Question

Chapter 3 Information Systems, Organizations, and Strategy 103 INTERACTIVE SESSION: TECHNOLOGY IS THE IPAD A DISRUPTIVE TECHNOLOGY? Tablet computers have come and gone several timesdistribution. Amazon has committed itself to offering before, but the iPad looks like it will be different It the lowest possible prices, but Apple has appealed has a gorgeous 10-inch color display, a persistent Wi publishers by announcing its intention to offer a Fi Internet connection, potential use of high-speed tiered pricing system, giving publishers the opportu- cellular networks, functionality from over 250,000nity to participate more actively in the pricing applications available on Apple's App Store, and the thir books Apple has agreed with publishers to ability to deliver video, music, text, social networking charge $12 to $14 for e-books, and to act as an agent applications, and video games Its entry-level price is selling books (with a 30% fee on all e-book sales) just $499. The challenge for Apple is to convince potential users that they need a new, expensive gad- arrangement, but worry about long-term pricing get with the functionality that the iPad provides. This expecttions, hoping to avoid a scenario where is the same challenge faced by the iPhone when it readers come to expect $9 99 e-books as the standand was first announced. As it turned out, the iPhone rather than a book distributor Publishers like this Texthook publishers are also eager to establish was a smashing success that decimated the sales of themselves on the iPad. Many of the largest textbook traditional cell phones throughout the world Will the publishers have struck deals with software firms like iPad do likewise as a disruptive technology for the ScrollMotion, Inc to adapt their books for e-book media and content industries? It looks like it is on its aders. In fact, Apple CEO Steve Jobs designed the way iPad with use in schools in mind, and interest on the The iPad has some appeal to mobile business users, but most experts believe it will not supplant part of schools in technology like the iPad has been strong ScrollMotion already has experience using laptops or netbooks It is in the publishing and media industries where its disruptive impact will first be felt the Apple application platform for the iPhone, so the company is uniquely qualified to convert existing iles provided by publishers into a format readable by The iPad and similar devices (including the Kindle the iPad and to add additional features, like a dictio- Reader) will force many existing media businesses to ry,glossary, quizzes, page numbers, a search func- change their business models significantly. These companies may need to stop investing in their traditional delivery platforms (like newsprint) and increase their investments in the new digital platform. The iPad will spur people to watch TV on the go, rather than their television set at home, and other hit products from Apple, consumers are more to read their books, newspapers, and magazines online rather than in print tion, and high-quality images Newspapers are also excited about the iPad, which represents a way for them to continue charging for all of the content that they have been forced to make available online If the iPad becomes as popular as likely to pay for content using that device. The successes of the App Store on the iPhone and of the Publishers are increasingly interested in e-books Tunes music store attest to this But the experience as a way to revitalize stagnant sales and attract new readers. The success of Amazon's Kindle has spurred media reason to worry. The iTunes music store growth in e-book sales to over $91 million wholesale changed the consumer penception of albums and in the first quarter of 2010. Eventually, e-books could music bundles Music labels used to make more account for 25 to 50 percent of all books sold Amazon, the technology platform provider and the largest distributor of books in the world, has exercised its new power by forcing publishers to sellpreferring to purchase and download one song at a e-books at $9 95, a price too low for publishers to profit. Publishers are now refusing to supply nevw books to Amazon unless it raises prices, and Amazon are unread is starting to comply of the music industry with iTunes also gives all print money selling 12 songs on an album than they did selling popular singles. Now consumers have drastically reduced their consumption of albums, time. A similar fate may await print newpapers, which are bundles of news articles, many of which Apple has also approached TV networks and movie studios about offering access to some of their top shows and movies for a monthly fee, but as of yet the The iPad enters this marketplace ready to compete with Amazon over e-book pricing and 104 Part One Organizations, Management, and the Networked Enterprise bigger media companies have not responded to Apple's overture. Of course, if the iPad becomes sufficiently popular, that will change, but currently media networks would prefer not to endanger their strong and lucrative partnerships with cable and satel. ouroes Ken Auletta, "Publish ot erish, The New rker, April 26, lite TV providers. (See the chapter-ending case study.) 2010 Yukari Iwatani Kane and Sam Schechner, Apple Races to distribute), which were designed to sell devices are a thing of the past. In this case of disruptive technol- ogy, even the disruptors have been forced to change their behaviors Strike Content Deals Ahead of IPad Release," The wall Street Joarnal, March 18, 2010, Motoko Rich, Books on iPad Offer Publishers a Pricing Edge, The Neae ork Times, January 28, 2010 Jeffrey A. Tachtenberg and Yukani Iwatani Kane, "Textbook Firms Ink Deals for iPad The Wall Street Journal, February 2, 2010, Nick Bilton, Three Reasons Why the IPad Will Kill Amaaon's Kindle The New York Times, January 27, 2010 Jeffrey A Thrachtenberg And what about Apple's own business model? Apple previously believed content was less impor- tant than the popularity of its devices. Now, Apple understands that it needs high-quality content from all the types of media it offers on its devices to be truly successful. The company's new goal is to make Apple Tablet Portends Rewrite for Publishers The Wall Stree deals with each media industry to distribute the content that users want to watch at a price agreed toJanuary 26, 2010, Yukari twatani Kane, Apple Takes Big Gamble on by the content owners and the platform owners (Apple). The old attitudes of Apple Rip, burn, Journal, January 26, 2030, Brad Stone and Stephanie Clifford, "With Apple Tablet, Print Media Hope for a Payday." The Nn. ร1rk Tana, New iPad,' The Wall Stree Journal, January 25, 2010, and Anne Eisenberg, "Devices to Take Textbooks Beyond Test, The Neue York Times, December 6, 2009 CASE STUDY QUESTIONSMIS IN ACTION I. Evaluate the impact of the iPad using Porter's Visit Apple's site for the iPad and the Amazon.com site for the Kindle. Review the features and specifica- tions of each device. Then answer the following questions competitive forces model. 2. What makes the iPad a disruptive technology? Who are likely to be the winners and losers if the iPad becomes a hit? Why? 1. How powerful is the iPad? How useful is it for 3. Describe the effects that the iPad is likely to have reading books, newspapers or magazines, for surfing the Web, and for watching video? Can you identify any shortcomings of the device? on the business models of Apple, content creators, and distributors 2. Compare the capabilities of the Kindle to the iPad Which is a better device for reading books? Explain your answer 3. Would you like to use an iPad or Kindle for the books you use in your college courses or read for pleasure instead of traditional print publications? Why or why not?

Answer 1

answer-

1- i. Traditional competitors
• iPad have traditional competitors like notebook, laptop, camera and all hand phone brand especially Samsung because the competitors in market space continuously devise new products, new future in product, more efficiencies.

ii. New market entrants
• iPad has become a role model for competitors to enter the market in a way trying to imitate and innovating technology. Wherein, the technology has not evolved due to this factor. For example, Samsung has released E-Book like the iPad. The proof of the sue lawsuit between Samsung and iPad due in terms of size, design and function the same.

iii. Substitute products and services
• iPad is not just a phone but covers all the technologies like social hub, games, e-mail and others. For example iPad substitute textbook to e-book which can be brought about elsewhere in iPad applications.

iv. Customers
• Customers will have some bargaining power as many content producers are now located online for free. Because of its low price, and consumers still crave something more. Here the important role of pricing, where customers are looking for products that offer the lowest prices and have various advantages in product.

v. Suppliers
• Here you assess how easy it is for suppliers to drive up prices. This is driven by a number of suppliers of each key input, the uniqueness of their product or service, their strength and control over you, the cost of switching from one to the other, and so on. For example, the iPad makes a deal with the publisher Amazon for low prices.

2-Disruptive technology is one that displaces an established technology and shakes up the industry or a ground-breaking product that creates a completely new industry. Everything on iPad makes it a disruptive technology. It come with special features such as it is small and that make it very easy to carry. The iPad also come with the latest technology and new software that make it operating very smooth. The iPad is replace existing technology like computer, television and e-book. Anythings that people get on computer, they also can get it on iPad plus the iPad is small compare to the computer. The winners are the iPad that own by Apple themselves. This is because everything inside the iPad. Everything that makes it a disruptive technology. A special features compare to the other tablet. The losers are textbook industry and laptop industry. It is because people can have all of them on the iPad. More people use to choose the iPad rather than textbook and laptop.

3- Apple had to change their behaviours as been forced by the disruptive technology , in changing the company's supply chain, its marketing strategy, its market position, or its pricing strategy. Apple has their own business model which previously believed content was less important than the popularity of its device. But now, Apple realize that to be successful, high quality content is the first thing to be understand. Apple now deals with media industry to distribute the content that users want to get at a price agreed. To sell devices, Apple had to leave the old attitude ( “rip, burn distribute’’ ) as iPad got challenge to convince potential users.