Way last year I read that stock market guru Warren Buffett was betting on Apple because the company has a “sticky product.” He didn’t say which product was sticky. It’s likely he was talking about Apple as a whole. Apple is sticky.
No, that’s not Gorilla Glue sticky (my favorite glue). Not Super Glue sticky. But sticky in the proper manner for a company that sells a number of products and services. Customers like to use Apple products more than competitors, so they stick with the brand. Simple, right?
Most of Mac360’s readers are Mac owners, many are iPhone and iPad owners, and it’s likely a good percentage of us have other Apple products, too– accessories, Apple TV, AirPods, Apple TV, et al. And it’s just as likely that a growing chunk of our readership and Apple’s customers engage in Apple TV, Apple Music, iTunes, and, well, what did I miss other than AAPL?
There seems to be something simple about what Apple does as a technology company, and it matches up with Buffett’s seemingly simple approach to investing, that keeps customers coming back for more. More products, more upgrades, more services. From last year:
Apple strikes me as having quite a sticky product, and an enormously useful product to people that use it.
In other words, when a customer buys an Apple product, they buy into an expansive ecosystem which is greater than the sum of the parts. Whether you go whole hog and own everything Apple makes, or whether you’re just an iPhone user doesn’t matter. You’re in the ecosystem of applications, App Store, Apple Store, downloads, Messages, music, and more– by default.
What’s Apple’s fastest growing business segment? iPhone? No. iPad? Uh uh. Mac? Nope. Watch? You’re getting warmer. Interestingly for a hardware company, Apple’s fastest growing business segment is Services. How big? Services would be Fortune 100 company by itself. Ahead of Facebook’s entire business. What does that say?
Is Apple a bit like Hotel California?
Welcome to the Hotel California
Such a lovely place (such a lovely place)
Such a lovely face.
Plenty of room at the Hotel California
Any time of year (any time of year) you can find it here
Well, it says Apple has a sticky business; a line of products and services carefully cultivated and cultured in such a way that customers actually enjoying using anything with an Apple logo. That’s not universal, of course, but it’s a dominant factor with Apple customers and contrasts hard and sharp when compared to Windows sufferers, Android smartphone users, and other products, even with well known brands.
Apple is sticky to the point of Gorilla Glue or Super Glue because once a customer gets into the ecosystem they are not likely to leave.
Last thing I remember, I was
Running for the door
I had to find the passage back to the place I was before
‘Relax’ said the night man,
‘We are programmed to receive.
You can check out any time you like,
But you can never leave!’
Is that a bad thing?
Every product aspect of Apple Inc is designed to provide customers with a better experience than competitors, and, for the most part, that’s exactly what Apple does. Whether it’s the experience of unwrapping a product or a visit to the Genius Bar, at every turn, Apple can be differentiated from competitors through a stickiness that exists within and between products.
Got an iPhone and use Safari, Calendar, Reminders, Notes, and other applications? Get a Mac and they become integrated. Buy an iPad and the same thing happens.
Apple is sticky. Like Hotel California.