A piece of news in WSJ on how Chinese phone manufacturers have beaten Apple in expanding their ecosystem of products caught my attention this morning. In case you missed the news, Huawei and Xiaomi, whose phones battle the iPhone in the Chinese market, released EV cars with advanced digital features this week.

The goal obviously is straightforward. These companies want to add products that will make consumers “addicted” to their ecosystem. So, in this specific example, the goal is to keep their phone customers engaged in these high-tech vehicles and seize market share before Apple launches its EV. You can read the details in this article: “Apple Is Being Overtaken by Chinese Smartphone Rivals—in Cars.“

In my opinion, this is not a devastating news for Apple. With the price tag of these cars, it is not that these products will get embraced at scale. Apple already has successfully offered an ecosystem of products to its customers. The seamless way your Mac, iPhone, Apple TV, and Apple Home devices interact with each other builds that “habit” that companies want their consumers to develop. The concern, however, is that these companies were able to beat Apple to an idea that I believe Apple originally envisioned.

I have consistently emphasized the need for companies with wildly successful flagship products to build an ecosystem of products and services continuously. Because the success you currently enjoy with your flagship product is not eternal. The good news is that it is becoming more and more convenient to introduce products that can help create an ecosystem. The goal is to focus on products as indispensable as your core product.

In most cultures, cars are an integral part of our day-to-day life. So, if you can make it a habit for your consumers to leverage your product (read phone) to interact and operate their car, you take control of a significant portion of their day-to-day life. And with a car comes a comprehensive portfolio of accessory services and products. It expands the portfolio of possibilities significantly.

At a high level, Cars are not something that you would expect a phone manufacturer to get into. It was a genius idea, and I suspect it may have come from Steve. The fact that the whispers started around the early 2010s and never manifested into a product, even in a decade, makes me think so. However, that is not the only aspect of day-to-day life that can be “controlled” using an ecosystem, with a phone at its core.

This article is not about listing those aspects. People more intelligent than me are probably already thinking about this. As I have indicated in my other articles, the barriers to entry to technology have diminished, allowing access to companies in competing countries access to innovative technologies. The pace of innovation is, hence, extremely critical. While this development is not deal-breaking, it should be an eye-opener.