Ecosystem Math

Benedict Evans:

Certainly, this isn’t ‘Windows versus Mac all over again’. There are now 490m iOS devices in use, but PCs only hit that number in around 2000, long after Apple lost the last ecosystem battle. Apple sold 51m iPhones last quarter - total PC sales in 1995 were 59.5m. That is, the iOS ecosystem now is much bigger than the winning ecosystem back then.

Even beyond that, all the other dynamics are different — the smartphone market is not driven by corporate buyers who demand commodity product based on bullet points and don’t care about design or user interfaces, for example. The relative market share of an ecosystem is relevant, but it’s not the only thing that’s relevant. We need also to think about value share, engagement share, and all the other dynamics that drive the viability of an ecosystem. The assertion that an ecosystem with close to 500m users now and over 800m in a few years will not be viable because there’s another that’s bigger seems pretty simplistic. It can’t be taken for granted that any ‘winner takes all’ dynamics will work like that.

★ Thursday, 6 February 2014