Apple-Nike -- A Lesson In Network Externalities
[Ted] Okay, somebody stop me before I turn this into an Apple blog. C'mon, guys, do something way cool interesting so I can write about it.
What's cool about the Apple-Nike announcement? Three things:
- The iPod is now an application platform for personal information. Okay, it could always store contacts and photos. But now it can log your miles, calories, and exercise time. This is just the latest in a long line of iPod as application platform," following in the footsteps of Duke University syllabus, radiologist medical image viewing, and museum tours.
- Apple locks up another huge brand. It began with BMW putting iPods in cars. Now Nike, the biggest brand in sports apparel is in Apple's marketing team. Talk about getting leverage out of your marketing dollar!
- More companies will now "get it" -- Apple's a good partner for commercial ventures. What's perfect about this deal is that any CMO can take the concept to their CEO and they'll get the benefit: Apple+BrandX = Good Stuff. The result will be more CMOs knocking on Apple's door.
All of these things showcase the power of network externalities -- unreasonable returns accruing to the company with the biggest reach and most partners. It's the rich get richer and the poor get poorer all over again.
Now here's the punchline. Nextwork externalities in application and developer support used to be Microsoft's biggest asset -- but now Google and Apple have taken on the mantle of most connected or biggest center of the universe.
Disagree? Let me know.
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