How many Apple hardware products can you name off the top of your head? Most of you will probably get the iPhone with no problem, and some of you may even be able to break that down between the three models currently offered – iPhone 3GS, iPhone 4, and iPhone 4S. About the same number of you will name the iPad and the iPod. Fewer of you will break the iPods down into their three lines of iPod shuffle, iPod nano, and iPod touch; but most of you will recognize those names when you see them. A bunch of you will probably know about the MacBook Air; some will know the MacBook Pro. Some will recall the iBook and assume it’s still in production, and many will remember the iMac. Most of you will forget the Mac Pro, but that’s okay; Apple seems to have forgotten it as well.
Apple’s product line, as told by their site menu.
Recognizable and Memorable
One of Apple’s major successes has been in keeping their products recognizable, both visibly and verbally. You say iPhone, and most consumers have an accurate image in their minds of what that looks like. The same is true of MacBook, iMac, iPod, or iPad. Whether or not the picture in your head looks like the most current model is irrelevant. You know what it is and who makes it. This is the exact opposite strategy of almost every other technology company on the planet, but I think it’s one of the reasons Apple has the most brand recognition. People still care about Apple products in a way they don’t care about other companies. They may love Apple or loathe them – but they care. And that level of passion is something other companies only wish their customers had.
The millions of square feet on the LVCC’s show floor are jam-packed with model after model of what could easily be the same product. HDTVs line booth after booth, sprout up towards the ceiling, and tumble over garish, elaborate displays. Smartphones and their accessories (mostly docks) dot outlines and make paths through massive Sony and Samsung micro-worlds, while the smudged glare of anonymous Android tablets greets you at every new spectacle. Nothing seems original.
On a similar theme, Gizmodo writer Mat Honan pens:
I try to remember all the products I’ve talked about that I won’t even bother to cover—and that nobody’s going to buy. There were some Bluetooth speakers. Or maybe they were WiFi. But there was definitely a helmet cam. And a waterproof phone. And a tablet and an ultrabook and an OLED TV. There was ennui upon ennui upon ennui set in this amazing temple to technology.
This was coming off of the Consumer Electronics Show, a venu where almost every gadget maker in the industrialized world gets a chance to show off their latest and greatest, whether in production or in prototype form. And these writers are technology reporters. This stuff is their bread-and-butter; this is their passion; this is their livelihood. Yet even they seem burned out by the deluge of technology. Little stands out in a world where too much is shoved down the throats of potential customers.
Simplicity in Selection
In all honesty, could you name the companies that make these Android phones? Aria, Desire, Hero, G2 Touch, Droid Incredible, Legend, Evo 4G, Nexus One, myTouch 4G, Inspire 4G, Sensation, Wildfire, Thunderbolt, and Merge. Would it surprise you to find out they all belong to one company? All of these phones are Android phones made by HTC, but the list does not represent all phones HTC makes. In fact, Chris Ziegler, also writing for the Verge, has created a great visual demonstrating that HTC released some twenty-four Android phones in the time spanning the release of the iPhone 4 and the iPhone 4S. Adding WP7 phones to the list would grow it even more.
Which one is the iPhone? Now name the others.
The problem is similar to that of PC makers when Windows was reaching its peak. Yes, Windows won the computer operating systems war, but which hardware manufacturer truly benefited from that victory? Who could tell you the difference between an Compaq, an HP, a Dell, or a Gateway? They all offered basically the same thing because they allowed another company (Microsoft) to determine the features their computers could offer. Where they could not compete on uniqueness or quality of experience, they competed on sheer quantity until their business models became unsustainable. Of those various old PC companies, many look very different today; some have completely reorganized; some are barely staying a float; and others have disappeared altogether.
Remember these guys? Yeah, Acer owns them now.
The problem they faced and that current Android handset makers face is multi-faceted. First, among customers who care, they risk buyer paralysis. Think about it – you want the latest and greatest Android phone, but twenty new phones have come out in the last year. Atop that, you don’t know which ones will get a software update when a new version of Android comes out. When is the best time to buy? Why spend $200-$300 on a device you know the company will replace in a few months? The other extreme, then, is that people don’t care. They buy something that looks good when their contract is up. They hear they should get an Android phone, so they do. This time it’s an LG. Next time it may be a Samsung, or an HTC, or Motorola, or Acer, or something else. They don’t care because they are all basically the same thing, so you get no brand loyalty.
With iPhone, Apple has created the same brand awareness they created with the Macintosh. By 2006, a full year before the iPhone was introduced, Apple had surpassed Dell’s market cap yet were selling a fraction of the computers. They kept their profit margins high and they’re customers loyal, and, roughly every three to four years, they’d release a new iMac or other product in their lineup that would completely trump the model you owned, and then the internal conversation would go something like this: “Hey that’s nice! My iMac is getting a bit old. Now could be a good time to upgrade.” The same is true for the iPhone.
Those who ask whether current iPhone 4 users would want an iPhone 4S are asking the wrong question. Their contacts aren’t up and aren’t as likely to upgrade phones. Instead, it’s the iPhone 3GS owners who are currently up for grabs and are looking for a new phone, and would they want to upgrade to an iPhone 4S? It’s almost certain, and Apple knows that. With the iPhone 4S, current iPhone 4 users feel safe with their purchase until it’s their turn to upgrade. These simple and well-considered upgrades help Apple succeed in maintaining customer enthusiasm for their products while avoiding the alienation that can often come as the flipside to new product releases. They know who their potential buyers are. It’s simple, reliable, and predictable – a strong foundation for customer loyalty.
Beyond the simplicity of product lines, Apple has a simplicity behind the features they tout with each released iPhone. In contrast, Android phones are advertised the same way PCs were in the 90s. Spec after spec is named in a way that sounds truly impressive but is ultimately meaningless. They show a lot of impressive graphics. They show the phones looking cool floating in space, being struck by lightning, or being molested by pointy objects, but they’re like those car commercials that show an SUV snowboarding down a hillside. It looks cool, but what does it mean for me? Apple takes the opposite approach. I ask you what’s new in the iPhone 4S, and you say Siri. Yes, it has larger storage options, an improved antenna, a far better camera, and a handful of other features Apple could be listing as bullet points in their commercials, but Siri gets all the attention.
Why does Siri get all of that attention? Because Siri is memorable. You see the guy tell his phone to put a meeting on his calendar, hear the phone tell him that causes a schedule conflict and think, “I wish my phone did that.” It’s that simple. All of these phones run at pretty much the same speed, so you can’t differentiate that way. I understand the numbers of how 4G is faster than 3G, but it all seems slow compared to my home WiFi network, so network speed isn’t too compelling yet. They all take good pictures, show great video, and have a bajillion apps (that’s a rough estimate by the way), so what sets any of them apart? With the iPhone 4S, it’s Siri. With whatever comes next, it will be something else, but you can be sure the message will be loud and clear.
Maybe They’re Figuring It Out
Apple is doing something right here – a simplicity that non-traditional players like Amazon and Barnes & Noble have quickly adapted and veterans like Motorola are having a hard time emulating. The numbers don’t lie. Apple just came out of a fiscal quarter that was the second best in history. That isn’t the second best quarter in Apple history; it’s the second best quarter in any company’s history ever. The only quarter topping this is ExxonMobil’s massive fall quarter in 2008 when oil prices were at an all time high. Think about that, though. Apple doesn’t sell a necessity like gasoline. They don’t sell weapons to the US military like some other hugely profitable corporations. They sell a small selection of consumer electronics, yet those products make them the second most valuable company in the world as of fourth quarter 2011. Last fiscal quarter, iPhones accounted for 55% of phones sold on Verizon’s network and 80% on AT&T’s. They are certainly doing something right.
Others are slowly getting on board though. As I already mentioned, both Barnes & Noble and Amazon have released very focused and very marketable devices and have both seen great success with their offerings. HTC is promising to cut back on the sheer volume of phones they release in 2012, and Samsung is pushing for strong brand awareness with their Galaxy line of Android phones. The next hurdle will be one of differentiation. Once the pack is thinned, these phone makers (and tablet makers to a certain extent) are going to have to look at each other and ask themselves, “What makes me unique? What do I have to offer that my competitors don’t?” And most importantly, “Why will shoppers care?” I feel like Asus has done a good job with the Tranformer, and Amazon made an excellent case for their product from the onset.
Apple has an advantage when it comes to separating themselves from the pack, the software. Nobody else’s devices are going to legitimately run iOS. It’s the same advantage Apple had with the Mac, only they are now coming from a far stronger position and a history of missteps from which they can learn. Many of their past competitors are now gone or have moved into different markets. Apple has learned how to build a customer base and keep it, and other players in the tech market would do well to learn the lesson. Simplicity sells. Sane release cycles create their own hype, and compelling features market themselves. You have to stand out on your own merits, and, for heaven’s sake, find a product name and stick with it long enough for people to remember it. Make your customers care, and they will keep coming back.