To understand network effects, I can think of two contrasting cases:
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The Fan-base: Even very early on, Apple created a very small but loyal set of customers. Even in the 1980s, Apple was known for computers with great fonts and graphic capabilities. With innovation in printing, they became the go-to system for desktop-publishing and graphic design. Their brand revolved around beautiful design, innovation, and ease-of-use. The network-effect created by their desktop-publishing software implied that all graphic designers HAD to use their system, not that anyone complained. Their sales may have been low, but always had very high margins. You can think of it as a network with very strong connectivity. Any new product was lapped up by the masses and they bonded very strongly with the brand. (http://graphicdesign.stackexchange.com/questions/28974/why-are-apple-macs-used-so-much-in-the-graphic-design-industry)
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The marketplace: Microsoft and Google’s Android come to mind. Both sacrificed immediate margins and distributed an essentially free product to create a large base of dependent consumers, then they turn(ed) the screws to control and extract value from the network. Microsoft was initially very accommodative about software piracy. The quality of their software has been generally poor, but then it was the default and you got used to it - despite horrible performance, and frequent crashing (lookup BSOD on google). Once they had a large enough consumer base, with consumers trained in Excel/Word, then they became harsher with enforcing anti-piracy measures. Android is also on a similar path - where they made their software freely available to mobile manufacturers. The early versions of Android were bad until Google created, manufactured and sold their own branded devices - the Google Nexus. This allowed mobile manufacturers to jump onto the smartphone bandwagon without too much software coding on their end. Many mobile manufacturers ended up killing their own software architectures (Samsung BADA, and Nokia’s Symbian) to replace it with Android. There were far too many mobile customizations that prevented you from upgrading your mobile phone whenever Google came up with new updates. Over the last year, Google has being taking back control over the software platform in Android 4.4, where they can bypass restrictions from mobile manufacturers and update your phone. Now your Androids belong to Google (Evil laugh!)