New Markets Blog

The business model disrupting Apple

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Apple -- famed for its engineering and marketing -- is less renowned for its innovative business models.  Historically that wasn't a problem; the company sold high volumes of a small number of products that were ingeniously engineered but not very expensive to build.  It managed to do this at a high margin, enabling its iPhone to grasp over 50% of the profits in the entire mobile handset industry.

Yet this model is highly dependent on two factors: 1) the iPhone, which makes owning the full suite of Apple products much more appealing and 2) big subsidies from mobile carriers that make the iPhone price-competitive with Android and Windows offerings.  A French upstart is starting to break that model, with dramatic results.  Read more in my piece for Forbes. 

Stephen Wunker is Managing Director of New Markets Advisors and author of Capturing New Markets: How Smart Companies Create Opportunities Others Don't.  Read more of our perspectives on telecom.