What’s On

Apple faces brand pressure

Apple, the consumer electronics pioneer, has reported a year-on-year drop in net income for the first time in a decade, leading some branding experts to question its marketing strategy. Ken Segall, a former creative director at TBWA/Chiat/Day who worked on Apple campaigns, told Marketing Week that “Samsung is openly running circles around Apple in marketing”, and added that the US brand needed to “shake things up” creatively.

His comments were echoed by Ije Nwokorie, managing director at brand consultancy Wolff Olins, who remarked that Apple’s launch events all followed the same formula, with the CEO on stage and a big screen. “They created that but that’s the bit they need to reinvent too,” he said. “Less of the ageing rockers on stage telling us about cool stuff, it has to be a more human conversation, not just saying ‘look how clever we are’.”

One of Apple’s marketing challenges is that it has relied on pioneering new categories. “Apple has to squeeze value out of a model of branding that is starting to run out of steam because a change would mean fundamentally rethinking what Apple does and it could jar,” Nwokorie noted.

Segall was also critical of its lack of innovation, and accused the company of “shooting itself in the foot” when launching products like the iPhone 5s.”They’re broadcasting ‘this isn’t a real update’,” he said. “I don’t think any other company tells their customers ‘this will be an off-year upgrade’.”

This issue was touched upon by Apple’s chief executive Tim Cook in the course of its first-half earnings call. “We’ve got some really great stuff coming in the fall and across all of 2014,” he said. “This is the same culture and company that brought the world the iPhone and the iPad and we have a lot more surprises in the works,” he added.

Cook also argued there were other measures than market share and unit volumes which the company valued, including customer loyalty, and repurchase rates, which stand at 95%, according to Kantar, the research firm. The commerce ecosystem is also important for Apple, and it takes some 74% of all money spent on apps.

Published with permission from WARC