network effects - a story here for the iPhone?
Found this article today (thanks to the BBC News website) Are network effects getting weaker? on Skrentablog which talks about how various “hip” tools for networking - myspace the key example are becoming less “hip”.
The web is a great leveller for people, allowing small companies to compete with the large companies, allowing independents bands to compete with Stadium bands etc. It also allows consumers to become much more flexible in their approaches and also less loyal. I am no marketer, but this must have a big impact on brand.
Sony is going through a hard time as a brand at the moment but it is likely to come out well, it has a long history and this contributes to a strong brand. Myspace though has no such brand, nor LinkedIn, they are new and well known, but people have no loyalty to them, especially when they are no longer “cool”. This must be something that Bebo and Facebook are thinking about, and must have something ot do with Murdoch’s decision to sell mySpace to Yahoo.
Anyway what has this to do with the iPhone - well I wonder how much we value brand nowadays, a lot of the belief in creating the market they need for the iPhone is that iPod is “cool”, so the iPhone will be too. How much cooler will you be if you have an iPhone? Is the iPod just enough cool without becoming a geek? Although having an iPod has been about fitting in and having the same, most phone owners want to have something unique - will this change?
In broad terms it makes me question if the iPhone does succeed it suggests that mobile preferences are starting to converge and that the currently diverse market will start to shrink based on consumer demand. I guess that is why they are charging for the device upfront, this will make people not upgrade their phone at the end of the 12-18 month contract. I can’t help but feel though that innovation is coming from Nokia, Motorola and the others and it won’t be the dream Apple want to come true. All of the manufacturers need this constant upgrading cycle to continue - there are not many other devices that have an 18 month life.
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