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Should Apple create their own group meeting software similar to Zoom or Microsoft Teams?

By Kiara Boboff, Lorenzo Cervantes, Ryan Wimsatt, & Victoria Ashkinos

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The Online Gathering Industry

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Introduction

The Covid-19 global pandemic created an unprecedented need for access to online communication that supports group gatherings
Zoom, Google Hangouts, and Microsoft Teams fulfilled the bulk of this demand
Question: Should Apple enter the space with its own platform?

Apple is a premium producer globally, has immense brand loyalty, and a native and reliable ecosystem

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Software

Advanced cloud technology has allowed for high-speed reliable conferencing
Demand for video conferencing technology has been at an all time high with the technology being placed under strain of high volume of calls
The reliability and speed of cloud technology has transformed this technology into an everyday tool
This technological improvement and capability has changed the expectations for companies and individuals - in or out-of-office

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Zoom

Zoom was able to successfully enter a dominated tech industry.

By 2013, it passed the 1 million participant threshold
IPO in April, 2019
Low money burn rate
Privacy concerns with “Zoombombing”
Stock value almost tripled

Zoom was able to successfully enter the video conferencing space. This is a software company that doesn’t produce any hardware. Initially, it seemed almost impossible for Zoom to break into the market because of the giants like Skype. However, by 2013 they passed the 1 million participant mark. Zoom IPO-ed in April 2019. In comparison with other tech companies, Zoom doesn’t burn through cash excessively and was already operating on profits right after the IPO which was surprising for investors. They have faced some privacy--especially more recently. Back when Zoom first became overwhelming popular during the on-going pandemic, there was a lot of Zoombombing--where people would join the call without permission or randomly. Some governments even advised against using zoom for sensitive information. There was also concern that Zoom accounts were being sold on the dark web. Zoom has upped their safety features in response. However, despite the saftey concerns, Zoom has done overwhelmingly well and their stock has tripled.

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Zoom Pricing & Margins

Offering different pricing models
Industry standard
Unusually large growth due to the global pandemic

Zoom margins of about 81.54% in January 2021
Net profit margin of 26.59% in 2021
Grew 169% in one year
Industry standard

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Apple’s Place within the Industry

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Overview

Facetime

Preinstalled (Native Application)
Apple device exclusive
32 people max lobby
Ecosystem compatibility

Apple’s place in the industry lies in their application Facetime. Coming preinstalled with every new device and compatible with the Apple iOS, Facetime is built for simplicity. Available to apple device users exclusively, a user can video or audio call another apple user over the internet by simply navigating to their contact.

In terms of group use, facetime is capable of hosting 32 maximum members in a call. Facetime is integrated with iMessaage, a separate apple application allowing for users to create group chats with all those in a group call and create group calls straight from an iMessage group chat.

Though Apple has these capabilities, Facetime is used under a 2-3 person capacity. It’s lack of simultaneous chat space, and floating tiles, low person capacity and silly AR effects subs it under applications like Zoom of Microsoft Teams in more professional spheres

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Innovate Facetime Pros

Apple already benefits from a large amount of brand capital
Able to update software code relatively easily
Apple’s privacy and malware protection is direct solution to “Zoombombing”

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Innovative Facetime Cons

Adverse Network Effects

Though popular, it is unavailable to non-apple users

Zoom is already downloadable on most computers
Switching costs for users could dissuade from usage
Where can they make profits without a new service?

Some complications that could arise would be from the share of apple users willing to switch from an established software Apple’s new Facetime. According to Statista only about 50% of US smartphone users own iPhones, which is high but, this near majority is only present in Japan and the US. Other parts of the world go to android devices.

And this leads into Zoom availability across all devices, apple and android. How long will it take for the brand loyal gung ho apple users to switch to Facetime instead of use Zoom? Or a better question, what kind of possibilities within the app would allow for the switching ease, and that is something Apple engineers would have to uncover.

And lastly the question of profitability does come into the conversation as we remember that Zoom has tiered services with associated pricings and Facetime is currently a free service as long as you have an apple device. Profitability would come with a price restructuring on Apple’s part to then make this development worth the, well developing.

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Conclusion

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Apple’s Strategy

Should Apple create their own group meeting software similar to Zoom or Microsoft Teams?

Apple is technically already in the industry

Apple should not try to compete with Zoom at a head-to-head scale

Zoom is already a dominating player
Apple would not be able to create the same ecosystem due to network effects

Upgrade app to premium version, add features similar to Zoom

Reworking a new FaceTime app to combat the technological features of Zoom

Profitability may not be there at first, but they have their brand capital and opportunity to create methods of profit with time and further iterations of iOS

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Further Questions

Should Apple acquire Zoom?

Wouldn’t need to change FaceTime
Ingest the profits of Zoom
No need to compete with them

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Any questions?