Three things we can learn from Apple’s $US18 billion net profit

Apple recently reported a record profit for the past financial quarter. The $US18 billion net profit is the largest quarterly profit to be posted by any company ever. Apple has gone from strength to strength, so what can we learn from one of the most successful companies in the world?

We can learn three important things from Apple to ensure success, prosperity, and growth for brands around the world.

The three keys to brand growth are:

1) Good product

Apple is a market leader when it comes to product innovation, improvements, and updates. They are not known for being the first in market, but they are known for having better products than everyone else. For example they have not yet released the Apple Watch, they have waited to learn from other similar products so they can improve and innovate their offering. Apple always thinks of the end user when developing their products which is evident in their sleek UX which focuses on minimising options to reduce complexity. This design philosophy is derived from Hicks Law which states that decision time increases as the number of alternatives increase. When you have a good product, people are happy to buy it. It’s simple, people won’t buy bad products. There is a reason why Apple sold over 74 million iPhone 6s in 90 days (this equates to 9 every second).

2) Well remembered

It’s highly likely that when you think about mobile phones you think of the Apple iPhone first. Your brand should strive to be the first brand thought of in your category, if people don’t know your brand, they won’t buy it. Apple spent over $US1 billion on advertising in 2013 just to let everyone know they exist. This may sound extravagant, but it only equates to roughly 6% of their profits. Apple has a very distinctive clean and minimalist style of advertising where the product is always the hero, which means when you see an Apple ad, you know it’s for Apple. Apple has built such strong distinctive brand assets over time such as their white head phones, sleek rounded product design, the “i” prefix in their product names, and the Apple logo. They are clearly recognisable in all of their product categories thanks to their distinctive look and consistent, wide reach advertising.

https://www.youtube.com/watch?v=ybIxBZlopUY&index=5&list=PLHFlHpPjgk71oZFqrr4VWF33NrZaky9Ff

3) Well distributed

Apple stores are hugely successful, they generate the most revenue per square foot than any other retailer in the US. However, only a portion of their products are sold in Apple stores with significant revenues coming from retail partners such as Walmart, Amazon, Best Buy, AT&T, Verizon, and numerous online stores. Apple takes a high reach approach to distribution, their products are always in a nearby store, or a click away. If your product is not readily accessible or available to consumers, they will seek alternatives. Make sure your product is everywhere that potential consumers may be.

Apple iPad – What's old is Newton

Check out this 1993 ad for the infamous Apple Newton.

Now check out this 2010 for the new Apple iPad. I like the subtle hat tip back to the Newton ad. Let’s hope the iPad is somewhat more successful than the Newton. I’d say it will be. Out with the stylus and handwriting recognition. In with the broader acceptance for tablet based and mobile computing.

The Apple iPad – Initial Thoughts

Every so often, a technology comes along that redefines competition within markets:

  • Email redefined the way people communicate, and in doing so, undermined the letter delivery service forever.
  • Phones are in competition with coffee shops.
  • Skype is in competition with domestic airlines.

Now, with the iPad, Apple’s “magical and revolutionary product“, Apple is in competition with TV broadcasters, newsagents and printers as a source of media. Print media organisations aren’t dead – their distribution model is. TV stations aren’t dead – if they produce content – but they are if they simply broadcast it. The iPad represents an opportunity for people to access professional content from anywhere in the world from anywhere. Video, audio, photos, music, games and books.

Where individual songwriters can record and release a song for $1.99 through iTunes, where individual developers and content creators can release individual iPhone Apps for sale, now content creators can release books and other written content through a secure payment and distribution system. Apple’s new iBookStore will erode the print publishing distribution model in the same way digital recording from a laptop , iTunes and peer-to-peer file sharing has eroded the record company business model. It will open up opportunities for organisations and individuals to create and release content of all types.

In 2004, Apple CEO Steve Jobs said that you can listen to music in the background, while movies require that you actually watch them, and that the size of the iPod is not conducive to high quality viewing. With the iPad, Apple has created an almost perfect video (and gaming) device. I believe we will see further opportunities including:

  • Channel iPad: Live content streaming of TV shows, direct from producers – either bypassing or augmenting traditional TV viewing
  • Vote now: Realtime interaction with mass media events and live TV shows – eg: voting
  • Get used to seeing them on people’s laps at the footy / cricket: Sports teams providing rich in-game experiences and interaction via wireless networks in-stadium straight to iPad

Other random thoughts:
It will change the way in which we design websites, as fingers become the navigation tool rather than the mouse. This has happened on the iPhone, there’s no reason why we won’t see a similar shift with the iPad.

Video will be even more important in the communications mix – iPhone / iPad Apps will use more in-app video, and moreso considering YouTube is integrated into the device.

As people will now have a large keyboard on glass (silent typing versus a physical keyboard with buttons), we will see iPads:

  • Becoming more popular than laptops in Uni lecture theatres
  • Being used as a silent replacement for normal notepads in meetings, interviews and presentations
  • Being used as a big screen, synchronised (via Wi-Fi and 3G) version of our everyday notepad

We also see the iPad in the following roles:

  • Being used as a display / interactive device at retail – instantly synchronised, providing personalised product information for each customer.
  • Being used as the ultimate device for sales reps – giving them a big screen for videos, presentations, sales charts, images and the synchronisation and connectivity for productivity on the road.
  • The ultimate “Doctor’s friend”, in the form of a one size fits all repository for scans, images, medical history and in-patient records.
  • Apple’s massive repository of education content on iTunes U will find a logical home – the iPad is the ultimate education tool – relatively inexpensive and simple (restricted) enough that anyone can use it as a learning tool.
  • It will be a hit with the world’s ageing population. Larger screen means larger type which means less strain on eyes. A great platform to build solutions and content for the older generation.
  • The ultimate cookbook for home chefs.