Apple have long enjoyed a premium for their products which has been greater than their rivals but is Apple still doing it for you or are you being tempted to look elsewhere?
There was a time not long ago when owning an iPhone was ultra desirable, nothing could touch it for style and cool factor.
Much as I love the Apple brand, ten or so months ago I said, 'with the great Steve Jobs gone, Apple will suffer'. And as such they have from a business perspective with in a loss of share value. More worrying news is that other companies are fast catching up and bettering Apple. In fact this has been happening for a while now. The future has more than a hint of uncertainty about it.
Apple has some of the greatest businessmen in the world to help them through this difficult stage in the company's history. So what's going on?
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| Brands must innovate with ideas that understand humans, not simply see them as a way to create currency. |
My take on things will probably seem controversial and maybe lacking in the depth of evidence currently available for the majority of business models. Yet based on this knowledge, incredible structure for new communication models are forming for business which go beyond traditional marketing, beyond brands and beyond rational business thinking. And they're working.
Stating the obvious.
Anyone could have said that with Steve Jobs gone Apple would struggle. However, most, including some of the best businessmen around can't see why. So why is a company that has enjoyed being in such a strong position beginning to slip? And why aren't the businessmen at Apple preventing this? Forget all the business strategy, planning etc...
The reason: They are simply out of ideas.
Tim Cook, CEO of Apple must have one of the hardest jobs in the world. As just about everyone knows - he's the man who has taken over from Steve Jobs left off.
The main difference between them as far as I see it is Tim Cook is a great businessman, whereas Steve Jobs was a great ideas man. The two cannot survive without each other at the top. In order retain market position a good business strategy is obvious but at the same time, constant innovation is required and this very hard work.
Is it also possible that Apple could be losing touch?
More than possible - it's a serious reality on the street. Apple will beg to differ but I'm not interested in the spin they are putting on things. I'm interested in what's going on in the street and while there is still a huge and very loyal consumer attached to Apple products the younger generation doesn't seem so convinced. These are people in the teens and twenties and are the future. It's up to Apple to listen to these people if they want to be a part of their lives in the future.
The truth on the street for what I'm hearing are things like: 'Apple aren't as good as they were', 'Samsung are better', 'You can do more with Android'.
As Apple stop bringing their renowned irresistible innovative style to the market, the consumer is actively looking for new ways to retain both the ease of life which technology can provide and also street cred.
If I were Tim Cook I'd be very worried, no doubt he is, however his job dictates that he must communicate a different picture.
What happens next if issues aren't addressed and resolved?
Enter commodification. When a once ultra desirable product becomes common place and acts simply to provide a function. This type of product (or service) becomes a commodity. It has no love attached to it, becomes expected, not respected and is taken for granted.
When a product ends up here you can expect to see a massive loss of premium so lower price points. This leads to a loss of shareholder value, which many money-men consider to be the point of business in the first place.
When a company is out of ideas to create sales, instead of innovating, panic often sets in and the price is cut. From £lots to £nothing can happen very quickly.
Good news for the consumer in the short run.
However, it's very bad news for business if it can't keep up with changes in consumer values and ideals. This is when new ideas are needed more than ever and if you're not innovating and leading with ideas, you're playing catch up which comes with it own sets of rules.
A cheaper iPhone to hit the market?
With the news of a new range of lower priced iPhone beginning to circulate I fear that commodification is happening to Apple right now. This is what really got me worked up to write this blog. Design alone isn't the answer as putting existing technology in to a new box isn't going to fool today's savvy consumer.
To get a clearer picture we need to visit the early days of Apple.
Apple the company was doing well; the Macintosh launched in 1984 was successful. Innovative technology was cool and doing good business - people loved it. But cool and innovation was soon to be lost when Steve Jobs was pushed from Apple in 1985.
Of course their is a lot to read about this but my point is what happened to Apple from here until 1996.
Apple needed ideas and creativity that Jobs offered but the money-men thought they could buy their way in to the market and dictate to the consumer. For a time it seemed to work but Apple forgot about the consumer. Jobs came up with ideas to make the the lives of the consumer better, Apple were now trying to come up with ideas to make money.
The money men armed with all their stats and business plans still failed to grasp that important little point that I often mention: We're human, not machines. The machine is Apple's product and it's not going to be used by another machine, it's going to be used by a human.
What makes business sense on paper often doesn't make sense in reality.
Why? Because humans are irrational not rational. We think with our hearts first then our minds, we're emotional beings. Neurologist Donald Calne explains this best: "The essential difference between emotion and reason is that emotion leads to action while reason leads to conclusion".
This is what businessmen often miss in their 'great' business plans. Often these plans are based on stats which are based on a system of gathering information that is floored. They're looking to reason for direction and not at what prompted this direction in the first place.
Let me quickly explain:
If you're asked to answer questions by another person, your reaction to their questions, like it or not, is going to be effected by the person asking the questions. So different people asking the same questions to the same person will often lead to variations in answers and therefore results. It's floored. If you want to ask questions and find out when people really think then do this online where there is no other human interaction. You'll get much closer to the truth this way because people are not being effected by or having to deal with emotions as part of the equation.
Back to Apple.
After years of decline, in 1996 following the purchasing of NeXT (a company that Jobs had set up), Steve Jobs found himself back at Apple in an advisory role.
Look what happened.
Jobs brought back with him vision. He brought back innovation. Steve Jobs bought back ideas to Apple. Ideas that not necessarily the board room would like but ideas that the consumer would love.
Up until Steve Jobs' death Apple was booming. Back in 1985 when he left Apple the first time, a period of decline followed.
I think with the lack of a creative leader, an innovator - an ideas man - Apple will suffer again until they find someone else better. This is why businessman Tim Cook has such a difficult task.
An great ideas man.
Steve Jobs was an innovator, a great ideas man. Humans are naturally intrigued and drawn to innovation and ideas as we want to learn. So it almost goes without saying that if a product offers this through its design makeup, it will be more desirable. Jobs managed to infuse Apple products with emotions that humans are intrigued with. This is something that based on Apple's success when he was in charge, came naturally to him.
Indeed, it would appear that if the money-men had understood the value that ideas people had to offer a business relationship better at the time, instead of trying to own it, things may have been very different for Bill Gates.
Conclusion.
Kevin Roberts, CEO of Saatchi & Saatchi says that ideas that are based on emotion are our principle currency.
He's right and this is my point. Steve Jobs has proven this at Apple and I think his absence will continue to prove it until Apple can find a replacement.
