For Apple, Success May Be Contradictory To Sustained Success
Apple Computers is now the largest, most cash-rich company on Earth. While hitting that apex is usually a cause for celebration – and Apple executives and stockholders have been celebrating, most notably by announcing a stock dividend – those who take a longer view of the company’s trajectory see the milestone as a potentially troublesome one for the company. For sure, when you reach the top the only way to go is down, but the real problem Apple faces is not with pessimists; it is with the company’s own image. Unfortunately for Apple Computers, Apple’s exceptionally successful publicity machine that helped the company rise to the top of the corporate food chain is now working against the computer and technology company.
Apple’s long-term advertising strategy has been to promote their products as vital, cool and not mainstream. Ironically, the iPod, which quickly became synonymous with “mp3 player,” was advertised as cutting edge and cool, a hip alternative to portable c.d. players at the time it was first released. The rise of the iPod started Apple Computers on a trajectory to the top of the business world. The proliferation of the iPod, despite being more expensive than other mp3 players and being so common, did not hurt Apple Computers. Instead, Apple built – or rebuilt – a culture around their products. The iPod led to the success of the iPod Touch, iPhone and iPad.
Throughout the ascent of Apple’s i-product line, Apple’s advertising continued to appeal to consumers on the basis that their products were cutting edge, easy-to-use, and, above all, cool. The earliest adopters of Apple’s successful product lines were counterculture computer enthusiasts who had money. The outsiders became cool suddenly and Apple built their success on their enthusiasm and dollars.
The problem Apple Computers may well face now that it is the most financially successful business on Earth is that the hook it had for its consumer base is now entirely gone. What is cool is, historically, elite; not everyone can be cool. It’s the law of the schoolyard and Apple put itself in that framework when it built itself as the company that was cool, exclusive and an alternative to Microsoft/PC products. There is, as Microsoft discovered, no counterprogramming to “cool.” But exclusivity is a big part of being cool; the “in crowd” is small, away from the “common folk.” How can Apple market their products as exclusive and cool when they now have the largest market share of some of the most significant consumer electronics products on the planet?
The problem that Apple’s marketing is now running into is that their shift in advertising is less-than-compelling. Marketing for the new iPad focuses exclusively on new functions of the iPad. Abandoning the edge that Apple products are cool, Apple must now compete based on the merits and it is hard to predict how long they will be able to maintain their dominance. Already, competitors like Samsung have tailored their advertising campaigns to illustrate how their new products actually exceed Apple products on the technical merits . . . and for lower prices.
It is natural, when a company reaches the top of its industry, for competitors to work to cut into the market share of the big fish. Unfortunately for Apple, its competitors have a potentially easy job with deconstructing Apple as the successful marketing that led to its dominance is now unsustainable. Apple must now adapt or find a successful way to market what no other company ever has: “You’ve already bought so many of our products; you might as well stay with us!”
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