Crunch Time for Apple’s Brand?

People who work in brand admire Apple for very good reasons. An iconic brand that delivers revolutionary, beautifully designed and incredibly profitable products.

apple-of-my-eye

At Wavelength we wonder if it’s crunch time for Apple. Recent Wall Street iPhone 5 expectations were not metbrand loyalty is diminishing whilst Samsung’s popularity is increasing. The share price is suffering too:

Apple's Stock Performance

Is the tide turning for Apple’s stock value?

We wonder if the brand may be struggling to retain its status as the Apple of people’s eye. Why? Here’s our view:

  • Leadership? Steve Jobs was a superb brand marketer, visionary and was core to Apple’s brand story (starting off in the garage etc). Tim Cook has very big shoes to step into. Can he really match up to Steve Jobs with regards to vision, brand strategy and product innovation? A tough act to follow.
  • Questionable brand personality? Apple was recently ordered to remove a banner from its site that hid the court ordered apology to Samsung relating to the recent IP case. Apple has also been in the press with regards to questionable working practices. Will consumers identify with this type of brand?
  • Stronger Competitors?  Samsung is launching products people are buying. Similarly, Samsung is starting to poke fun at Apple’s coolness in its recent campaigns. This indicates growing confidence. More importantly, this advertising strategy serves a deep psychological and emotional purpose – to get Apple consumers to question their decision making motives and chip away at emotions concerning conspicuous consumption. Insidious? Maybe. Clever. Definitely. Similarly in brand hungry countries like China Apple’s position is being challenged by increasingly powerful incumbent brands. Apple’s iPhone 5 is also struggling to get traction in China’s mobile market through up-channel relationships with key players like China Mobile. Apple needs a piece of the Chinese mobile market pie but key channels are not playing ball.
  • Losing focus? Walk into an Apple store. Cool kids, Dancing Dads and Silver Surfers all lean against counters and poke product interfaces with varying levels of success. Are the Cool Kids really happy to hang out with the Dancing Dads and Silver Surfers? We don’t think so.  Focus is an issue that beset BlackBerry when it moved into the youth market with BBM. They’re now refocusing on their core enterprise market.
  • Is Apple A Mirage? Apple is a wonderful brand marketing and user interface design company. It’s also involved with engineering (or more accurately procuring engineered components that are assembled by other firms). Recent lawsuits have opened consumers’ eyes to the fact that a lot of the iPhone is actually made by other brands such as Samsung (memory chips, flat screen displays etc) and LG (displays). Will consumers like the fact they’ve been seduced by a mirage and are paying a premium for that? We think Samsung is being very canny here. The IP case is exposing Apple in this respect.
  • Apple’s getting a little greedy? New products are being launched at an unrelenting rate. Is Apple over leveraging its emotional connection? Is this turning people off? The recently launch iPod provides an example. Who will buy this?
  • Product price points? Even the most die hard Apple fans have to confess price point for the new MacBook Pro with retina display is well, eye watering.
  • Is the brand losing it’s lustre?It’s got to the stage that Apple products are being sold on Groupon. Who would have thought that? We’re not sure Groupon is good for brand value.
apple and groupon - who would have thought that.

It has to be seen to be believed. Apple on Groupon.

  • Is Apple becoming a control freak? Talk to anyone that tries to use a non Apple product with an Apple product. They live in a world of pain. Consumers need choice and to be (or at least feel as if they are) in control. Apple doesn’t provide this. Its logic for developing a closed environment i.e. its bullet proof OS was shattered with the OSX hacking scandal. The argument for control starts to unravel.
  • Other App Markets are Growing? Apple stole an early lead with regards to apps. It was the prototypical brand.  Android is now catching up with a more flexible and open developers’ environment. Choice is increasing outside the App Store. There’s a plausible alternative and people are taking it.
  • Questionable Product Quality? Yes, Apple products are aesthetic delights and user interface masterpieces. At the core product level there have been problems. The infamous “death grip” and mapping issues spring to mind. If a brand can’t deliver core functional benefits i.e. talking and using maps people will churn away before they can enjoy more emotional and experiential benefits which is where Apple truly excels.

Lets be clear. We think Apple is an amazing brand. Truly incredible.  We all use Apple products in one way or another at Wavelength. We’re not trying to knock the Apple cart. It’s always easy to criticise a top dog. That’s for sure. We simply wanted to share our views on where the brand is, why it may be experiencing some of its current issues and the issues it may need to monitor / address going forward.

We’d be interested in your views…

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11 responses to “Crunch Time for Apple’s Brand?

    • Thanks for this Hilton. Yes, it’s hard to see Apple as being a credible Challenger brand. This is a mantle other brands are now taking on e.g. Samsung and giving Apple some of their own medicine with.
      It’s going to be an interesting year…

  1. I find this interesting as I have been a loyal Apple customer until recently when I opted fir th Samsung Galaxy S3 rather than the iPhone 5. I considered it a fail on Apple’s products. Also I have been seriously considerinng switching to the new Surface tablet. I think sone of it is a loss of creativity on the functionality, some is the battles it is fighting aand sone the loss of Steve Jobs. I some ways Jobs was the brand, when forced out the brand faltered and ultimately they asked him back. Apple grew and became innovative again. I am not sure his attention to detail and function or his drive for Apple can truly be replaced.

    • Hi Danielle, I think you make some good points and I share you sentiment. I think times are changing for Apple and I also think it’s hard to estimate the influence of Steve Jobs no longer being with us. They’re very big shoes to fill. For creative work / music it’s hard to touch Apple but if an OS was to focus on this I think Apple’s core market would start to look elsewhere. Thanks for getting in touch.

  2. Very thoughtful piece. I wonder about the “loss of Jobs” factor, though. His passing is recent enough for much of the current crop of product releases to reflect at least the halo of his influence, no? And the high price and “brand bully” allegations didn’t materialize overnight. I have a nagging feeling that Jobs passed at just the right time to retain his status as an icon.

    • Hi Eric,

      Thanks for your kind words. Appreciated. You make a number of interesting points that could well be not too far off the mark. Although he’s still alive people say a similar thing about Tony Blair and his period as the PM in the UK. Timing can be everything.

  3. Apple has lost a lot of its appeal with the passing of Steve Jobs, for sure. The maps screw up, was a MASSIVE mistake. All eyes were on Apple’s first post-Jobs big release of something new, and it was a big old mess. Steve would not have put corporate strategy (get rid of everything “Google”) in front of user experience. Because Steve was all about the user. And a perfectionist. Not great. And definitely the first crack in the garden wall….

    All the negative press they’re getting just pushes the down fall further and further… They would have to come up with “the new big thing” soon, if they want to show everyone wrong. Hope they can do it, because I love this brand. And it’s stock too 😉

  4. Hi Viola,

    Yes, Steve Jobs is certainly going to be a hard act to follow. Similarly, finding the next ground breaking innovation is going to be touch as Apple has set the bar so high. That’s not to say it can’t be done but a mixture of stronger competition, brand hiccups (maps, OS, death grip etc) in addition to Steve Job’s no longer being with us amplify the challenge. Lets watch this space (and I hope your stock bounces back!).

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