Apple's segmentation strategy and why it works

Mike Schramm
M. Schramm|10.02.10

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Apple's segmentation strategy and why it works
Here's a little interesting weekend reading from Mark Sigal on O'Reilly about "Apple's segmentation strategy." Sigal does a huge overview of Apple's direction over the last ten years, and in the end, argues that Apple has shirked the conventional wisdom of marketing products horizontally (making a special type of peanut butter for every customer, for example), and has instead segmented its products vertically (creating one product for a particular use case -- an iPad for reading, an iPod for listening, and an iPhone for apps). Apple is successful -- extremely successful, says Sigal -- not because it has become the biggest company in its various industries, but because it has thought carefully about how to sell products, and then sold them at exactly the right prices. And even when it's not right, says Sigal, Apple never makes a move that isn't strong and confident anyway. Even when the Apple TV is just a hobby, it's always just a hobby.

Sigal's point with all of this is that when Apple is doing what it does best -- targeting a specific market and overtaking it with quality -- the old rules of horizontal marketing and sales just don't apply. Apple is fine with not having the market share on smartphones, because it's not chasing those old goals. Apple doesn't add features or change products in a panic -- it added a camera to the iPod touch only when it was ready, and even then, it was careful not to make it better than the iPhone 4's camera and all of its selling points.

At any rate, Sigal's piece is a very interesting read. It's a little heavy for the weekend, maybe, but well worth going through to provide some insight on just why Apple remains so popular and profitable, even when other factors seem to rise against it.

[via MacStories]
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