Value Creation at its best.

Great article at The Next Web about how Apple’s long term strategy will likely dominate the tablet market.

They project a ten year dominance, similar to the experience of the iPod. In the article they provide, what I believe, are 7 compelling reasons for their dominance.

1. They are outselling (not just out shipping) by a factor of 10 to 1.
2. Tablets are not smartphones.  So competitors have to compete with Apple on device profitability alone.  In the tablet market there are no data plan subsidies to back them up.
3. Apple’s 336+ stores provide a high touch environment to learn whether to buy an iPad.  Moms and grandparents will be converted more by that experience than a tethered tablet at a Best Buy or WalMart.
4. Apple has the profit and cash reserves to invest heavily in the latest technology (solid aluminum skins) that make their designs more elegant and user friendly commanding higher prices and better experiences.
5. Apple, based on the above, has altered the relationships with suppliers, obtaining agreements that lock in their margins and lower cost advantage on the new technologies they fund.
6. Apple’s ecosystem.  Mac, iPod, iPhone, iPad.  Once they pull you into the fold it’s hard to leave as the devices work so well together.  This phenomenon is sure to accelerate with the advent of the iCloud in the fall.
7. It works better.  Technically the user experience is smoother with the iPad.  They give reasons why the touch interface works better based on the underlying technologies and iOS software.  Watch for improvements in the next iPad.

It’s a compelling read on value creation at its best and the execution of a business model strategy.  A must read for all executives about how to pull all the pieces together into a cogent sustainable differentiation strategy.

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