The Apple is Doomed meme is alive and well more than a few decades after Wired Magazine said we should Pray for Apple. Yes, the nattering nabobs of negativity never quit.
Yet, here we are, just over two decades removed from the Pray mantra and two things have become utterly obvious. First, Apple is the richest and most valuable company on planet earth with a billion happy customers. Second, the negativity regarding Apple’s fortunes remains the same. Here’s how Apple’s brand can save Apple from the future and the nabobs.
The core of the nabob meme on Apple’s coming doom is based upon a failed theory regarding commodities. The thought goes this way.
All smartphones are the same, so the only ones that will survive are the cheap ones because why would anybody buy a premium brand when a cheaper one does exactly the same thing.
Anybody see a problem with than analysis? If it were true would we not all be shopping at the same stores, wearing the same clothing, driving the same cars, and living in similar houses that all have the same– cheapest available– appliances and furniture? If everything becomes a commodity sooner or later will we live in a communist utopia or heaven?
Differentiation is a key component of any product– whether it is price, or service and support, or features, or quality of materials. You see it in appliances, jewelry, technology gadgets, furniture, automobiles, clothing, and everything else. Commodities are not commodities even in foods, so why would anyone think all smartphones become lowest common denominator devices?
Anyway, that’s the meme and it’s rather stupid. The next time you read that Apple is doomed because Android does the same thing, and Android smartphones are all alike at $99, ignore the writer or person because they’re uninformed castaways from the looney bin. It’s like marketshare. Apple is doomed because every competitor of note has greater marketshare. That’s the worst of the major business metrics. More important are profits, revenue, and shareholder value. Not necessarily in that order.
What can save Apple from a terrible future? The same thing that made it the richest company on earth. The brand. Apple, Inc. is an aspirational brand. Three year old iPhones sell for more than brand new Android phones because of a variety of reasons– resale value, iOS upgrades, prestige, materials differentiation and blah blah ad nauseam blah.
One of the fastest growing smartphone markets these days if the so-called refurbished market. Pre-owned smartphones. Used phones. Why? Underdeveloped markets are becoming developed markets and that means lower priced products rule. Why? People cannot afford more expensive premium brands. But they can afford used premium brands and that’s what many aspire to own. Research shows that Apple and Samsung own almost 80-percent of the revenue and profits in the refurbished smartphone segment.
Guess which of the two owns the most?
Apple. Apple is the premium brand for people who cannot afford to own one aspire to own. Refurbished iPhones are hot sellers in emerging markets.
So, how is it again that commodity smartphones will kill Apple from here to Doomsville?