Apple dodges brand-killing bullet by not launching cheap iPhone

Apple iPhone 5CI’ve read (primarily in the mainstream business press) a lot of criticism of Apple’s recent iPhone 5C unveiling since the big presentation last week. Most of that criticism is directed at Apple’s failure to add a device to its lineup that can compete with cheaper smart phones, deemed a particularly important strategy for competing in China and other Asian markets.

I don’t really understand the surprise. Apple has spent many years and a lot of money building their brand, one of the strongest brands in the world. A brand that offers beautifully designed, simple to use devices that deliver an incredible user experience … at a premium price. You can add to that products that last, thus providing value for dollar. I had my last iMac for eight years; granted, it was pretty slow by the end, but find me a PC that old and lets compare.

Had Apple followed the expectations of the investment community and launched a cheap iPhone, they would have destroyed their own brand. Suddenly, the conversation would shift away from “do I want pay for an iPhone or settle for something not quite as cool/beautiful that I can get a deal on?” to “which device can I get for less?” The brand would have started down the road toward commoditization.

Look what happened to Krispy Kreme in Canada when they started offering packaged doughnuts in gas stations. Their brand was built around the experience of getting a fresh, hot doughnut as opposed to one that had been sitting on the counter for hours. Or Starbucks when they expanded too quickly and started replacing baristas with machines. They killed the experience and nearly their brand – thankfully, for this brand fan, they pulled up in time.

There are hundred of other stories of brands that abandoned their core value to chase a market. Most end the same way: short-term gain that leads to the ultimate demise of a previously strong brand. Apple, wisely, dodged that future last week and held firm to their strategy. For a great explanation of what they did do in launching the iPhone 5C, have a read of this Daring Fireball blog post by John Gruber.

I think the biggest risk right now to Apple’s brand (other than our inability to re-animate Steve Jobs) is that they are publicly traded and the pressure that puts on delivering short-term results at the expense of building long-term value. I am not an expert on what it takes to succeed in places like China and India. I don’t know what Apple will need to do to build market share there, but I’m glad they were smart enough not to compromise their brand to do it (this time).

But I don’t think anyone should be surprised or disappointed by what they saw last week.

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