Apple iPod/iTunes Business Model | Business Model Navigator

Overview:

The iPod is a line of portable media players and multi-purpose pocket computers designed and marketed by Apple Inc. The first version was released on October 23, 2001, about 8 1⁄2 months after the Macintosh version of iTunes was released. As of July 27, 2017, only the iPod Touch remains in production. Before the release of iOS 5, the iPod branding was used for the media player included with the iPhone and iPad, a combination of the Music and Videos apps on the iPod Touch. As of iOS 5, separate apps named 'Music' and 'Videos' are standardized across all iOS-powered products. While the iPhone and iPad have essentially the same media player capabilities as the iPod line, they are generally treated as separate products. During the middle of 2010, iPhone sales overtook those of the iPod.

Industries:

Information Technology

Hardware

Similar firms (based on pattern co-occurrence):

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6 shared patterns

2 shared patterns

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3 shared patterns

2 shared patterns

3 shared patterns

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2 shared patterns

3 shared patterns

Business Model Patterns:

Digitization

How they do it: With the iPod and the iTunes store, Apple digitized the music industry. Apple enabled users to download a greater choice of music than any physical store can have, anywhere and anytime. Having the music in electronic format eliminated cost of one additional copy of a song completely.

Flat Rate

How they do it: With the establishment of its music streaming service Apple Music, Apple enables customers to stream an unlimited amount of music for a fixed monthly fee.

Leverage Customer Data

How they do it: Customer data in the iTunes store and in Apple Music is used to give the listeners individualized recommendations of what other music might be interesting to them.

Long Tail

How they do it: Apple offers its customers a wide variety of music in its iTunes store. Revenue with individual songs might be small but through the sheer mass of songs users download it generates a substantial amount of revenue.

Razor And Blade

How they do it: Although the iPod is not given away for free, Apple uses it as a platform to access to much more revenue opportunities through apps and other services beyond the pure hardware revenue.

Revenue Sharing

How they do it: The revenue from iTunes purchases goes partly to Apple and partly to the rights-owner.

Solution Provider

How they do it: The Apple iPod in combination with iTunes offers a full solution for the customer’s music consumption, ranging from the physical device to listen to music portably to the actual content to be put on the iPod.

Subscription

How they do it: Apple Music, which allows the customer to stream an unlimited amount of music for a fixed fee evrey month is based on a subscription model.

Two-sided Market

How they do it: The iTunes functions as a two-sided market with artists, producers or other rights-owners on the one side and customers / users on the other side.

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