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Apple and Drivables.

Apple hasn’t always been the darling it is today. And the slowdown of the iPhone sales was predictable. Factions in the company focused on preserving revenue versus those who want to blow it up in search of a replacement device (watch?) are impeding things. But, hey, that’s the price of progress and free enterprise.

lit-motors-car

But don’t bet against Apple. Some smart Apple people are looking into the next BIG thing – self driving cars – and kicking all the right tires. An investment in McLaren, a tech forward company, would be a good fit and take the average revenue per customer up from a slim handheld to large, large drivable.  Every person has a phone and nearly every person has a car. Do the math.  Apple’s look into Lit Motors, a motorcycle company, is genius too.  Ever look around a highway? Nothing but single car drivers surrounded by empty space. Making smaller, safer drivables into self-drivables is a trillion dollar bet. And with boomers aging, caregivers won’t have to take away mom’s car keys. Good for the planet too.

Don’t let the iPhone 7 thing cast a pall over your perspective on Apple. Those dudes and dudettes are boogying.  It won’t all be pretty (Did you see the movie?), but it will be spectacular.

Peace.

 

 

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I used to say “People who talk about ROI aren’t, getting it.” Today, I amend to say company “CEOs who talk about shareholder value aren’t getting it.”  Look at HPE (Hewlett Packard Enterprise). They divided from HP, sold off their services business, are selling their software business and tightening the company compression shorts to make themselves even more attractive to shareholders. Consolidations of this sort are focused on Wall Street. But in technology you need the best product not the leanest business. 

Look at Apple.  Do you think Apple’s people really care about shareholder value as they drive to work?  No, they’re thinking product. Product innovation. Product woosh. Today, The NY Times Farhad Manjoo dinged Apple for lackluster product design of the iPhone 7…and you know that had to hurt. From Tim Cook all the way down to the parking garage attendant. But Apple knows the design is good and they know what’s in the pipeline. Apple cares about product, not shareholder value. Leave shareholder value to the tech companies on the way down. 

Peace.    

 

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The new OS.

Riddle me this. When does an operating system really become an operating system?   When it truly delivers a digital assistant that manages all devices by voice activation. As Amazon’s Alexa intends to do.

Operating systems today are made up of software that undergirds other software and applications, e.g., iOS, Windows, and Android. In 20 years voice commands that direct “ons,” “offs” and other device and system activations will be the operating systems.  These assistants will compete with each other for supremacy.  There will be systems by Amazon, Apple, Microsoft, Alphabet and one or two start-ups. None will integrate (at first) but mark my words, these are the operating systems of the future. Because they operate real life things…including cars.

These operating systems will be the battleground of the next 50 years. Will they be free?  Will they be as expensive as cars? Will consumers be paid to use them? Time will tell.

Peace.

 

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To date, branding has been about setting consumer expectation. We use ads and customer experiences to create an expectation of what will happen when we use a product. With L’Oreal, our hair color is movie star beautiful. Purchasing Apple products makes us tech-forward. Insurance from Geico saves us 15%.

I call this approach benefit pounding. We recite and repeat the benefit and hope it sticks. It’s an age old branding trick that serves up an idea ad nauseam, hoping for a resonance. Benefit pounding for many brands has become context. I watched a Google insights (little i) YouTube video with David Droga yesterday and he smartly talked about context. He suggested we get to know the context consumers are bringing to their consumption of our marketing messages, before we start building. It’s good tradecraft. Context 101 dictates that marketers and branders deal with benefit pounding…and use it to their advantage. Sure we can hide our “pound” in a story, but consumers are conditioned for see through it. Obvert it, invert it. It’s good theater.

Proper brand design sets the benefit topography. It frees smart creative people to deliver benefits in more unexpected, context-breaking ways.

Peace.

 

 

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Back to the future – here we go. Here’s a thought on the evolution of technol-oyee, as my old friend Tom Wan used to call it when he first came to the states: hardware begets software, begets devices, apps and now, drum roll, chips.

ontogeny recapituates phylogenyThere’s a scientific theory of evolution called ontogeny recapitulates phylogeny. It means that the entire evolution of mankind can be seen in the development of a two cells coming together to eventually form a baby. One cell, two cell, reptile, bird, mammal, man. Pert cool. Anyway, if you follow the hardware, software, device, app and chip advances serially, it takes you to the Internet of Things (IoT). And the IoT is going to need lots of chips. Back in the 90s, chips were also the haps. They had names like The Hobbit and made by important companies like IBM, AT&T, Qualcomm and Intel. The latter kicked some earnings ass until it missed the boat on the ontogeny of tech. Yesterday Intel announced it is buying their way back back by agreeing to buy Altera. IBM is getting back in the chip biz as well having also made a recent purchase. Will Google, Apple and Verizon be far behind?

Chips fab plants are not inexpensive to develop. Start-ups beware.  They require lots of energy and water. Feel me? These plants, at some point, will need to be in the states (don’t ask) so for the IoT to happen, the last of big business moves in chips have not happened…by a long shot. Invest a shekel, make a few.

Peace!

 

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Apple’s success can be boiled down to two guiding product development principles: functionality and desire. Steve Job’s was a big fan of design as you know. Creating products that perform valuable, needed functions was his first hurdle and he did it well. That by itself can create desire. But doing so with beauty, grace and artistry? Well, that warms the heart. And fires up the brain’s feelings sensors.

When I explain brand planning to people I say it’s the marriage of “what a product does well” and “what a consumer wants most.” In a sense, this mirrors Apple’s function and desire approach.

Many brand people like to talk about the culture of the company and the culture of the brand. As someone who studied anthropology for a number of years, I’m a big fan of functionalism; where institutions and cultures develop to meet the physical needs of the population. In brief, culture is an adaptation to reality. So rather than spend brand planning time over-analyzing symbols and cues, I prefer to spend time on product function. Things like status may be a desire, but they are certainly not functions. As you do discovery in your brand planning ops, make sure you don’t look past function and go straight to desire. It’s a fundamental part of the product story. Peace.

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I don’t like the IBM-Apple partnership. It will benefit IBM but not Apple. Apple is the device owner. That’s its art. When we start to hear co-marketing phrases like “big data analytics down to the fingertips” it feels like Apple is being relegated to an end-point not the design marvel we know and love. It begins to imply that the data, analytics, the cloud – read the big machine – is more important than the amazing living breathing organ Apple puts in the hands of consumers.

Tim Cook and Apple like the fact that they will now have access to IBM’s huge salesforce and that it will sow the iOS operating system into businesses with gale force winds. But Apple iPhones and iPads are already in 92% of the Fortune 500. And frankly, in the hands of the influencers, not the unwashed tech masses. Masses who are not part of the Apple franchise. Masses who may fly to the next big thing, when and if it suits them.

What has made Apple such a strong brand over the years is it unique design, form factor, software and intense user community. The IBM move will get IT involved at corporations and will put emphasis on the pipes, data and iron (big machines), and RFP – not where Apple has typically done its best work.

When I put on my prediction hat, my “beyond the dashboard” visor, I see this partnership breaking up in 30 months, if not before. Mark your calendars for 2017. Peace.

 

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Have you ever been to a bazaar or Souq? I have not but imagine it to be a barrage of sight, sound, aroma and cacophonous selling. I’d expect a souq to be somewhat organized. Food arrayed in one area, household goods in another, spice and carpets sellers bunched elsewhere. But maybe not. Maybe it is first come first served – laid out and paid for based upon most trafficked areas. The answer is not on Wikipedia so I may have to get out more.

However the souq is organized and depending on its size there are lots of goods from which to choose. A dizzying amount. And that’s not unlike selling today. Consumers are overwhelmed with choices. And tools. And shopping options. Ads fill our lives just as the rows and rows of goods at the souq. So how do companies use ads to set products apart? What does insurance look like. By volume of advertising a Martian might think it looks like a lizard. What does a product taste like? Smell like? What value does it bring to daily life? Once all that is out of the way, why is one product better than that in the next stall? Price? Experience? Recommendation?

If given 30 seconds or a few thousand pixels to convey all of this, how does one package all that info? Apple is finding out. Apple is reported to have 1,000 people on payroll at the company creating ads and marketing materials. They have this massive group, presumably, to save money. A piece I read yesterday suggested the TV ads prepared by the Apple’s in-house team were smoked by the TBWA/Chiat/Day team ads (in consumer testing.)

It’s a big world out there. With lots going on. And massive, massive messaging. Maximize the effectiveness of your work. Get a strategy, be strategic and hire expert sellers. Families in the souq have been there thousands of years. Peace.

 

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The Svelte Apple?

As big as the Chinese mobile phone market is, I’m not sure Apple should be pursing its current growth plan there.  And last year Apple sold 23 million phones in China. The price of an Apple mobile in China is in the US$700 area. The price of a locally produced Android based phone US$100.

In my view Apple should attack the Chinese market with a local start-up.  Don’t dumb down and feature down the 5Cs and 5Ss, to get the price margin better.  Leave them as they are, priced as luxury phones for the up market consumer. Start a new company to fight more fairly the Chinese manufacturers Lenovo and Huawei and South Korean behemoth Samsung.

Keep your R&D eye on the ball in America, the ball being other internet connected devices. We forget that Apple, when not bothered by business blocking and tackling (and shareholding-focused share gain), has a history of inventing new categories.  I fear that with all this energy focused on selling iPhones in China, Apple will regress in the ROW (rest of world) and start to slide.

Small share in PCs gave birth to the Apple of today. Stay the course. Innovate the form, the features and the software. Technological obesity in unbecoming. Especially for the svelte Apple. Peace.

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Tomorrow Apple is announcing a lower cost iPhone along with its latest version of the new iPhone – what will that be the 6?  (Were he around, Steve Jobs would have killed the number thing.)  Anyway, as mentioned last week and long before, I think the Nokia/Microsoft strategy will be to cover the planet with Windows-based smarties and the way to do that will be, though a nice phone at a low, low price. Sold at cost (or a hair below), these Windows phone 8 Nokia hardware devices will be cheaper than two rounds of drinks with your signif. at a NYC hotel bar. Before tip.  I’m thinking US$49.  That’s my price point and I’m sticking to it.

Messrs. Ballmer and friends will create a Costco-priced, beautiful smart phone and price it in a way that the ROW (rest of world) will be hard pressed to ignore. It will offer the cool tiles interface, a good camera and enough design panache to bump iPhone and Androids growth aside for a while.

Rather than pay taxes or sit on the billions in the bank, MSFT is going to be bold and give people without smarties an affordably priced piece of hardware (and software) — effectively buying market share.  It will lose then make them billions. It’s a nuh-uh brainer.  (Go Geno and the Jets.)

And, of course, peace!

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