Will My Data Be the Ultimate Ecosystem Lock-in?
Last week I wrote about how it has never been easier to switch from an iPhone to a Samsung Galaxy S10+ and, you can imagine, my positioned generated quite a bit of dialogue from both camps. I had readers pointing out that Samsung has been ahead of Apple in several big tech trends over the years. I also had readers highlight how giving up on the iPhone would mean giving up on the whole Apple ecosystem. Depending on where you sit there are points to be made defending either side of the argument.
As I was reading through those comments, it became apparent to me that we are now at a point in the market where you have users who still see smartphones as their only device and users who view their smartphone play an essential role in a portfolio of devices on which they rely on in different ways throughout their day. The latter kind of user is usually an early adopter who sees the smartphone as the glue that keeps that portfolio of products together without being the most crucial piece of the puzzle at every moment in time. These are users who are happy to go for a run with their wearable or ask their smart speaker about their upcoming appointments without feeling the need to always reach for their smartphone first. Depending which group you belong to you might find it easier or harder to switch your phone.
The Shift from Apps to Services
The market has changed a lot from when smartphones first got in our pockets. After bringing us apps, smartphones took time away from other devices we had been using to become our one-stop shop for all our computing needs, from connecting to the internet, taking pictures, listening to music, watching videos, making payments and the list goes on. Over the past couple of years, although on average, we still spend most of our time on a smartphone we have also come to share more of our computing needs across other devices.
More importantly, many of those apps that made the smartphone the device we came to love more than any other device in our lives became full-fledged services across devices and often across ecosystems. This is what makes moving from one ecosystem to another much easier than it used to be, as most services offer a parity of features and experiences no matter what they run on. At the end of the day users are what they want and they will take them wherever they are. Ecosystem owners are well aware of this, which is why we have seen an increase in the number of “services” that they provide directly through hardware they often brand and control. I put services in quotation marks because what they deliver is not always a service in the sense of something you can subscribe to but more in the sense of offering a helping hand in an area, we, as users, need. Digital Assistants are an excellent example of a service that we do not subscribe to, but that is in effect a service aimed at providing assistance throughout our day. AI infused Microsoft Office, or Google G Suite are another excellent example of a service, in this case, a service, AI, within a service.
The importance of these services has become such that we carefully consider what we give up when we move from one ecosystem to another as some of these, due to the provider’s business model, are not available on other platforms, or they deliver a sub-par experience.
Addressing Pain Points Creates Stickiness
The more we use these services, the more information we give away. This is valuable information for the service provider because, even when they do not directly monetize from it, it helps them improve their services in such a way that draws us in even more creating a vicious circle.
What has been fascinating for me to watch, has been seeing ecosystem owners move beyond services that are directly related to their core business and start offering services that are addressing pain points in areas where technology has yet to play a significant role.
Amazon is doing it with brick and mortar retail, Google with Photos and Apple has been particularly aggressive in doing so in health and banking. When you enter areas that are so personal and sensitive as health and banking, and you can offer a service that puts the user first, you could enter a new level of loyalty that transcends hardware.
It used to be that Apple’s software and services added value to the hardware. You bought the hardware and that software and services added value to it which helped justify the financial investment you were making on a product that others often had on the market for less.
As Apple moves into more life-critical services like banking and health that they can monetize directly or indirectly, the value must be found in the service itself which will raise the bar for what Apple delivers. If we add the fact that these services will use some of the most personal data a user can generate, data they trust Apple to keep both private and secure, it is hard to think that a user will move gingerly away from the hardware that hosts such services.
Are we moving to an offering where iOS users no longer pick Apple hardware because of the hardware, but they subscribe to services despite the hardware not being the best option in the market? One might argue that this would not be the first time, that iTunes and iPods are an example of the priority users put on the service back when we did not have smartphones. What is different now is that we are dealing with much more important data than our music collection. While our experience might be best on Apple hardware, the very nature of the data linked to these services will drive our need always to want access to it no matter the hardware and ecosystem. After all who can control what hardware their doctor or bank is using? If you agree with me that this is a possibility, then it is easy to see how for some services it is not a case of Apple making them available on other platforms to be successful. Instead, Apple must make it possible for users to access the data behind such services anytime anywhere for the user who will become loyal to Apple, not Apple’s hardware.