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Owning the consumer—Getting to the core of the Apple business model

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  • Montgomerie, Johnna
  • Roscoe, Samuel

Abstract

This paper uses a business model framework to analyze the main limitations of Apple Inc. post-2003, a significant turning point in the company's history. As such, we move beyond an exclusive focus on what makes Apple unique or different by evaluating the mundane and out-dated elements of its business model. To do so, we examine the end-to-end supply chain, from source to store, to present a more holistic evaluation of the Apple business model. Drawing on the existing literature, we argue that the quintessential element of the Apple business model is its ability to ‘own the consumer’. In short, the Apple business model is designed to drive consumers into its ecosystem and then hold them there, which has been hugely successful to date and has allowed Apple to wield enormous power in the end-to-end supply chain. We demonstrate this through a detailed evaluation of Apple's physical and content supply chains and its retailing strategy. Moreover, we find that the very business processes that enable unparalleled corporate control bring with them new problems that Apple has thus far been unable, or unwilling, to adequately address.

Suggested Citation

  • Montgomerie, Johnna & Roscoe, Samuel, 2013. "Owning the consumer—Getting to the core of the Apple business model," Accounting forum, Elsevier, vol. 37(4), pages 290-299.
    • Handle: RePEc:eee:accfor:v:37:y:2013:i:4:p:290-299
    DOI: 10.1016/j.accfor.2013.06.003
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    References listed on IDEAS

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    1. Sorescu, Alina & Frambach, Ruud T. & Singh, Jagdip & Rangaswamy, Arvind & Bridges, Cheryl, 2011. "Innovations in Retail Business Models," Journal of Retailing, Elsevier, vol. 87(S1), pages 3-16.
    2. Jacobides, Michael G. & Knudsen, Thorbjorn & Augier, Mie, 2006. "Benefiting from innovation: Value creation, value appropriation and the role of industry architectures," Research Policy, Elsevier, vol. 35(8), pages 1200-1221, October.
    3. Jesus Felipe & Rana Hasan (ed.), 2006. "Labor Markets in Asia," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-62738-3.
    4. Schouten, John W & McAlexander, James H, 1995. "Subcultures of Consumptions: An Ethnography of the New Bikers," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 22(1), pages 43-61, June.
    5. Christoph Zott & Raphael Amit, 2008. "The fit between product market strategy and business model: implications for firm performance," Strategic Management Journal, Wiley Blackwell, vol. 29(1), pages 1-26, January.
    6. Ran Tao, 2006. "The Labor Market in the People’s Republic of China: Development and Policy Challenges in Economic Transition," Palgrave Macmillan Books, in: Jesus Felipe & Rana Hasan (ed.), Labor Markets in Asia, chapter 0, pages 503-558, Palgrave Macmillan.
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    Cited by:

    1. Ryan Rumble & Vincent Mangematin, 2015. "Business Model Implementation: The Antecedents of Multi-Sidedness," Grenoble Ecole de Management (Post-Print) hal-01183388, HAL.
    2. Georgia Katsifaraki, 2018. "Value creation in the market ecosystem: A Service-Dominant logic perspective," University of Cyprus Working Papers in Economics 14-2018, University of Cyprus Department of Economics.
    3. Lehman, Glen & Haslam, Colin, 2013. "Accounting for the Apple Inc business model: Corporate value capture and dysfunctional economic and social consequences," Accounting forum, Elsevier, vol. 37(4), pages 245-248.
    4. Ryan Rumble & Vincent Mangematin, 2015. "Business Model Implementation: The Antecedents of Multi-Sidedness," Post-Print hal-01183388, HAL.
    5. Biswas, Sumana & Ali, Ismail & Chakrabortty, Ripon K. & Turan, Hasan Hüseyin & Elsawah, Sondoss & Ryan, Michael J., 2022. "Dynamic modeling for product family evolution combined with artificial neural network based forecasting model: A study of iPhone evolution," Technological Forecasting and Social Change, Elsevier, vol. 178(C).
    6. repec:hal:gemwpa:hal-01183388 is not listed on IDEAS

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