session 7 digitalization and platform strategy
DESCRIPTION
This is a lecture after the eBook case discussion.TRANSCRIPT
© copyright 2008, youngjin yoo
IT and Platform Strategylessons learned from iPhone
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
world largest “mobile device” manufacturer
© copyright 2008, youngjin yoo
There are many better phones. But none of
them copied its success.
Why?
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
200,000
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
inherited iTunes eco-system
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
what is the secrete of its success?
© copyright 2008, youngjin yoo
it is NOT a phone
© copyright 2008, youngjin yoo
multiple meanings
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
from things to actions
© copyright 2008, youngjin yoo
from products to service
© copyright 2008, youngjin yoo
value is not in the product
© copyright 2008, youngjin yoo
value is co-created in action
© copyright 2008, youngjin yoo
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
© copyright 2008, youngjin yoo
strategic choices
© copyright 2008, youngjin yoo
1. specialized appliance
© copyright 2008, youngjin yoo
closed vertical
© copyright 2008, youngjin yoo
higher integration
© copyright 2008, youngjin yoo
price-performance improvements
© copyright 2008, youngjin yoo
2. service strategy
© copyright 2008, youngjin yoo
de-coupling of device and service
© copyright 2008, youngjin yoo
Kindle as service
© copyright 2008, youngjin yoo
meaning mash-up
© copyright 2008, youngjin yoo
data pulverization
© copyright 2008, youngjin yoo
3. platform strategy
© copyright 2008, youngjin yoo
what is a platform?
© copyright 2008, youngjin yoo
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)
© copyright 2008, youngjin yoo
something that others can run their applications
and services on
© copyright 2008, youngjin yoo
a family of products sharing same parts
(cars)
© copyright 2008, youngjin yoo
introducing variety(shopping mall)
© copyright 2008, youngjin yoo
allowing generativity(PCs and Internet)
© copyright 2008, youngjin yoo
has three elements
© copyright 2008, youngjin yoo
high varietylow reusability
low varietyhigh reusability
periphery
core
interface
© copyright 2008, youngjin yoo
platform = core + interface
© copyright 2008, youngjin yoo
complementarityvs.
uniqueness
© copyright 2008, youngjin yoo
key challenges
© copyright 2008, youngjin yoo
growing a pie
© copyright 2008, youngjin yoo
cutting the pie
© copyright 2008, youngjin yoo
how do you extract value?
© copyright 2008, youngjin yoo
requires third-party partners
© copyright 2008, youngjin yoo
eco-system
© copyright 2008, youngjin yoo
product strategy vs.
platform strategy
© copyright 2008, youngjin yoo
open vs. closed
© copyright 2008, youngjin yoo
features vs. enablement
© copyright 2008, youngjin yoo
fixed vs. generative
© copyright 2008, youngjin yoo
key design issues
© copyright 2008, youngjin yoo
1. design
© copyright 2008, youngjin yoo
deliberately incomplete design invites new
entrepreneurs
© copyright 2008, youngjin yoo
perfect incompleteness
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
generative platform
© copyright 2008, youngjin yoo
harnessing the creative power of
others
© copyright 2008, youngjin yoo
2. control
© copyright 2008, youngjin yoo
architectural control point
© copyright 2008, youngjin yoo
what is above and below
© copyright 2008, youngjin yoo
do we control all components?
© copyright 2008, youngjin yoo
internal and external modules
© copyright 2008, youngjin yoo
Google Andriod
Symbian
Apple iPhone
traditional mobile operators
economicappropriation
size of marketcore
peri
pher
y
© copyright 2008, youngjin yoo
3. heterogeneity
© copyright 2008, youngjin yoo
tipping effect
© copyright 2008, youngjin yoo
economy of scale: size
© copyright 2008, youngjin yoo
economy of scope:heterogeneity
© copyright 2008, youngjin yoo
translation of technical incompleteness into social heterogeneity
© copyright 2008, youngjin yoo
unbounded innovation
© copyright 2008, youngjin yoo
4. evolution
© copyright 2008, youngjin yoo
what if we want to share core?
© copyright 2008, youngjin yoo
Wintel= shared core platform
© copyright 2008, youngjin yoo
iTunesClosed Core
© copyright 2008, youngjin yoo
platform is for evolution
© copyright 2008, youngjin yoo
even core can evolve
© copyright 2008, youngjin yoo
Apple’s biggest challenge
© copyright 2008, youngjin yoo
the tyrannyiTunes + hardware
© copyright 2008, youngjin yoo
5.identity
© copyright 2008, youngjin yoo
the history of the phone
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
© copyright 2008, youngjin yoo
what are you designing now?
© copyright 2008, youngjin yoo
NTT DoCoMo
© copyright 2008, youngjin yoo
phone 67%e-mail 100%
web 67%
© copyright 2008, youngjin yoo
life style infrastructure
© copyright 2008, youngjin yoo
never ending journey
© copyright 2008, youngjin yoo
Apple Computer Inc.to
Apple Inc.