Session 7 digitalization and platform strategy

© copyright 2008, youngjin yoo

IT and Platform Strategylessons learned from iPhone


world largest “mobile device” manufacturer


There are many better phones. But none of

them copied its success.

Why?


200,000


inherited iTunes eco-system


what is the secrete of its success?


it is NOT a phone


multiple meanings


from things to actions


from products to service


value is not in the product


value is co-created in action


re-thinking innovation strategy

Device Layer

Service Layer

Contents Layer

Network Layer

Physical transport

Logical transmission

Physical machinery

Logical device OS

a layered architecture of digitalized product


strategic choices


1. specialized appliance


closed vertical


higher integration


price-performance improvements


2. service strategy


de-coupling of device and service


Kindle as service


meaning mash-up


data pulverization


3. platform strategy


what is a platform?


a raised level surface on which people or things can

stand, usually a discrete structure intended for a

particular activity or operation

(Oxford English Dictionary)


something that others can run their applications

and services on


a family of products sharing same parts

(cars)


introducing variety(shopping mall)


allowing generativity(PCs and Internet)


has three elements


high varietylow reusability

low varietyhigh reusability

periphery

core

interface


platform = core + interface


complementarityvs.

uniqueness


key challenges


growing a pie


cutting the pie


how do you extract value?


requires third-party partners


eco-system


product strategy vs.

platform strategy


open vs. closed


features vs. enablement


fixed vs. generative


key design issues


1. design


deliberately incomplete design invites new

entrepreneurs


perfect incompleteness


generative platform


harnessing the creative power of

others


2. control


architectural control point


what is above and below


do we control all components?


internal and external modules


Google Andriod

Symbian

Apple iPhone

traditional mobile operators

economicappropriation

size of marketcore

peri

pher

y


3. heterogeneity


tipping effect


economy of scale: size


economy of scope:heterogeneity


translation of technical incompleteness into social heterogeneity


unbounded innovation


4. evolution


what if we want to share core?


Wintel= shared core platform


iTunesClosed Core


platform is for evolution


even core can evolve


Apple’s biggest challenge


the tyrannyiTunes + hardware


5.identity


the history of the phone


what are you designing now?


NTT DoCoMo


phone 67%e-mail 100%

web 67%


life style infrastructure


never ending journey


Apple Computer Inc.to

Apple Inc.

Session 7 digitalization and platform strategy

Education

Transcript of Session 7 digitalization and platform strategy