First, the Great East Coast Earthquake. And now, the Steve Jobs has resigned as CEO of Apple. What is creating the bigger tremors?
Here in the Valley of the Geeks, it’s the later. The sun shall rise again on Apple tomorrow morning, but the games business for Apple will be a-changing. . . regardless of what Steve Jobs does.
According to report by Reuters (must give credit to the source of news that broke the story), Steve Jobs is stepping down as CEO of Apple and remaining on board as chairman. Tim Cook, the heir apparent, will step up as the new CEO.
Steve Jobs is leaving at the apex of Apple’s power in the the digital world. iPhone 5 and iPad 3 are slated to come out later this year. It was just announced that Apple is outselling Levono by $1 billion in China which is crazy to think about, since Chinese market is driven by cheap knock offs.
But the world is about to change for Apple. Apple wins by selling higher end, industrialized-designed devices to people willing to spend more than $500 a pop for the latest in technology. It’s a huge market, but it’s not the biggest market for technology.
HP just accidentally proved that the sweet spot for tablets is $99 – $199 by quitting the tablet business and putting all HP Touchpads for sale for $99. The Touchpads are flying off the shelf. If anyone at HP has a brain, they’d retract their decision to get out of the tablet business, sell the device at $99 for a loss, and make money off selling games and apps (just like the console business).
Regardless of what HP does, manufacturers in China are reportedly mass producing Android tablets to go on sale in the US market soon to sell for a retail price around $199. Given that the average person uses a PC for email, web browsing, and games, the 3 activities you can do better on a tablet, its a no-brainer that these will sell like crazy at this price.
In effect, Steve Jobs is leaving Apple at the height of its power but also at a crossroads. No matter what, comparable prices and tablets at half the price will eat into its market share.
The new CEO will have to make a decision: keep Apple devices as a high price luxury item (which is what it is today for most people), lower prices to hit the mass market, or both (keep new products at high price but discount older products lower).
It’s a decision Steve Jobs probably wouldn’t have been excited about doing since its a bit against his product philosophy, but one that must be made soon. In that way, this change is probably a good thing at this time.
So, what does this have to do with games? Well, Apple along with Facebook has been the leading driver of expanding casual games into the hands of a larger market in the past two years.
If Apple does not change it pricing and product strategy soon, it will play a smaller role in the distribution for casual games in the future. If it does move forward with a more dynamic pricing and product strategy, it will continue to be the number one major player in the world of casual games for years to come.