Apple’s Strategy and Ad

26 11 2013

There are significant differences in strategy and advertisement of Apple Inc. and it’s competitors.

Let the CEO Tim Cook talk to understand some basic strategies and attitudes with an overall impact on the development of products and their advertisment.

Innovation
Some people see innovation as change, but we have never really seen it like that. It’s making things better. iOS 7 is a great example of that. It’s significantly better than 6 or any of those that came before it, and obviously significantly better than the other OS out there.

Mobile market
For smartphones, I think it’s even more a two-operating-system world today than it was before. Maybe that changes. Maybe it doesn’t, but that is the state of things today. I think that Android is more fragmented than ever and, as a result, when you look at things like customer satisfaction and usage, you see the gap between Android and iOS being huge.

There is a huge difference between market share of units and usage share. And it shouldn’t surprise anybody that it’s like that. Anybody that’s used both should not be surprised that that is the natural result. And that’s really important to us because we have never been about selling the most. We’re about selling the best and having the best experience and having the happiest customers.

Android’s market share
I don’t think of Android as one thing. Most people do. I mean, from a consumer point of view, if you look at what Amazon does with Android, forget the name Android for a minute. If you’re coming down from a different planet and you were going to name it, you wouldn’t name it the same thing as what another company does. If you compared that to what Samsung does, I’m not sure you would name that the same thing either.

The fragmentation
It’s a growing problem. It’s a compounding problem. And think about all these people that they’re leaving behind from a customer point of view. People do hold on. Most people hold on to their phones a couple of years. They enter a contract and honor that contract and then upgrade after that two-year period. So in essence, by the time they buy the phone, many of these operating systems are old. They’re not the latest ones by the time people buy. And so by the time they exit, they’re using an operating system that’s three or four years old. That would be like me right now having in my pocket iOS 3. I can’t imagine it.

Software and Hardware
We’re not looking for external validation of our strategy, but I think it does suggest that there’s a lot of copying, kind of, on the strategy, and that people have recognized that importance.

Now, we’re well beyond just the surface level of design of hardware and software. We’re deep in the guts. This week you saw the A7. You saw our new M chip. Well, these are only possible because many years ago we elected to start building our own silicon team, and now we have many, many people designing silicon.

And you saw us go to 64-bit. Well, why are we able to do that first? It’s because we’re at that level of being vertical. Does anybody—do these other three companies have silicon expertise? You can answer that. Maybe they have something that I’m not aware of, but in terms of the depth of it ….

You look at innovation like the iPhone’s camera and the detail that went into the camera. Most people hear the word camera, and they think of hardware. And hardware is really important to it, you know? With the stuff we did with the flash on this. But it’s software, and it’s the silicon—I mean, it’s everything.

So the way I think about Apple is that the magic of this place really comes up at its best when hardware, software, and services come together.

And it’s sort of the intersection of those things is where things get incredibly magical. So facilitating that to happen and getting the collaboration level for that to happen is the magic here.

And one of my proudest moments is when other people see that. They don’t know that they’re seeing that, and that’s also the beauty. They don’t have to do it. But look at these (gesturing to iPhones). These are perfect examples where the hardware and the software and the service begin to blend.

Excerpts (Businessweek, 2013-08-20)

Innovation …

The Boston Consulting Group (BGC) reported ‘Apple is still the most innovative company in the world’.

The report singles out five factors that lead to strength in innovation:
• Senior-management commitment
• The ability to leverage intellectual property
• Customer focus
• Innovation portfolio management
• Well-defined and governed processes

“Companies that continually create value over the long term—meaning decades or more—learn how to ingrain the ability into their corporate makeup; it becomes part of their culture and DNA,” said Andrew Taylor, BCG partner and a coauthor of the report. “They create value, jobs, and growth because of their ability to institutionalize innovation.”

Summary …

  • Innovation
    We are making things better.
  • Market
    And that’s really important to us because we have never been about selling the most. We’re about selling the best and having the best experience and having the happiest customers.
  • Fragmentation
    So in essence, by the time they buy the phone, many of these operating systems are old. They’re not the latest ones by the time people buy.
  • Software, hardware, services
    It’s because we’re at that level of being vertical. Does anybody—do these other three companies have silicon expertise?
    So the way I think about Apple is that the magic of this place really comes up at its best when hardware, software, and services come together.

Apple cares about more than just creating a consistent and unique experience for each of their devices individually. In my opinion, Apple has created a more complete and user-friendly ecosystem that encompasses much more than the features or abilities of a single phone. If your total investment in Apple is just a single iPhone, then switching between iOS and Android with each upgrade opportunity is not just possible; it is likely very probable.

However, if you have taken full advantage of everything Apple has to offer users of iOS devices, then switching platforms may be harder than you think. For many iPhone owners, the question is more than just upgrading a phone to the next great thing. It is also about how much one has totally invested in Apple as a whole.
Or just in one sentence:

Apple keeps hardware, software, services, and entertainment in one place.

SWOT analysis …

Considering the strategy, the philosophy, and the actual market a SWOT analysis (Strengths, Weaknesses, Opportunities,Threads) is an appropriate visualized summarization. I added some points not mentioned by Tim Cook.

20131027-143702.jpg

Note
Created with the app Inspiration for the iPad
For further information about a concept map and the app Inspiration see
Mind Maps vs Concept Maps

Equity ratio …

Equity Ratio (Total shareholders equity / Total Assets; for Apple in 2012 = 67%) is an indicator of the level of leverage used by a company. The Equity ratio measures the proportion of the total assets that are financed by stockholders and not creditors. A low equity ratio will produce good results for stockholders as long as the company earns a rate of return on assets that is greater than the interest rate paid to creditors. With 67% Apple is an Alpha Male amongst others.

The company doesn’t want to serve the low-budget market. Focussing on customers with a certain dispensable income opens the door to pull them into the ecosystem. That is the reason why the new iPhone 5C is still an iPhone built with high quality materials and completely integrated in Apple’s ecosystem.

Advertisement …

In September 2013 Apple won the Coolest Brand award in the UK with Aston Martin and Rolex in 2nd and 3rd place.

Please refer to TheTechStorm

That’s because of their very special advertisement, reflecting strategy and philosophy of the company. It inspires people much more than ad of other brands. Here is a brief summarization of the most famous slogans of the company.

Apple ad never takes care of competitors in contrast to Samsung as well as Microsoft.

Apparently, Apple phones just doesn’t work. Even putting an Apple to your ear and hoping that you will hear more than the echoes from the mountain doesn’t seem to help. They make you suffer terribly. Once you got a Samsung, you perform a mating dance toward a mountain ram. In any case the clear implication is that iPhones don’t work in the Icelandic mountains, while Samsung’s Galaxy S4 turns you into a ninja.

At least that’s what the ad from Iceland says.

Apple’s ad always focusses on it’s own products often emphasizing features other products do not offer. Apple never mocks devotees of other brands. Remember Tim Cook saying ‘We’re about selling the best.’ so there is no need to take care of other products. This can be seen as conceited but in either way as considered opinion.

20130926-061255.jpg

Feel free to download this mind map.

The alternative file formats have been created with iThoughts HD for iPad (.ITMZ file format). Compatibility to other tools is limited.

Application File format
Adobe Reader PDF
iThoughts ITMZ
MindManager MMAP
XMind XMIND

Strategy and success …

The success of years of continuous development is documented in an article of Amit kumar Singh.

The Friendliest Smartphone OS

He talks about

  • Cognitive Load
    the sum of all elements one needs to be familiar with in order to be able to use a device
  • Efficiency and Integration
    the access to key features of a smartphone
  • Customization
    the sum of features to customize the device
  • User Experience Friction
    the sum of experiences annoying users

and shows us a comparison between BlackBerry, Windows Phone 8, Android, and iOS 6 and 7.

Related links …

Designed by Apple

iPad Mini ad

Tim Cook Interview (Busiessweek)

Thanks for reading.


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