Apple ‘De-seeded’


Currently, the brand ‘Apple’ is worth anywhere between $145 billion to $170 billion if we were to take the various brand valuation reports. So in essence, if the company were to just hand over the name, logo and other attendant aspects associated with the brand to some company, it would in return get an amount which would be equivalent to the total foreign exchange reserve of the bottom 10 of the top 20 holders of the green back. That tells a lot about a private brand.

But I have a feeling going forward that this is unlikely to sustain. In the next half a decade or so, we will find newer brands upending Apple and the primary reason isn’t that the other brands i.e. Internet brands like Google, Facebook, Cisco would be doing exceedingly well but simply because Apple might falter going forward. Don’t get me wrong, I would be the last person wanting to see this as I really love the brand and would really be saddened, but then it appears that the writing is clearly on the wall. There are 3 strong reasons that I have and let us look at them in detail:

1st Reason: For the past couple of years, there has nothing cutting-edge that has come out of the Apple stable. There are no ‘wow’ products that have graced the Apple portfolio – something that made us sit up and take notice like an iPhone or an iPod or even an iPad. Most of these products were way ahead of the conventional realm that the customers were able to muster – they were due to a certain rigour in a blue-sky thinking. Most were of disruptive nature providing a massive change over the existing product lines. But the past few product offerings are just about providing delta changes over the existing products – be it own or competitors. A better camera or bigger screen doesn’t exactly ring the innovation bell. It doesn’t behove a company which calls itself intuitive and then goes and introduces products which are well just changing a few bells and whistles here and there and packing it nicely. Are we getting any where even closer to what we got when we had a dodgy and clunky candy bar phone in our hand and were introduced to a smooth and slick iPhone. Or for that matter had to fiddle with Walk-mans/Disc-mans with it’s cassettes and discs and in came a unit which had in-built songs and a nice way to toggle through? Highly unlikely, isn’t it?

2nd Reason: The 1st reason brings us to the 2nd important reason as to why Apple seems to run its course. Earlier it was always a strong intuitive power – perhaps the vision of Steve Jobs or the downright dogged disinterest he seemed to have for the consuming classes – that governed the product offerings. Hence, iPhones were available in just 2 colours and one format. ‘This is what I have – take it or leave it’ was the go-to-market spiel. Steve Jobs was legendary in his disrespect towards the proverbial conventional marketing approach – market consulting, research, test market etc. If it was a path-breaking product on the cutting edge, we should launch it in the market – never mind whether the customer is ready for it or not. Never even mind if the new launch is cannibalising our existing portfolio. The customer nearly always looked to take cues from the company rather than the other way round. And it was obvious, a company on the cutting-edge and which prided itself on innovation would necessarily look to lead and be a thought leader as compared to be a follower and try to understand the customer. An intuitive company necessarily has to understand the customer needs silently and provide them with a thought leadership.
Cut to now, where the Apple brought a bigger and an even bigger screen iPhone, not to mention an iWatch. Add the other embellishments – iPhone 5C, various SKU’s (colour options) and you have a portfolio which was going in to near about 10 (thus adding to the keeping cost of the channel)
Following customer’s whims and fancies is a difficult task – the customer wants a bigger screen on a mobile, albeit a smaller on a laptop and as of now it has not made up his/her mind on the size of the screen it loves on a tablet. Thus, following such an animal is fraught with risks and bound to increase the cost to the market – not to mention losing the air of cutting-edge-ness due to being a follower as compared to a leader.
Moreover, just recently Apple launched an iPad air similar to the Microsoft Surface (which it had launched a couple of years back). Something that was not lost on Microsoft too (a company like Apple trying to ape and copy products from its own stable). Since when did Apple start imitating products that others were hawking? This again is the sense that Apple had fallen in to the trap of following and not leading, of introducing what the customer wants now but perhaps afraid to introduce what the customer has little inkling of what it wants. A cutting-edge innovator cuts a very sorry figure when it chooses to follow; it isn’t in its nature. As is the rule of the jungle – the tiger leads but never follows – cause it doesn’t know what it takes to follow or how to follow. That then brings me on to my final reason.

3rd Reason: For the past couple of years Apple has been hoarding a huge cash from the profits that it has generated – cash that it is trying to meaningfully deploy but not been able to. Hence you find the various un-related business that Apple is trying to focus on – self-driving car, investing about a billion quids in completely unrelated business (Didi) and trying to up the service quotient of the company by introducing Apple Pay. So is Apple trying to pivot in to a service company, since going forward the pipeline of cutting-edge products seems dry?

The next few launches from the Apple stable will confirm or deny all of the above, till then it is for Apple to see and plan and for us Apple fans to just secretly wonder.


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