The Apple Product Strategy
When we talk about Apple, what usually comes to mind is its product line, which has become equated with high quality, invention and innovation. Preorders come rolling in even months before the release of a new product, and customers barely even blink when it comes with a steep price tag attached. Why, you ask? Because it is an Apple product, which means that it is not something to take lightly. But what this really means is that Apple has a solid product strategy in place, and it is actually working.
In this article, we will 1) briefly look at Apple’s product portfolio and 2) investigate Apple’s product strategy.
A BRIEF LOOK AT APPLE’S PRODUCT PORTFOLIO
When it comes to consumer electronics and computing technology, one of the most recognizable names in the world is Apple. It is one of the world’s largest information technology company, and ranks in the top three manufacturers of mobile phones in the world. In a 2014 survey, it was adjudged as the most valuable brand in the world, valued at close to USD120 billion.
Originally named Apple Computer Inc. when it was founded in 1976 by Steve Jobs, Ronald Wayne and Steve Wozniak, it was originally focused on hardware development, primarily on personal computers. It wasn’t until in 2007 when it decided to shift to developing consumer electronics products that it gained a new identity as Apple Inc.
The products that are best identified with Apple include the following:
- Mac computers (i.e. iMac, Mac Mini, MacBook, MacPro, MacBook Air, and MacBook Pro)
- iPod portable digital media players (i.e. iPod Shuffle, iPod Nano, and iPod Touch)
- iPhone smartphones, evolving as follows:
- First generation iPhone
- iPhone 3G
- iPhone 4
- iPhone 5
- iPhone 5S
- iPhone 5C
- iPhone 6s
- iPhone 6s Plus
- iPad tablets, evolving as follows:
- iPad (iPad first generation, iPad 2, iPad 3, iPad 4)
- iPad Mini (iPad Mini first generation, iPad Mini 2, iPad Mini 3, iPad Mini 4)
- iPad Air (iPad Air first generation, iPad Air 2)
- iPad Pro
- Apple Watch smartwatch
- Apple TV
- Computer accessories
- Operating systems (OS X and iOS)
- iTunes (media player)
- Safari (web browser)
- Creativity and productivity suites (iWork and iLife)
- iTunes Music Store
- App Store (for Mac and iOS)
- Apple SIM (SIM card service for iPad
APPLE’S PRODUCT STRATEGY
Quality Product with Premium Offerings
The entrance of other players in the consumer electronics market meant that Apple is getting stiffer competition, especially since these competitors are churning out smartphones and tablets that are significantly lower in price. Apple CEO Tim Cook, however, is unfazed by this non-threat, calling these lower-cost counterparts as the “junk market”. According to Cook, Apple is not catering to this junk market, which is why it opts to stick to offering more expensive products that have a lot more, and better, things to offer, than what these “junk markets” are currently fielding to buying customers.
There is no denying, however, that the best product strategy that Apple employs is coming up with very good products. They call it the “great product” strategy. By continuing to hold on to high standards of quality, Apple refuses to get on the bandwagon that most other device makers are using, where they pack their products chock-full of features that, while they may be impressively advanced, actually end up making operating the device actually more complicated and not at all user-friendly.
Packaging is certainly not an area where Apple is lacking. It is known for being a company that provides clean and simple, yet functional packaging to its products. More than being flashy, it tends to boast more of a utilitarian aesthetic, but without coming across as boring or plain.
The “great product” strategy also focuses on quality over quantity. While other manufacturers’ strategy entail churning out products one after another in a short span of time and having such a diversified product mix, Apple preferred to stick to what it does best. This means that it focuses on selected products and continues enhancing them, instead of branching out to create other products within the same category.
If you look at the numbers, it is true that other companies, such as Samsung, are showing higher figures when it comes to unit sales. They are starting to occupy a larger share of the market. But this does not worry Apple. Instead, it continues to focus on its loyal customers and, despite occupying a smaller percentage of the market, is able to position itself as a premium brand and a maker and provider of top quality products.
As such, Samsung was able to eat up a huge chunk of the market because of its production of cheap and low-end gadgets. That market is not really what Apple is aiming for, and it is comfortable with the market it has right now.
New Updates, Not Necessarily New Products
Market trends are constantly changing, and demands are certainly increasing. Other companies’ response to these changes may be “give them new products”. What Apple does is to “improve the products that it has”. This explains the product refreshes and updates that are released on a schedule set by Apple. Thus, the tweaked or updated versions retain the best parts of the old versions, with the “problematic” features corrected or improved. Clearly, this means that the latest iPhone, the iPhone 6 Plus, is a much improved version of the first generation iPhone, or even the previously released iPhone 6.
These changes put the Apple product development team in a good light, particularly in the eyes of Apple users, since it implies a commitment on their part of seeking continuous improvement for their product offerings. It also effectively attracts new users, thereby increasing the market share of Apple.
Control of Both Software and Hardware
Aside from producing the hardware – the smartphones and the tablets – Apple maintains total control of its platform, which is not something that can be completely said of Apple’s main rival platform, Android, which can be modified and tweaked by device manufacturers. Having total control means that Apple users are guaranteed to have the latest version of the operating system, with updates readily and immediately made available to Apple users.
Giving Meticulous Attention to Detail
The strategy employed by Apple in its product development largely depends on what the product is. If we look into the key points in the strategy used by Apple for its flagship product, the iPhone, we will find that there are four major factors involved: the competitors, a SWOT analysis of your competitors’ product, the target market, and market survey pertaining to the product.
Compared to when Apple was founded and started its operations, there are now a lot more consumer electronics companies and mobile phone manufacturers that are attempting to compete with Apple. However, out of this sea of competitors, there are only a few companies that are considered to be major threats or those that provide serious competition. These companies include Samsung, Google, Blackberry, Nokia, HTC, and Sony, to name a few. Granted, some of these companies do not really pose a serious threat to Apple, not like Samsung and Google.
Case in point: Google is seen as the biggest competitor of Apple when it comes to operating systems and software development. Google has singlehandedly brought about the boom of the Android market, and its app store, Google Play, is currently during it out with Apple’s App Store for the top spot.
2. Product SWOT
Other companies focus on conducting SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of their products. Apple does, too, but it does not stop there. It also conducts SWOT analysis of the products of its competitors.
Why is that?
Doing a product SWOT on your own products will not really give you the whole picture. It only gives you one angle: yours. By checking out the competitor’s product, you will know exactly what you are up against. What makes their product better? What makes yours the best? What are the possible opportunities and threats that the competitor’s products are faced with, and how can you take advantage of that?
This practice has certainly paid off for Apple, particularly when it was starting to release new products into the market. They were able to come out with products that are unique and innovative. For example, in the past, phones were bulky and on the heavy side. This was seen by Apple as a weakness, so it zeroed in on that and developed sleeker, thinner, and lighter mobile phone units.
3. Target Market
Usually, a business would study the market and identify the segments that it will specifically target, and that will figure greatly in its overall product development and strategy. However, Apple does things differently.
Apple is primarily product-driven in its approach, in that it develops the product first, and then seeking out the market for it. This worked thanks, in large part, to the high quality and unique products that Apple has churned out. It did not take long for Apple to become established as a global market. That meant market segmentation is no longer a priority, because Apple’s target market is now the global market.
Apple markets its products to cater to anyone and everyone who is looking for great value and high quality – all over the world. You will find Apple stores and outlets in major areas of the world, a sure sign that Apple is targeting customers globally.
4. Product Related Market Survey
As mentioned earlier, Apple adapts a product-driven attitude. When it creates products, it automatically assumes that there is a market for it; it’s just that the customers are still unaware that they need the product Apple is developing. It will now be up to Apple, once the product has finished development, to make the market realize that it wants and needs the product that it has to offer. After all, according to Steve Jobs, the customer does not know what he wants.
The updates and upgraded versions of products that Apple has been doing in recent years is the result of market surveys that it conducted, asking customers what products they liked, or what specific features they thought were excellent or outstanding.
Using the Music Business
The computing branch of Apple makes heavy use of the music industry to boost its presence and, consequently, its sales. This has been described as the Halo Effect of the Apple brand, and a good example would be with regards to iTunes.
It all started with the iPod, which started out as a simple music player. When the iPod hit the ground running, along with iTunes, Apple made sure to capitalize on the tandem’s popularity to lure other customers to make use of other Apple computing products. The features that users loved using on iPod and iTunes were craftily integrated in other Apple products, so that others who liked them would not hesitate to try other Apple products with similar offerings. The result is a customer experience that has become common across different Apple products.
Use of Product Experience in Branding
We cannot discuss Apple’s product strategy without focusing on its branding. “Apple” has become such a household name globally, and this is attributed to the company’s branding strategy, which was primarily focused on human’s emotions.
Anything that strikes a chord in one’s consciousness tends to make a lasting impression, and that’s what Apple capitalized on when it put its brand out there. Customers these days are smarter, looking at the overall experience a product gives them, instead of isolated moments and fleeting flashes. Apple made its brand synonymous with technology playing a major role in one’s lifestyle, innovation, passion, imagination, and human nature’s innate desire to have power or even a small measure of control. Their products offer that sense of control, by integrating concepts of simplicity and convenience.
Apple has successfully established a relationship with its customers that can best be described as “intimate”. Take note of the long queues or lines of prospective Apple product buyers that reach all the way down across the street, or the long lists of preorders, whenever a new Apple product is due for release. It takes a lot of dedication and commitment to be one of those people lining up, which is pretty much like being in an intimate relationship.
In the same way, the Apple brand also puts emphasis on customer experience by enhancing that sense of community among Apple users. Apple users are inclined to be drawn towards other Apple users, because they somehow get a sense of kinship just by becoming users of the same product, or of different products but belonging within the same product line of the Apple brand.
Apple was smart enough to play on the strong brand preference that customers tend to develop when they have tried and tested a specific product. Users will not mind developing an attachment or loyalty to a brand or a product as long as it provides what they are looking for, and by ensuring that this is the case, Apple is able to keep its customers, and keep them coming back.
This halo strategy is also seen in how Apple targets its markets. Apple started its computing segment, focusing largely on corporate markets. It used to have a strong presence in business environments. It wasn’t until the 1990s that it withdrew from corporate settings and focused on the individual instead. But that did not last long, as Apple started to go back to the corporate market and prove to be useful to business users. Apple is banking on the popularity of the iPhone, as well as the iPad, to become business tools. Today, what used to be a personal tablet can now be used in an office or workplace setting.
Considering how Cook is very vocal about large corporations and business companies buying and using Apple products in the near future, there is no doubt that we will be seeing more of Apple on those desks.
Getting Close to the Apple User
Apple is confident about having a very good – extraordinary, even – product that it can only introduce once. Therefore, it is important to make the introduction have such an impact. Apple is quite good at that, increasing customer anticipation before the release of a product. But what about when the product has already been launched and introduced?
This is where Apple’s product strategy becomes more personal, in that it surrounds the product with excellent service and support – before, during and after sale – as well as applications software. Part of the product strategy of Apple is to ensure that the customer experience is always highly positive. Its efforts to improve the Apple customer experience is apparent in how its distribution channels are continuously expanding. Currently, the major and key cities all over the world are not without an Apple retail store. It has even struck up partnerships with leading telecommunication companies in different countries all over the world, so that the latter would become retail outlets of Apple products. Resellers are also tapped into, both online and brick-and-mortar stores.