Apple Inc. (NASDAQ:AAPL)’s brand is arguably the strongest in the world and, more importantly, the secret behind its immense success – not innovation as many would want to believe. Once you get converted to an Apple Inc. (NASDAQ:AAPL) lover, you hardly ever go back.
Why does Apple Inc. (NASDAQ:AAPL) work with small numbers? Small numbers not only minimize alarming complaints, but they are also easy to control. Better still, small groups are willing to pay any amount to be different from the ‘rest.’ That explains why Apple, despite its relatively small global footprint in both the smartphone and PC segment, posts impressive profits. Its price points make up for what it doesn’t have in numbers. In addition, the small numbers make it easier for Apple to rank top in customer experience. After all, it’s easier to impress a small group of people with overlapping interests (exclusivity, coolness and class) than it is a crowd.
A recent Temkin Experience Ratings pegged Apple as the top brand among computer companies. Apple’s 64% rating rode on emotional scores and accessible scores, which shows how easy a brand is to work with.
Most defendable brand?
Assuming that the iOS 7 doesn’t count as a product launch, we can comfortably say that Apple has had zero product launches ever since the iPhone 5. But still, loyalists hold on. Worse still, the company has been hit by scandal after scandal and still suffers no significant customer exodus. There is in fact a high probability that the iPhone 6, when launched, will post incredible results. Just wait and see.
Looking at the things that Apple has weathered, there is no debate as to whether Apple has the most defendable brand.
Apple’s recent E-Book scandal revealed that it was ripping off its customers; at least, that’s what the U.S Judicial system affirmed. The $2 to $3 it made on each book sold over a three day period in 2010 rolled into millions of dollars. And even as Apple comes out to refute the ruling through an appeal, Apple lovers still remain loyal.
Apple simply did smart business with the eBooks. It knows that the digital marketplace is a black box for most end consumers. They just know what goes in and what comes out. Everything in between is blurred. As a company, Apple did the only rational thing and capitalized on ignorance.
At the end, you will find that the legal implications of its actions constitute only a fraction of the total haul. After all, the money in Apple’s Braeburn hedge fund, which was confirmed to be the biggest globally as of June 2012 with $117 billion under management, doesn’t fall out of the sky.
In an even more recent survey, Apple emerged as the top brand in the U.K. In fact, three other of its products popped up in the top ten: the iPhone at number 2, iTunes at number 6 and the iPad at number 8. This happened even as Apple’s U.K. tax avoidance debacle remains freshly imprinted in the minds of U.K. consumers.
If this is not an example of a defendable brand, I don’t know what is.
Higher innovation among competitors but nothing to show for it
Those who still think Apple is where it is primarily because of innovation should take a look at Sony Corporation (ADR) (NYSE:SNE)’s range of smartphones.
From a strict tech standpoint, the Sony Corporation (ADR) (NYSE:SNE) Xperia Z is on many counts better than the iPhone 5. The waterproof feature is indeed a work of innovation. But does Sony Corporation (ADR) (NYSE:SNE) have any solid sales to compliment this splendid piece of innovation? Not at all.
In an attempt to reestablish its footing, Nokia Corporation (ADR) (NYSE:NOK) has launched a 41 megapixel smartphone, the Lumia 1020. In addition to flaunting a 41 megapixel camera, which is on average five times better than other leading smartphones, it will also feature amazing zooming capabilities. It will be available at AT&T Inc. (NYSE:T) for $300, close to $100 more than key competitors.
While this phone may record good sales, it will not in any way push Nokia Corporation (ADR) (NYSE:NOK) into Apple’s league. If anything, most of the past Lumia handsets unveiled were, from a tech standpoint, greatly innovative. A good example is the Lumia 925. While it received some criticism over its limiting 16GB memory that is not expandable, it also gained a lot of attention for its speed. The folks over at Geeksquad, a UK site that exclusively focuses on tech, were thrilled with its speed and in one review said ‘The device went from being in a completely powered off state to on and ready to use in a matter of seconds.’ Despite the positive responses, the Lumia 925 has failed to stir expected sales
For those with a keen eye, you will realize that the soon to be launched Motorola X Phone is more than just a product. It shows that Google Inc (NASDAQ:GOOG) is deviating from the norm, and, like Apple, targeting a small segment of the market.
So far, the most notable thing in Google Inc (NASDAQ:GOOG) ’s Moto X Phone ads is the ‘all American’ imagery. Google Inc (NASDAQ:GOOG) hits out that unlike Apple which makes the iPhone in China, the Motorola X Phone is made in the U.S. This will win pro-U.S. consumers – especially now, at the thick of geopolitical waves where China has started being viewed as a threat to the U.S.’s economic strength. And the fact that Google Inc (NASDAQ:GOOG) will spend up to $500 million on marketing this phone, while Apple spent $333 million on marketing for the whole of 2012, suggests that this is not just a phone. It is the reinvention and building of a strong brand.
Conclusion
Although Apple’s brand strength has weathered slightly through the year, it will most likely gain strength at the launch of the iPhone 6. Amid the buzz of preorders and consumers lining up from dawn for the iPhone 6, Apple will once again take up its typical pattern of rally after rally. Apple is a good buy at its current relative low price of $427 (as of this writing). It could trend upward to $600 after it launches the iPhone 6.
The article When It’s More About Brand Than Innovation originally appeared on Fool.com and is written by Lennox Yieke.
Lennox Yieke has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. Lennox is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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