Coolness not guaranteed
Even a technology trendsetter like Apple Inc. (NASDAQ:AAPL) doesn’t always hit home runs. Steve Jobs introduced the Motorola ROKR in 2005 as the “iTunes Phone,” but the device failed to meet high expectations, especially compared to its famous successor.
And iTunes Ping, Apple Inc. (NASDAQ:AAPL)’s failed social network attempt, was shuttered after two years of middling membership and poor reviews.
Although not crippling failures, the ROKR and Ping show that Apple is far from infallible, even under Steve Jobs. Both devices revealed a fundamental misunderstanding of the market.
In the case of the ROKR, Apple bet that consumers would rather carry around 100 songs on one device than 1,000 songs on two — in the same event that the ROKR first appeared, Jobs introduced the first iPod Nano. Oops.
And with Ping, Apple Inc. (NASDAQ:AAPL) attempted to enter the social media game embarrassingly late. When Ping was introduced in September of 2010, Facebook Inc (NASDAQ:FB)‘s members topped 500 million. And although that company’s user base (now 1.1 billion) does not translate directly into revenue, it does make advertising a valuable prospect. Facebook Inc (NASDAQ:FB)’s stock has traveled a rocky road thus far, and although the company’s long-term prospects are certainly in question, its strong leadership and commitment to revenue innovation make it a strong short and medium-term buy.
Apple Inc. (NASDAQ:AAPL) had hoped to get in on those sweet advertising dollars, but without a killer feature, there was nothing to draw iTunes 160 million built-in users to its social network.
Consumers may have overlooked ROKR’s shortcomings if they’d seen it as a must-have status device. And Ping might have succeeded if it had debuted two years before, backed up by a stronger marketing campaign.
But there’s hope
If you think Apple is over the hill on hipness, you would do well to remember the product with one of the least hip names of the past decade: the iPad.
A pre-2010 pad, you might recall, is a “flattened mass of anything soft, to sit or lie on.” It is a word beatniks used to refer to their messy apartments.
But once you throw a lowercase “I” in front, it is a device that devoured 95% of tablet computer sales within six months of its debut in 2010. Apple has sold over 100 million iPads, and although Google’s Android has seen rapid growth since 2010, the iPad still dominates the tablet market. A recent study showed that the iPad was responsible for over 80% of tablet web traffic.
Remember, tablet computers existed before the iPad; no one bought them.
The iPad showed consumers what a tablet could be. It was attractive, luxurious, and fun. With the iPad, Apple Inc. (NASDAQ:AAPL) did what it does best — it made people want something they didn’t know they wanted.
