPod_Integration, 2006). Sets Apple as an provoke example for not being an open witness model in its business strategies but is survey b of being a highly proprietary company from its earlier years. Now it has jumped into open source and have started projects both inside and outside its corporate firewalls. Apples OS X was a open source because it was based on Darwin. Its developer website said that Apples open source projects let key developers to customize and enhance Apple software and through this open source models it allows Apple engineers to collaborate with open source community to come up with better and more reliable products (Goldman Gabriel, 2005). On September 2007, Apple and Starbucks announced their collaboration on Apple letting costumers at Starbu cks wirelessly browsing, previewing, buying and downloading music from iTunes music stores at Starbucks on their iPods enhancing Starbucks retail coffee berry experience by helping customers with discovering new music instantly (Rothman, 2007). These examples shows how Apple is spreading the digital media revolution with its technologically profound products. Apple believes in fully integrated and completely digital learning environment which makes contents to move from from application to another and easy to collaborate and share ideas. Integration even reduces the institutionalise of technology challenge. So Apples IT team rather than spending time and money on how to get things working feels it worthwhile to dedicate the same on providing capabilities, innovations and resources for its institution (Everything Apple means everything just works).iTunes and CompetitorsThe majors competitors for Apple are Google and Microsoft Corporation and other competitors include Dell, Hewlett -Packard, Fujitsu, Samsung Electronics, Sony and Toshiba. Apple is designing software and hardware systems that delivers a greater user experience. Google is giving away operating systems to companies that license windows mobile today. Microsoft needs to think about their business models to compete in such a race where it probably has to decide whether it wants to compete in devices or operating systems and doing both is again at a risk which requires business models that are outside its midpoint competencies( (The Apple iPhoneSuccesses and Challenges for the Mobile Industry, 2008). There is a partial collision between Apple and RIM in smartphone business in which Apples device is a entertainment centric whereas RIMs product is a communication centric.Though distributively company is growing into each others space Apple is got the advantage because infrastructure establishment would be too large for RIM and beside that RIMs image is all wrong for that instead it is much better to defend and grow its market by adding more features and types of business communications to Blackberry. Comparing it with Nokia, Nokias challenges are more about challenges. They sell hundred of millions handsets every year at low costs. But without it, Nokia will be really hard pressed to match with the iPhones user experiences. Competitors such as Diamond multimedia, with its Rio brand portable media players were successful in the market until Apple displaced them and all the credits for such a domination goes to the business model of the company by offerings users a seamless music experience by combining its iPod devices with iTunes and online iTunes store. Users were taken away by its value proposition and Apple had to negotiate deals with the major record companies to establish the worlds largest online music library, there giving the twist for the company to earn most of its revenues by selling iPods while using the integration with the on online music store to protect itself f rom the competitors( (Osterwalder Yves, 2009).Smartphone users are going to increase in number in the next few years increasing in the PC functionalities supporting data services and voice and this is going to drive smartphone markets and Apple launching the iPhone which meets most of the required functionalities made it to third position in the global smartphone market in the third quarter of 2008. As there is rapid change in the technology there is introduction of new products with competitive prices, features and performance characteristics by all the competitors and out of all, mobile communication industry highly competitive with well funded and experienced competitors. For example in 2009, Nokia launched a new online media store in competition to Apple and this has resulted in price erosion which is now threatening to lessen the market share of the company( (DATAMONITOR, 2009).What new technologies could disrupt the current market by enabling a new form of business model.App le has become the leader in the music world revolution and it justifies for its closed source system, keeping its digital music platform proprietary making it incompatible by other system by saying that it was the main reason in convincing its music labels and artists allowing them to sell their songs through iTunes assure that those would not be pirated. But many analysts claim that that closed system was the reason for its previous distress in the computer business and Microsoft gained the masses with their open systems and now that is being seen as a essay in this highly cometetive technology world (Williard, 2005). According to survey done by Rubicon Consulting Inc on the Apple iPhone users shows that about 43 percent of the iPhone users feels that the device would be more elegant if there is a physical change to the iPhone by adding adding a keyboard or a keypad either by making the device smaller or larger and about 40 percent of the users complain about the web browser pro blems and the notably with those using Adobe flash and this shows that mobile data devices has always been segmented and its impossible for any single hardware design to please everyone. This could be an opportunity to Apple to increase its share by serving those customers by giving more importance to value propositions for their products which is again a part of business model and at the same time its an opportunity for its competitors to steal that share by addressing segments Apple failed in( (The Apple iPhoneSuccesses and Challenges for the Mobile Industry, 2008). Apple corporation itself has many problems but loss of competitive differentiation due to its attempt sytem is not counted in that because of its strong brand and its distinct operating system. For many of the other computer manufacturers cost and service are more vital for their differentiation than their products but for Apple this seems to be a out-of-the-way case says (Davenport, 1998). Disruptive Business Models are emblematic of our generation. Yet they remain poorly understood, even as they transform competitive landscapes across industries (Osterwalder Yves, 2009). ConclusionAccording to Sankar Dhinu, Apples senior manager of Emerging Technology, to be competitive in worlds high tech industry, one should make use of the facilities like available economic advantage of the manufacturing and distribution and Apple success goes with its interaction with dozens of trading partners , starting from resellers to distributors and OEM manufacturers which in turn helped it to form a global supply chain. Due to increased competition Apple is also facing many pressures and already working towards less limitation and freer access of digital music. Thus majors themselves are getting involved in those changes and Apples CEO Steve Jobs has called for an end to DRM because they make use of downloaded and recorded music very inconvenient and cumbersome for the consumer.( (Koster, 2007)BiblographyAmberg, M ., Manuela, S. ANALYSIS OF E-BUSINESS MODELS FOR DIGITAL MEDIA .(2006). Apple Computer. 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