Apple’s latest product launch (new OSX, iPads, Macs and iWork/iLife) came with a change in pricing for software. OS X and iWork and iLife and updates are now made available free on new Macs and, in the case of the suites, on iOS devices as well.
Recall also that iOS updates are now free as well and that OS X had been reduced in price from about $129 to $29 with Snow Leopard in August 2009 and to $19 with Mountain Lion in July 2012. The iSuites have also dropped in price over time so the pattern of evaporating software prices is long-running.
But how fast and what is the impact? The historic performance Apple’s Software business is not easily determined since it was always blended with additional businesses. Until September of last year, Software was reported as part of “Software and Services” and since then as part of “iTunes, Software and Services.” Some assumptions allow the following picture to be drawn:
One additional wrinkle to the Apple software story is that OS X and iWork/iLife are not all the software titles available. Apple’s software includes Pro apps as well as the non-free OS X server. The non-free software US prices are:
Using logistic curves to measure diffusion of innovations is a powerful method of analysis. However there are limits to what can be learned. The methodology helps in understanding how quickly a pervasive technology is adopted. It assumes that the technology “fills all available space” within a market. It therefore also assumes that whatever problems the technology solves are universal problems.
Put another way, if a technology is not universally useful, it tends to peak before a market saturates. This “universality” condition is in evidence when observing that pervasive technologies are adopted not only by all members of one national market but also all nations and through all means of government and regulation. In other words that the jobs that the technologies are hired to do are so important that they bulldoze any and all obstacles placed in the path of adoption.
The only difference is one of timing. Some regions are quicker than others. Institutionalized obstacles essentially defer rather than deter adoption. They impede rather than block.
And I am pretty sure that smartphones solve universal needs and their adoption will be nearly 100%. They also have fairly low impedance given the speed of adoption (50% penetration in most large markets seems to come in less than 5 years.)
That’s the story for the technology, but how value is captured is another story.
Who captures and how it’s captured are questions of commerce not economics. They are informed by competitive advantage and business models. The puzzle seems to be that individual companies don’t capture value in the patterns of Logistic curves. Or at least I don’t think they do.
Consider the graph below.
Asymcar 6: Peak Horse | Asymcar.
Steve Crandall brings a new perspective as a guest. Steve’s analysis of complex systems has given him a huge pool of wisdom into which we dip our dainty spoons.
We survey the interlopers seeking to replace many jobs that cars have traditionally done, from horses to bicycles, planes, trains and buses.
We dive deeper into a few earlier Asymcar topics including energy, regulation, infrastructure, power train evolution, societal changes, distribution networks, urbanization and consider the promise of electric bicycles.
Several innovation timing lessons temper our expectations for immediate improvements.
Finally, we revisit the emerging transportation information layers and how such services may change public behavior and the auto-ecosystem.
Asymcar 6: Peak Horse | Asymcar.
(Honorable mention to anyone who can identify the vehicle shown above.)
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The analyses of adoption of smartphones in the US and EU5 are remarkably consistent with each other. They also turn out to be consistent with the valuation of Apple.
I show the stages of adoption overlaid with the derivative of the Logistic Function and Apple’s enterprise value. The derivative of the Logistic Function shows the speed of adoption, peaking at the inflection point when adoption ceases to accelerate and begins to decelerate.
Horace and Moisés look beyond Apple’s rumored “watch” project to contemplate the real reasoning behind recent executive acquisitions from the world of high fashion (and what it signals). Is Apple now driving “lifestyle” more forcefully than ever? We examine redefinition, from public face to product, and Mac Pro to (possibly) iPod nano.
via 5by5 | The Critical Path #98: Kicking and Streaming.
Thanks to Symbian, the EU5 countries (France, Germany, Italy, Spain and the UK) had an earlier start in the conversion of phone usage from non-smart to smart devices. According to published comScore data, in July 2010 the EU5 were at 26.6% penetration of smartphones and the US was at 22.8%.
However, with the aid of mobile operator subsidies, by the beginning of this year, the US caught up. According to comScore EU5 reached 57% penetration in March 2013 while the equivalent figure for the US was 58%.
Using the logistic curve model introduced last week, it’s possible to get an approximate categorization of the adopters of the technology:
As with the previous analysis, the graph identifies the following dates:
Asymcar 5: A Faster Horse.
Of Phaetons, Coupés, Shooting Brakes, Broughams, Hackneys, Cabriolets, Landaus and Limousines. Horace and Jim step back in time to revisit the raison d’être for carriages and the emerging “horseless” carriage. We explore how evolution rather than revolution of networks influenced the technologies of transportation.
The question of foothold markets comes up and we explore which jobs-to-be-done affected early car design. The leap from these early jobs to the modern segmentation of the market is observed through the contrast between Henry Ford’s approach to the then agrarian market compared with Alfred Sloan’s portfolio strategy at General Motors.
The discussion morphs into a brief infrastructure review where the development of roads is compared to today’s telco operator business and regulatory models.
Finally, Horace and Jim drift into insurance and discuss the risk pooling implications of driverless cars.
Asymcar 5: A Faster Horse.
Gartner reported that PC shipments totaled 80.3 million units in Q3. Subtracting an estimated 4.4 million Macs yields an estimated 75.9 million Windows PCs.
This total is lower than the total shipped in the same period of 2008.
The graphs above show the
In yesterday’s post forecasting smartphone penetration I neglected to mention the exact subset of the US population being sampled. The analysis is based on comScore’s sampling which covers only those devices which are the “primary phone” for users over 13 years old and not provided by an employer.
In other words, the population being sampled is not meant to identify how many phones will be in use but rather what is the primary phone for those non-children who choose their own phones.
So the measurement that can be obtained from the S curve analysis is a subset of all phone users and will not identify exactly how many phones will be in use. Given that, this is what that subset looks like:
I drew a line showing the census data (and projection) for the US population and estimated what percent of that population might be