Following its most recent earnings call, Apple is now worth a trillion dollars. A former creative director of the company believes its recent history has been too “vanilla”, but is vanilla, in fact, effective?
Last week, Apple, the maker of the iPhone and the first ever company to be worth a trillion-dollars, announced its quarterly results. On the back of iPhone sales, the company has managed to get its loyal customers to pay more than ever for a smartphone 10 years after having brought together the elements of this revolutionary technology.
At the time of the iPhone X’s launch, I wondered whether Apple had finally reached the apex of its own desireability, and whether this new $1000 price tag ($1,300 in the UK) would finally warn its core consumers off.
Not so, it transpires. According to Tim Cook, speaking on an earnings call on Tuesday told investors that the company had sold 41.3 million iPhones in the last quarter. While this reflected a less-than 1% increase year on year, the key figure is the profit increase. The iPhone X’s high price tag had convinced its customers to pay an average of 20% more for its devices. Meanwhile, the company’s “other products” – read: accessories and HomePods – and its services also saw promising growth.
The strength of the phone in driving profits is impressive – but what of its strategy? The day before the results were announced, Apple’s former Creative Director, Ken Segall, credited with building the following for the Jobs-era iteration of the brand, came out with criticism of the brand’s current marketing strategy.
Specifically, he warned of a failure to build a “personality for the phone, a thing that people might want to be part of”, because the competitive set has developed features equal to or more advanced than the iPhone’s. He has a point. The iPhone X needed a major innovation to mark the tenth anniversary of the original iPhone. So the company improved the camera, improved the software that powered it, loaded in a rocket-grade processor. It extended the screen to come as close as any mass-market phone to doing away with bezels completely. Without major innovations in features – the strategy to which the company’s current advertising adheres – Segal maintains that Apple has trouble down the line.
Read in the context of any other company, these are mere incremental changes and are unlikely to move markets. Huawei, for instance, brought out a near-bezel-less phone. Samsung increased its ratio of screen to body and outsells Apple. They haven’t come close to Apple’s iPhone, though, or its market capitalisation, for that matter.
Speaking to the Telegraph, he recalls how Steve Jobs, Apple’s mercurial former CEO, whose aegis arguably remains a major part of the company, wanted society to be involved with the brand on an emotional level. “Steve had in his head that if people had a deep, emotional connection to Apple, customers would not give it up even if it was shown to make a poor judgement in some part of the world or was found to be in violation of the law, like European taxes, for example.”
Without a major innovation in the iPhone X and a higher price point, has the company not tested its balance? The taxes that the EU told Apple to return to Ireland didn’t long stick in the public imagination and neither did the absurd price point of its latest phone. Steve Jobs, however, does loom large in the public imagination. There’s a Michael Fassbender film to prove it. The iPhone may not be the bestseller, but it’s still the “best phone you can buy right now” by many people’s estimations. Both are present, both are visible in the culture.
“As a marketer I look at that and can see the difference between Steve being there - and not being there - very clearly.” Jobs was a unique leader at a pivotal moment for the company; his core quality, Segall says, was decisiveness. His criticism, then, of Cook is the fact that he follows the advice of those around him, people that appear to Segall “a little vanilla.”
Segall’s position arises from marketing’s traditional duty, one in which the ideas of one department are enhanced with the idea of another, which then sell them. Vanillaness in an organisation can lead to bland decisions, safe decisions – wrong decisions in the long-term as people look after their jobs in the short-term. Alternatively, the best decision might be to continue with the strategy that has continued to deliver: create beautiful products, make them enviable, clean, and easy. Sure, it’s vanilla, but vanilla – it transpires, is effective.