Apple's Blue Ocean Strategy

Competing with Nobody

September 3, 2020 by Justin Morante

Since its inception, Apple has managed to create a brand based on innovation. It's no secret that innovation is one of the keys to survival in the tech world. And, because it's no secret, virtually every tech company on the planet earnestly seeks to innovate. So why do some succeed where others fail? The answer might be found in a concept known as "Blue Ocean Strategy." Over time, almost every market becomes saturated by what are known as "red oceans." Take the wine industry for example. Most wine companies create basically similar products. They try to compete on quality and reputation. This makes for a vast red ocean, easily seen by the overwhelming selection of wines at your local grocery store.

Enter a company like Yellowtail. When Yellowtail came along, it didn't compete with the existing wine market. Instead, it intentionally appealed to a younger, "non-connoisseur" demographic, by offering a more inexpensive, fruitier tasting wine, which ultimately created a brand new market space. This is what is known as the elusive "blue ocean." In the tech world, Apple has managed to do much the same thing on more than one occasion. From it's earlier products such as the Apple II and the Macintosh, to twenty-first century innovations like the iPod and iPhone, Apple has managed to reinvent itself several times over, and has opened up several brand new markets in the process.

New Blue Oceans

One of the biggest challenges for Apple has been the need to stay vigilant. As competitors have sought to imitate them and/or capitalize on their success, the need for new market creation has not diminished. While new product development will certainly continue, one of the ways that Apple seems to be creating a new blue ocean today is by combining products. Today, customers can link all of their Apple products in one home network (phone, tablet, PC, watch, television, etc). This in itself can be seen as a market space, a "home network" market if you will. With its practice of implementing "closed systems," one could argue that Apple has positioned itself to corner this market space in the years to come. For more on this topic, check out episode 8 of The While Loop entitled, "Bobbing for ARM Apples in a Blue Ocean."