Apple is Facing Major Declines…

Those are fighting words for most Mac, Iphone or Ipad users.  If you are in the Apple tribe, that headline probably gets your blood boiling, ready to call me an idiot and tear into this blog.  But, I don’t really mean it.  I hope that you’re totally upset, so I can prove a point, as to how loyal Apple users are.  So relax and enjoy the article.  It’s all about how great Apple is.  In fact, I’m typing on my Mac as I speak, with my Ipad charging away about a foot away.   I could not live without my Ipad–stylus and all.

A few weeks ago, someone asked for a good marketing book to read.  I said “Have you read the Steve Jobs biography, because that would be a great starting point.”  I do believe that aside from his craziness, Steve Jobs is the best marketer of our generation.  Everything he did was about the consumer, not just in taking their feedback but in guessing what they might want next.    He was committed to the art of marketing, from the design in the product and software right down to some of the best advertising of our generation whether it’s “1984” or “I’m a Mac”.  He was obsessive in his committment.  He had to love the work or he’d reject it.   His bar was exceptionally high.

For Apple to this point, it has all been about Steve Jobs and thinking differently.  With his own voice, here is what makes Apple great.

Brands travel along the Love Curve, going from Indifferent to Like It, to Love It and finally become a Brand For Life.  When you achieve the ultimate status as a Beloved Brand, demand becomes desire, needs become craving and thinking is replaced by feelings.  And, Apple is the most loved of all Brands.  When you love a brand like Apple, you are loyal, unrelenting and outspoken.  Try saying something negative about Mac to someone in the tribe and watch out.  That’s like knocking their favourite sports team.   To Apple users, it’s very personal: you are possessive of your Apple brands you own.  It’s extremely emotional for you, certainly not rational.

Nothing comes close to what Apple has done over the past 10 years, whether it’s in desktop computers, laptops, mp3 players, smart phones, tablets and even the retail space.  Three times this year, I’ve walked past an Apple store before the mall opens, and there are usually 10-15 people waiting for the doors to open up.  I’m sure every retailer would love that.

Samsung and Microsoft are strong brands, but stuck at the Like It stage.  While consumers gladly buy their products, no one is going to stand up and defend them.  People are indifferent about Brands like Dell and HP who have commoditized laptops, charging a slight premium, but barely.  Even Sony has fallen from grace, recently announcing billions in losses.  If you are born before 1975, and rarely buy electronics, you still think “wow, that’s a great price on a Sony”.   But that group gets smaller every year.  The HTC brand only wins from carrying Android, but no one really cares they have an HTC phone.

Apple has an amazing brand following.  It’s like a tribe of loyalists ready to speak out and defend the brand.   How have they done this?

1.  Products that the consumer doesn’t even know they want yet:  While in the technology field, Apple has never done the better mousetrap.   Apple is all about the consumer.  Apple has an invention mindset.  It’s more than just making money.  They want to make a dent in the universe.  It’s about thinking different and delivering something the consumer could never have imagined.   Apple carefully considers what consumers are looking for.  They are completely meticulous in the planning and design stage.  They keep things plain, simple and so easy-to-use products not only to make the consumers happy, but also make them want to buy more products in the future.  Apple is an idea connected to simplicity, not just a series of products.

“You’ve got to start with the consumer experience & work backwards to the technology.  You can’t start with the technology & try to figure out where you’re going to sell it”

Steve p. Jobs

2.  Are You a Mac?: Let’s face it, Apple is a cool, hip brand. It pushes a strong identification with everything young, up-to-the-minute and smart.  The “I’m a Mac Campaign” was brilliant in not only defining the Mac brand as smooth, confident and cool, but defining the PC brand as old, uptight and awkward.   At the height of this campaign I was in a crowded bar that went immediately silent when one of the “I’m a Mac” TV ads came on.   Also, many of the Apple products have separated themselves from the competitor, whether it’s the white headphones on the iPod, the number of apps for Iphone and Ipad or the cool sleek designs of the Mac.  Not only that, the Apple store is a store just for Apple users.  My mom, who is 77 and a recent ipad user has been to the Apple Store numerous times, taking some of the courses or just asking for help.

For fans of the “I’m a Mac” campaign, here are 15 ads.

3.  An Obsessive Commitment to the Consumer and the Apple Brand.   Stemming from Steve Jobs, the entire company is committed to simplicity in design and functionality.  Whether it’s the rounded edges, colour choices for product or the Glass on the Apple stores, there is a certain obsessive behaviour.  Sometimes you wonder if it’s worth it, but would Apple be Apple if it wasn’t for these obsessions?

Apple leverages this obsession to create consumer loyalty.  Looking at the phone industry loyalty data, Apple has by far the highest loyalty of any brand:  over 90% of their consumers love the Iphone.  Brands like HTC, Blackberry and Sony have scores in mid 60s while Samsung has only 57% prefer the Samsung.  Creating the tribe is great, but Apple delivers satisfaction to their consumers.

To be a Beloved Brand, you must love the work you do.   If you don’t love the work you do, how do you expect your consumer to fall in love with your brand?   Brands that are stuck at the like stage settle for ok.  Beloved Brands like Apple start at great and still push to make it even better.   They are never satisfied.

The more loved the brand, the more valuable the brand.  The tight emotional connection with the consumer becomes a source of power it can leverage whether that’s with consumers themselves to pay more, stay loyal or buy more products.   Plus, that power can be leveraged with retail partners, suppliers or competitors.  

In 1976, early in the life of Apple, Ronald Wayne decided to cash in his 10% of Apple for around $800.  If he held onto it, that 10% would be worth $56 Billion.  Mind you, we have all missed out on quite a few investment windows over the years.  If you had put $100K into Apple in 2003, you would have around $10 Million!!!   You wouldn’t be complaining about the economy, wondering who to vote for in the fall.  But unfortunately, I didn’t know Apple would do so well.  Has the Apple brand peaked?   Hardly: Apple has gained 81% in market cap the past 12 months.   I missed that window as well.   

My hope is that momentum can continue.  Not because I have invested money, but because I’m emotionally invested.  I crave what’s next, even though I can’t even imagine where they will go.

About Graham Robertson:  I’m a marketer at heart, who loves everything about brands. I love great TV ads, I love going into grocery stores on holidays and I love seeing marketers do things I wish I came up with. I’m always eager to talk with marketers about what they want to do.   My background includes CPG marketing at companies such as Johnson and Johnson, Pfizer Consumer, General Mills and Coke.  I do executive training of executives and brand managers, helping on strategy, brand planning, advertising and profitability.


9 thoughts on “Apple is Facing Major Declines…

  1. Superb piece on the magnificent vision of Steve Jobs!

    I would add that he was doing his thing at just the right time in history, when young people found their niche, and enjoyed the fun that money could provide, often before they became caught up in the surge of responsibilities that comes with independent living and the construction of family life.
    This was at the core of Jobs’ target group, and what made being “hip” so relevant. Ten years earlier might have told a different story…and indeed for Apple, the early days were much more difficult compared with the past ten years.

  2. I agree with starting with the consumer experience and working backwards, and that has been a huge factor in Apple’s success. As far as the invention mindset goes … I think that is looking at things with rose colored glasses. Mp3 players, tablets, and even smartphones were in existence before Apple went to market – the big thing they did was to understand consumer experience and try to take complexity out of the picture. The unfortunate thing that will hurt Apple is control – having to keep everything under their thumb and charging an ‘Apple Tax’ to stay at a higher price point. The PC/Android market has been fragmented, but they’re all starting to come together more – especially Samsung. Once this happens, you’ll see further sliding by Apple. They’ll still be relevant, just not the juggernaut they currently are. The downside of having obsessive fans is that there is a thin line between love and hate.

  3. Graham, I agree with you on the power of the Apple brand but would contend that they need to do more to make their consumers to quote Sally Field “really, really love them”. Their customer service frankly sucks especially in terms of their help lines. Their failure to admit they have a problem when they do and address it in a timely fashion is legendary – remember the iphone antenna problem?

    There is no question they are able to take a key product and make it better as the poster above has suggested and Jobs insights into where to take product innovation is perhaps his greatest legacy for Apple but if they don’t lose some of their arrogance they are going to start to lose some of their love.

    • @Andrew: As we know…every service moment counts. Joe DiMaggio was once asked why he played so hard. His answer? “I always think, there might be someone out there in the stands who’s never seen me play.” I wish every brand had that mindset.

      @Eric, mp3 players and tablets were dying a slow death pre-Apple. Early in the life of Ipods, when I was giving speaches, I’d always ask “who here would buy an ipod”….75% of hands go up….”who here would buy an mp3 player”….5% of hands go up. Jobs acknowledged stealing at every turn. But they still had the “mindset” of an inventor…albeit never invented anything. A bit more of Ford than Edison.

      It will be interesting to see how Apple does post-Jobs. The marketing of the Ipad3 does not seem very Jobs….boring ad, “retina display” is not that big of a consumer need that will make people flock to the stores. The book prices….that’s a Jobs decision, and an odd one, given he went counter to what they did with music.

      • If you look at adoption curves, most early entrants are failures. That is because the technology usually isn’t there yet, the model is slightly off, and it’s very costly to create a market/awareness. This isn’t to take away the great successes of Apple, just that they are given too much credit. The great thing they did was to see the ecosystem before anyone else, had the ability/gall to create it (less risk averse than a successful company), and brought the sex appeal/ease of use to consumers. That’s a great business model innovation.

        I agree – it will be interesting to see where the company will go post-Jobs. I figure we’ll need to give the company at least a year in order for anything that was in the works during Jobs tenure to hit market … after that, things will definitely get interesting.

  4. I feel the brand love for Apple has peaked, emotionally speaking. They have gone from obscure, iconoclastic, big-brother-busting underdog with groundbreaking design to something akin to big brother itself. Their design, internally and externally is still beautiful and beautifully functional in most respects, and this is still the hard centered core of their equity and the relationship we have with them. However I feel that their massive advertising investments ($933 million last year) to help impose themselves as a global cultural icone, and the very ubiquity of their products, (ie: even people you might have no respect for use an iphone), has edged them into the kind of territory Facebook is in right now, something that I call brand fascism. Don’t get me wrong, they still enjoy huge reserves of love, but their gargantuan scope, their omnipresent ever-upbeat but rather monolithic branding, combined with recent media and public critism of things such as their supplier’s employee practices, suggests that the honeymoon may be gradually fading away.

  5. Patrick, so maybe there is one stage beyond the Beloved brand stage…the one where Britney Spears goes…she gets so big, that a group of people begin to resent her, poke holes in her (not literally…well maybe)…find out she has gaps and tears her down. This seemed to happen to Bennetton, then Gap…both almost invincible for a while, then quickly highly flawed…they tried against McDonalds a couple of times, yet they held held sturdy through the challenges.

    I think the idea that they are a closed shop could come back to haunt them, when brands like Samsung come with anything for anyone approach. Samsung’s issue is they are still a heartless/souless brand.

  6. Good morning Graham,
    I must start by saying I hold Apple and it’s brand in the highest of regard as well. I know your article speaks of branding and loyalty. I am very curious about the latest article in PCWorld, noting Apple for having the greatest number of Security Vulnerabilities. I am attaching the link for your review…
    Many thanks,

    Brian Guest
    Mediacation Promotional Products and Marketing

  7. I think the antenna and Java vulnerabilities were both addressed much too slowly by the brand and headquarters. The service and customer interaction must equal or exceed the product- think about Amazon and how they relentlessly pursue customer satisfaction.
    Many of the posts on the Apple support pages are begging the company to fix clearly identifiable (and oft commented on) glitches to no avail (look up problems with Apple’s Time Machine for example).
    Everyone raved about Dell, Austin, garage start up etc. … How long until Cupertino suffers the same. Will a new headquarters continue to promulgate greatness- which I continue to buy and use with great affection…

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