Once there was a small chocolate company. Its owner was a master candy chef, and a chocolate lover. Over the years, he had learned which plantations grew the best cacao beans, how to roast and grind them, and how to make a savory chocolate praised by chocolate lovers. He did good business and supported a number of workers, with about a 10% share of the regional market. He did some market research, and found that his customers were wildly enthusiastic, but that most people found the taste too strong. He decided to temper the taste. His market share went up to 20%. Encouraged, he tried again, making it a bit sweeter, a bit less expensive, etc. Eventually, his company gained about 50% of that market. However, the chocolate was now about the same as other chocolates, and the chocolate-lovers gradually went in search of other chocolate.
Discussion
This is essentially the plot of the excellent Robert Redford movie "The Candidate", retold as a fictitious chocolate company. Redford's character begins with strong, clear views on key issues. His statements attract followers and get the attention of the media. But as he becomes a serious candidate, he has to become blander, so that he can appeal to 51% of the voters.The effect is ubiquitous: there is often a contest between market share and good taste. There is almost always a trade-off between market share and quality. Most people cannot afford fine furniture, Mercedes, or true craftsmanship. (On the other hand, the capitalist mass production economy has meant that "ordinary" clothing today is finer than much of what nobility wore for much of history, and even "ordinary" cars or computers are quite serviceable.)
I wrote the parable to focus on designing for oneself versus for others. Homework I asked you to redesign something in your everyday life, and also asked if you would do it differently for other people. Over time, many students have said that they would make the product a certain way for themselves, but rely on market research for others. Clearly lots of companies take that route, for good financial reasons. But some don't: they trust their taste and expertise, and design something they want to use. Like the gourmet chocolatier, they accept the niche market.
I'm not sure Apple computer has "settled" for the niche, but under Steve Jobs, they have sacrificed market share to meet their/his strong standards of design, primarily because the design has typically required a higher price.
The pressure towards mediocrity
In the chocolate parable, the chocolatier gradually exchanged his original 10% "connosieur" market for the 50% "average" market. This can happen for other reasons. For example, I've heard that new restaurants tend to have very good food, but that quality declines after a year or so.
The explanation I heard is that originally, "foodies" are attracted to the good food, and the restaurant gets a good reputation, attracting steady business. But once the clientelle is established, people come out of habit and for social reasons. This population are no longer as sensitive to food quality. Since good food is more expensive to make, the food becomes ordinary, with no real change to revenue. Chefs move on, and foodies with them. See also John 2:10: Everyone brings out the choice wine first and then the cheaper wine after the guests have had too much to drink;