Emergic: Rajesh Jain's Blog

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Ecosystems

August 16th, 2005 · No Comments

Fast Company writes:

An ecosystem beats a product because its collective of competitors can explore and invest in many more ideas than any single company can muster. For example, RCA might link a portable music device to satellite radio. If it fails, RCA bears the cost. If it succeeds, others will copy it. Simultaneously, Sony may push the option of adding more memory to its flash memory players. The bet may or may not pay off. But in either case, Apple on its own cannot match this capacity of the group to experiment.

In an ecosystem, all the players share some key components. Devices that can read the Windows version of digital music (WMA) all share the song base, and almost all can use subscription services such as Napster and Yahoo’s Music Unlimited. (Already, Napster and Ericsson have announced they’ll cooperate on a wireless version of Napster’s online music service capable of delivering tunes directly to cell phones.) Many non-Apple devices, by contrast, can’t use iTunes, just as iPods don’t work with WMA. This closed system made sense for the iPod’s launch phase, but once the music ecosystem has the capacity for far more experimentation — and that will happen any minute — even Apple, a profoundly innovative company, won’t be able to keep pace.

Tags: Management

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