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Apple’s dilemma

When Apple announced it was getting into the low-price market for mobile phones, many people were surprised. I wasn’t. It seems like the typical move by a big industry leader that is looking to feed the beast (Wall Street and shareholders).

Will Apple succeed in innovating again, or will it follow the many market leaders who went down the slippery slope of mediocrity? As a passionate Apple user, I pray this move is limited to the mobile-device business and is not a strategic move for the entire company.

Can hoteliers learn from the moves Apple makes over the next few years? I think so.

In a previous post I mentioned the dilemma Four Seasons is faced with in deciding how to grow its business. Look at all the market segmentation at the major chains (Marriott, Hilton, Starwood, InterCon and Hyatt). Some have accomplished growth without losing the essence of their brands, while others have not been so lucky.

Another truth in this discussion is that “price” is one of the worst differentiators about a product or service. The airlines are a perfect example of how an industry sold on price and commoditized the entire offering. I believe in revenue management, but as a method to price fairly based on supply and demand — not as a way to gouge consumers at every turn or as a sole generator of demand.

Apple is entering a new chapter in its history. Lets hope it can innovate instead of replicate.

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