What? Really? How is that even possible? Isn’t more expensive indicative of a premium brand? Apparently not. Even Apple’s hundreds of millions of customers do not a premium brand make. What’s the key?
What’s In A Brand?
Bernstein Research analyst Toni Sacconaghi seems to think that Apple lacks the high customer repurchase intention of premium brands such as Saks, Louis Vuitton, and Nike. Nike?
Say what? Isn’t Apple already a premium brand up and down the line? Name a company that has a higher customer satisfaction rating for similar products?
Name a company that has customers who stand in line to buy the latest and greatest smart phone.
In fact, name a company with a competing smart phone or tablet that would be considered a so-called premium brand.
Bernstein’s research, as presented in Fortune, indicates that 95-percent of Apple’s iPhone customers in North America (and in Europe) plan to buy another iPhone. What does it take to get the premium level of high customer repurchase intention?
Part of the reasoning here is that, relatively speaking, Apple’s iPhone and iPad business have grown so rapidly that barely 50-percent of actual profits come from repeat customers. In other words, the customer base is so new that there’s not much repeat purchasing going on, hence, Apple isn’t at the premium brand level. Yet.
Android, RIM’s BlackBerry, and Microsoft Windows Phone customers trail well behind Apple’s 95-percent in the Bernstein research.
This is almost an embarrassment of riches for Apple. Not only does the company have more money in the bank that all competitors combined, more profits than all competitors combined, it has an enormously high repurchase intent level. After all, who among the Apple faithful wants to switch from iPhone to, say, an Android or Windows Phone and try to live in a new ecosystem and buy new apps?
Apple’s smart phone and tablet sales are growing so fast that they company won’t actually hit premium brand status for two or three years.