Owning the consumer: getting to the core of the Apple Business Model

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 this we examine the end-to-end supply chain, from source to store, in order to put forward a more holistic evaluation of the Apple business model. Drawing on the existing business model 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 as well as its retailing strategy. Moreover, we see that the very business processes that enable unparalleled corporate control bring with them new problems that Apple has so far been unwilling, or unable, to adequately address.