Cool and Innovative Branding – The Forbidden Fruit of Information Technology
Today the Apple brandmark stands for innovation, reliability and cool products. It reflects functionality, balanced with product beauty. The company has managed to turn the box of wires hidden in the study into a “must-have” lifestyle item. Few people realise that we could have had iPod and iPhone mobile digital devices (iPod and iPhone) and iMac computers (iMac) 10 years earlier. Still fewer people realise how Apple is going to change their lives and affect their future.
Chased out of paradise through the Windows of Bill Gates
In the late 1970s, Steve Jobs and Steve Wozniak created the Apple Macintosh, commonly shortened to Apple Mac, the first commercially successful personal computer to feature a mouse and a graphical user interface (GUI, pronounced gooey) instead of a command-line interface.
In the early 1980s, Jobs was among the first to see the commercial potential of the mouse-driven GUI. Jef Raskin, an Apple employee, who envisioned an easy-to-use, low-cost computer for the average consumer, wanted to name the computer after his favourite type of apple, the McIntosh, but the name had to be changed for legal reasons. The brandmark, an apple with a bite taken out of it signifying the tasting of the forbidden fruit, truly delivered just that. In 1985, the combination of the Mac, Apple’s LaserWriter printer and Mac-specific software such as Aldus PageMaker, enabled users to design, preview and print page layouts complete with text and graphics – an activity which would become known as desktop publishing (DTP). Initially, DTP was unique to the Macintosh (yes, there was life before Microsoft and Bill Gates), but eventually became available to IBM PC users as well.
The company’s substantial market share dissipated in the 1990s as the personal computer (PC) market shifted towards PCs that were IBM-compatible when Microsoft started running its Windows operating system (Windows) instead of the outdated and cumbersome MS-DOS operating system (MS-DOS). For many serious computer enthusiasts, Windows was seen as a rip-off of Apple’s operating system, compliments of Mr Gates. That did not stop Bill’s appetite; The Microsoft Internet Explorer Internet browser (Internet Explorer) is another rip-off – this time with Netscape as the victim.
In 1988, Apple sued Microsoft and Hewlett-Packard for infringement of its copyrighted GUI, citing the use of rectangular, overlapping and resizable windows. Unfortunately for PC users worldwide, the case was decided against Apple after four years, as were later appeals. I say unfortunately because the world would have been a better place if Apple had been allowed to become the dominant desktop computer. Imagine what life would have been like if we had the iPod, iMac and iPhone 10 years earlier!
In 1998, Apple consolidated multiple consumer-level desktop models into the “Bondi Blue” iMac G3 all-in-one, which was a massive sales success and revitalised the Macintosh brand. One of the first products made under CEO Steve Jobs since he left the company in the mid-1980s, it brought Apple back into profitability. Its translucent blue plastic case, later in many other colours, is considered an industrial design hallmark of the late 1990s. By introducing colour, Steve Jobs shifted the paradigm from Henry Ford’s (Gates/Dell) famous statement that you could have any colour as long as it was black (grey) to any colour you wanted. Companies treated Apple Macs as a fashion accessory. Receptionists displayed iMacs on their desks, regardless of the suicide blonde (dyed by her own hand) receptionist’s own computer literacy.
Apple’s focus on design has allowed each of its subsequent products to create a distinctive identity, and Steve Jobs famously declared that “the back of our computer looks better than the front of anyone else’s.” The iMac was recognisable on television, in films and in print. This increased Apple’s brand awareness and embedded the iMac in popular culture.
The iMac and other Macintosh computers can also be seen in various movies, commercials, and TV shows (both live action and animated). The iMac has also received considerable critical acclaim as the “Gold Standard of desktop computing”. Forbes magazine describes the original candy-coloured line of iMac computers as being an “industry-altering success”.
The “blue and white” artistic look was applied to the Power Macintosh. The later iMac and eMac computers were accompanied by a new design, dropping the array of colours in favour of white plastic. Current Mac systems are targeted mainly at the home, education and creative professional markets, and use aluminium enclosures. Today many PCs are more design-conscious than before the iMac’s introduction. Multi-shaded design schemes are now quite common and some desktops and laptops are available in colourful, decorative patterns.
Apple’s use of translucent candy-coloured plastics inspired similar designs in other consumer goods. Grilling machines, portable electronics, pencil sharpeners, video game consoles and peripherals (including the Nintendo 64, which was released in special edition “Funtastic” colours), featured the translucent plastic. Apple’s introduction of the iPod, iBook G3 and iMac G4, all featuring snowy white plastic, inspired similar designs in consumer electronic products.
In recent years, Apple has seen a significant boost in sales of Macs. This is due, in part, to the success of the iPod, a halo effect where satisfied iPod owners purchase more Apple equipment. iPods have recaptured the brand awareness of the Mac line that had not been seen since its original release in 1984. From 2001 to 2007, Mac sales increased continuously on an annual basis. In October 2007, Apple reported a shipment of 2 164 000 Macs, exceeding the previous company record for quarterly Mac shipments by more than 20%.
The ability and option to run Windows on the same hardware means that the much larger Windows software base is not excluded. Apple have made their technology more accessible and reduced some of the resistance to change that the PC Windows users might have felt. In the first quarter of 2008, Apple Mac computers made up a total of 66% of all computers sold above US$1 000 and 14% of all computers sold. Market research indicates that Apple draws its customer base from a higher-income demographic base than the mainstream PC market.
Steve’s new job in paradise
Steve Jobs, co-founder, chairman and CEO of Apple Inc and the former CEO of Pixar Animation Studios, is a quirky, individualistic Silicon Valley entrepreneur, emphasising the importance of design while understanding the crucial role aesthetics play in public appeal. Steve Jobs himself can be seen as a large part of Apple’s branding success. Steve Jobs is Apple. Some brands use superstars – Apple used Steve. His work in driving forward the development of products that are both functional and elegant, has earned him a devoted following.
Today, Apple computers are recognised for their innovative, easy-to-operate GUI and reliability, which includes resistance to viruses. This is due to a smaller user base, which equates to a smaller target. In addition, in the average hacker’s code of ethics, Microsoft is seen as the baddies, and Linux and Apple as the goodies, resulting in fewer viruses being targeted at Apple’s operating system.
Moreover, Apple computers did not suffer from the Y2K syndrome because someone used his noodle when writing the code for the date line. I think Y2K was a case of Revenge of the Nerds. The fact that countries where very little was spent on tackling the Y2K bug (such as Italy and South Korea) fared just as well as those that spent much more (such as the United Kingdom and the United States) has generated a heated debate on whether the absence of computer failures was the result of the preparation undertaken or whether the significance of the problem had been overstated.
In recent years, Apple Inc has branched out, introducing and improving upon other digital consumer electronics. With the introduction of the iPod, iTunes application program and the iTunes Store, the company has made forays into consumer electronics and music distribution. Apple focused its development on the iPod line’s unique user interface and its ease of use, rather than on technical capability. The Apple iPod, like the iMac, has become a fashion accessory and is sold alongside lipstick, clothes and other fashion goods. For Valentine’s Day 2009, Apple Online Stores offered free engraving on the iPod which comes in nine vivid colours with a curved, all aluminium and glass design.
Teenagers think it is the ultimate status symbol that outclasses all other MP3 players and Apple’s famous brandmark is often displayed on vehicles, signifying the owners’ status as an iPod owner. iPods have won several awards, ranging from engineering excellence, to most innovative audio product, to fourth-best computer product of 2006, and PC World says that the iPod line has “altered the landscape for portable audio players”. Several industries and companies such as Sony Ericsson and Nokia are modifying their products to work better with both the iPod line and the AAC (Advanced Audio Coding) format.
In addition to their reputation as respected entertainment devices, iPods have also become accepted as business devices. Government departments, major institutions and international organisations have turned to the iPod line as a delivery mechanism for business communication and training – Duke University in the United States has provided iPods to all incoming freshmen since 2004.
Interestingly, in 2006 analysts downgraded Apple’s forecast earnings, citing the market saturation of the iPod as the reason. They were wrong; in April 2007, it was announced that Apple had sold its one-hundred-millionth iPod and, by September 2008, more than 173-million iPods have been sold worldwide, making it the best-selling digital audio player series in history, with a market share of 73%.
In 2007, Apple entered the cellular phone business with the introduction of the cool iPhone, a multi-touch display cellphone with a magnificent user interface, iPod, and Internet device. The Apple iPhone, like the iPod, rivals all competition such as the geeky Blueberry and the H◊@$& Windows something. Damn, I can never remember Hdpt Tytn and had to look it up on Google. Judging from the geeks’ blogs and the rapid decrease in market share, it is no surprise: the Hdpt Tytn abortion runs on Windows Mobile software (Windows Mobile) developed by Bill’s army of self-absorbed pizza-gobbling techies and Window Washers.
There are currently more than 25 000 applications available for the iPhone and even an application called Kindle for iPhone. It supports Amazon’s Kindle, a software and hardware platform developed by Amazon.com for reading e-books and other digital media. No other smartphone is capable of this, so now you can read a Kindle e-book on your iPhone.
In 2001, Apple entered the retail market with its first Apple Retail Store, dealing in computers and consumer electronics. As of February 2009, Apple has opened 251 Apple Retail Stores worldwide, including the United States, the United Kingdom, Canada, Japan, Australia, Switzerland, Italy, Germany and China.
The stores carry Apple computers, software, iPods, iPhones, third-party accessories and other consumer electronics such as the Apple TV. Many stores feature a theatre for presentations and workshops, the Studio for training with Apple products, and all stores offer a Genius Bar for technical support and repairs, as well as offering free workshops to the public.
Every Apple Retail Store has a variety of highly trained staff members for specific tasks. A Concierge performs assorted customer service tasks, a Specialist answers technical questions about Apple products, as well as third-party accessories, and a Genius at the Genius Bar diagnoses issues with Apple products, as well as making repairs or providing replacement services. Creatives provide training sessions on a variety of Apple professional software for music composition and film editing. All Geniuses and Creatives are trained and certified at Apple headquarters in the USA.
Store openings have become special events among avid Mac users, attracting thousands of customers who line up before daybreak or even the night before. The first thousand customers receive a free T-shirt bearing the store’s name. Apple has received numerous architectural awards for its store designs. Testimony to the company’s innovative visual design philosophy and standards is one of the most striking Apple Retail Stores situated on Fifth Avenue in New York City. The glass cube containing a giant suspended Apple brandmark is the only portion of the Apple Retail Store rising above plaza level. Once inside, customers take a central cylindrical transparent glass elevator or surrounding spiral staircase to the sales floor below.
The Apple Retail Stores also give the company an ideal platform to glean some valuable input directly from the customers visiting their stores, such as their likes, dislikes and suggestions. Before the advent of Apple Retail Stores, this information was traditionally passed on from a third-party reseller and was often inaccurate, incomplete and distorted.
The forbidden fruit back on the shelf
Microsoft groupies should take note that, at the end of 2008, Apple Mac computers had a market share of 14% of all computers sold and iPhone sales surpassed Research In Motion’s (RIM) BlackBerry sales of 5,2-million units in late 2008 after being on the market for less than two years. Apple iPod has a market share of 73% of all MP3 players sold. For the final twist of the knife now that it has been pushed in nice and deep, Mozilla’s Internet browser, Firefox (the Phoenix that rose out of the ashes of Netscape’s demise by Microsoft’s Internet Explorer), has increased its market share to 23,3% in August 2009. Apple’s Safari application program (Safari) has a market share of 4,1%. As a result, Microsoft Internet Explorer’s market share plummeted to 66%, the largest loss since 2008 and in spite of the launch of Internet Explorer 8 in March 2009.
Apple Mac computers have always been reliable and innovative, and have the world’s most advanced operating system, but potential customers only discovered this after owning an iPod or an iPhone. These two products are less than half the price of an Apple Mac computer and have exposed the customer to Apple products’ legendary brains and beauty. This has created the halo effect that inspires people to buy and try Apple’s other products, such as the MacBook (Apple’s version of a laptop) – currently responsible for most of Apple’s increasing market share – and Internet browser, Safari. Slowly the world is demanding and is being allowed a taste of the forbidden fruit.
With Goliath firmly in David’s sights, it is no wonder Steve Jobs was listed as Fortune magazine’s Most Powerful Businessman of 2007, which named Apple Inc the most admired company in the United States in 2008 and in the world in 2009.
The one thing that Bill with all his money and power would love to copy the most, but this is sadly lacking at Microsoft, is Apple’s brand equity: the Apple brandmark that stands for cool innovation and reliability. Sorry Bill, fortunately, this time around it is intellectual property and you may not touch it. This brings me to the Macintosh clone issue. By 1995, Apple Mac computers accounted for about 7% of the worldwide desktop computer market. Apple executives decided to launch an official clone programme to expand Macintosh market penetration. This entailed the licensing of Macintosh ROMs (read-only memories) and system software, which generated quick revenue for Apple during a time of financial crisis.
Would you buy a Hackintosh?
Soon after Steve Jobs returned to Apple, he backed out of the recently renegotiated licensing deals with Mac OS operating system software (Mac OS) licensees, as they still proved to be not financially viable. The clone makers’ licences were valid only for Mac OS 7 and, with Apple’s release of Mac OS 8, the clone manufacturers were unable to ship current Mac OS versions. Apple bought Power Computing’s Mac clone business for US$100-million, ending the clone era.
Wikipedia reports that: “Jobs publicly stated that the programme was ill-conceived and had been a result of ‘institutional guilt’, meaning that for years, there had been a widely held belief at Apple that had the company aggressively pursued a legal cloning programme early in the history of the Macintosh, consumers might have turned to low-priced Macintosh clones rather than low-priced IBM/PC-compatible computers. Had it pursued a clone programme in the 1980s, in this view, Apple might have ended up in the position currently occupied by Microsoft – an extremely powerful company with high profit margins and a wide base of consumers perpetually dependent on its system software products.
Jobs claimed it was now too late for this to happen, that the Mac clone programme was doomed to failure from the start, and since Apple made money primarily by selling computer hardware, it ought not engage in a licensing programme that would reduce its hardware sales.
Subsequent to a major gain in computer market share for Apple after the success of the iPod, large computer manufacturers such as Dell have expressed renewed interest in creating Macintosh clones. Apple vice-president of Worldwide Product Marketing, Phil Schiller, said the company did not plan to let people run Mac OS X on other computer makers’ hardware. “We will not allow running Mac OS X on anything other than an Apple Mac,” he remarked.
However, modified versions of Mac OS X v10.4 and 10.5 called Mac OSx86, can be used on generic PC hardware. In April 2008, the Psystar Corporation announced the release of a computer with Mac OSx86 preloaded, called the OpenComputer, making them the first commercially distributed “Hackintoshes”. In July 2008, Apple filed a lawsuit against Psystar. A counter-suit filed by Psystar Corporation was dismissed in November 2008.
In December 2008, Psystar Corporation filed revised claims and, in May 2009, Psystar Corporation filed for Chapter 11 bankruptcy protection, which would allow the company to pay off its debts and re-emerge as a business in the future. In spite of this, the company continues to sell its computers with Apple’s Mac OS X Leopard installed. Would you buy a Hackintosh from them?
Der PC mit Mac OS X (the PC with Mac OS X) is the slogan of PearC, a German firm which exploits an alleged legal loophole in German law allowing PC hardware to be sold with Mac OS X pre-installed in central Europe. Its brandmark is a clever pass-off of the Apple brandmark. The design is a pear complete with a stem and leaf (positioned in the opposite direction to that of Apple) at the top of the fruit. End-user licence agreement for Mac OS X forbids third-party installations of v10.5 Leopard and v10.6 Snow Leopard and we will have to wait and see what action Apple will take in future.
So why doesn’t Apple want to run the successful and popular Mac OS X so superior to Windows on other computer makers’ hardware? The clue is in the words of Apple’s Phil Schiller: “… and since Apple made money primarily by selling computer hardware, it ought not engage in a licensing programme that would reduce its hardware sales.” Apple has taken a long-term view on the market as a whole: the company does not restrict you from owning Mac OS X but it comes with the Apple hardware. The same applies to other hardware and software vendors, such as Garmin.
However, Apple’s Mac is the only hardware that can run Mac OS X and Windows.
This is the heart of the brand’s unique special property or proposition (USP) that makes it uniquely valuable to existing and future customers. This ability now allows the customer to have the best of both the PC and Mac worlds. In time, with Apple’s increasing market share (which could result in a reduced price), its growing reputation for great designs and its reliable hardware platform that runs stable operating systems including Windows, customers will increasingly migrate to Mac computers. Thanks to Apple, there is indeed a brave new world waiting for us.
Apple, Apple TV, eMac, iMac, iPhone, iPod, iTunes, LaserWriter, Leopard, MacBook, Macintosh, Mac OS, Safari, Snow Leopard and are trademarks or registered trademarks of Apple Inc, registered in the United States and other countries.
Internet Explorer, Microsoft, MS-DOS and Windows Mobile are trademarks or registered trademarks of the Microsoft group of companies.
The author respects the intellectual property of others and all trademarks and registered trademarks contained in this article are and remain the property of their respective owners.
This article is an independent publication and has not been authorised, sponsored or otherwise approved by Apple Inc.