There’s been a lot of chatter on the internet recently about Apple’s new ad campaign. Some positive and much of it negative. Author and former Apple ad man Ken Segall hates the ads because they “make customers seem so clueless.” The truth is that most users are clueless about technology, yet Apple needs those same users to buy more Apple products.
In their latest quarterly earnings Apple delivered a rare earnings “disappointment” after sales rose only 23 percent to $35 billion sending its stock down five percent in after-hours trading. When you are a $570 billion company, attracting larger markets and developing new revenue opportunities is everything.
So what is the strategy today? How can Apple continue to innovate, differentiate and justify its price premiums? How can it accelerate the transformation from a company for MacHeads to a company for most?
Let’s start by taking a big step back.
When Steve Jobs introduced the first iMac back in May 1998, the focus was on the product hardware: a G3/233 processor, a 15 inch monitor with 1024 x 768 resolution, 100MB Ethernet, etc.
The punch line to his presentation, and the real differentiator for Apple at the time was the radically different and simple design. The all-in-one package, the translucent candy colored box, the carrying handle. As Jobs described it: “This thing looks like it comes from another planet… a planet with better designers.”
Fast forward nine years and Jobs presents a very different, but additive, perspective on Apple’s unique value. In his May 2007 “All Things Digital” conference interview, Jobs defined Apple products as really just software.
“It’s software in the iPod itself, it’s software on the PC or the Mac, and it’s software in the cloud for the store. And it’s in a beautiful box, but it’s software. If you look at what a Mac is, it’s OS X, right? It’s in a beautiful box, but it’s OS X. And if you look at what an iPhone will hopefully be, it’s software.”
What should we take from this? Yes, you need beautifully designed products, but the innovation, differentiation and value for users is really taking place at the software level.
Now, five years later, Apple is refocusing once again.
These latest Apple ads paint a very different picture of the company. The emphasis is not on beautiful, sleek products or rich but simple software (although they are mentioned in the ads). Rather, it’s on the Genius customer service representative helping users do amazing things with their Apple products better and faster.
What’s Apple really saying about itself in these ads? It’s saying, we not only have the best hardware and software, we also have the best service out there. It’s promoting Genius as a third key value.
Perhaps Apple’s realized that successful products are not only about hardware and software, but also about delivering value throughout the entire lifecycle – including services.
If you are a product company that aspires to be more like Apple, these ads are a good indication of what the tech giant thinks it takes today to deliver differentiated value for users and subsequently for shareholders: product and service delivered seamlessly.
What do you think of Apple’s new focus on service?
Not the best timing on this article! Your conclusion — that these ads are a good indication of “what Apple thinks it takes today” has already been disproven by Apple taking the ads off the air. They were simply a misfire, a mistake that isn’t likely to be repeated.
Also, Apple’s “disappointing” earnings report actually wasn’t so disappointing. (The company beat its own guidance for the quarter.) You mention that the stock dropped 5%, but don’t mention that it was back just two days later — and has now risen further to near-record heights.
It’s fantastic that Apple has a Genius Bar and others don’t. But the lure of Apple is that it makes gorgeous products that help ordinary people do extraordinary things — without needing a Genius to guide them. These ads failed because (a) they weren’t produced well, and (b) they strayed from the strategy that has fueled the company’s astronomical growth.
Ken, thank you for the update on the ads and the stock price. While interesting developments, it does not change my conclusion.
First, we need to differentiate between Apple’s strategy and Apple’s ads. The ads may have been pulled, but that does not change Apple’s continued focus and investment in service. Secondly, the service strategy is not in replacement of their product and software strategy. It is additive, as simple software was additive to the “beautiful box.”
Apple built their business on big ideas, beautiful design and simple software. The latter two are clearly being challenged today even if Apple does win their lawsuit with Samsung.
To continue their astronomical growth Apple understands that exceptional service also needs to be part of the equation. If you need more proof read about how Apple uses Net Promoter Score to delight customers. The only (still outstanding) question for Apple is how to best communicate that to the market.
Like many companies, Apple will struggle with building and maintaining a reputation for excellence in customer service because at the end of the day, it requires humans to execute. Just look at the heat they are taking on their security policy and how it’s customer service reps did not follow internal procedures allowing hackers to take over their customers accounts. That being said, I look forward to seeing them take on the challenge and help move the industry forward. If anyone is up to the challenge, it is Apple.
Important to make the distinction between the strategy – which you make a reasonable case for – and the execution, which in my humble opinion is utter crap. Poor execution of a great strategy never works, and I’ve come to expect a good deal more from Apple.