The Ecosystem Economy

2The Walls Come Tumbling Down: The Dawn of an Ecosystem Economy

In 2007 and 2008, Apple and its then-CEO Steve Jobs were at a crossroads.

A decade earlier, in 1997, nearly twelve years after being forced out of the company he cofounded, Jobs had returned to Apple and was quickly placed at the company's helm. At the time of his return, the company was teetering on the edge of bankruptcy—Jobs knew that to save the company he would have to act quickly and decisively. The only way to survive, he concluded, was to cut out the company's many extraneous endeavors and focus all of its energies into a handful of core products that would rely on Apple's major strengths, especially design.

Apple's signature personal computers would certainly be one of these products, but Jobs could also see that personal computers were evolving—and that the internet would soon make it possible for all sorts of commerce and consumption to take place on computers. This was especially true, he could see, of music consumption. So Jobs put one of his strongest and most innovative teams on developing what would become the iPod, a small personal device for playing digital music. The iPod, of course, became a huge hit as the digital music business soared and as Apple introduced iTunes to support it.¹ Soon, though, Jobs began thinking ahead to what would be next for the company, and by January 2007, he had unveiled the iPhone, a sleek personal device that would incorporate all the design refinements of Apple's ...