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Ries: Iphone: A Promising Convergent Brand?
Posted By: Doug Hudiburg on 3/19/2007 11:44 PM (CST) 500 Points
If one takes the lessons of this book to heart, one would have to conclude that Apple is on shaky ground with the iPhone.

Even being a late entrant to the market, Apple hammer-dunked the portable MP3 market with a less-is-more approach in the iPod.

Can they create a unique and enduring position with a CellPhone-MusicPlayer-DigitalCamera-EmailAppliance called iPhone?

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Moderator Note: This discussion refers to the book The Origin of Brands by Al and Laura Ries (topic: branding). Click the title to learn more. Then join the conversation. We'd LOVE for you to participate!

Posted by: mbrewer* Accepted Answer
3/20/2007 8:30 AM (CST)
I think it really depends on the quality of each one of the individual pieces. If it turns out to be marginal in any one of those areas mentioned above then it will have marginal sales.

 
Posted by: designerdawnnie Accepted Answer
3/20/2007 8:53 AM (CST)
I don't think it will be the success Apple is hoping for. The marketspace is just so overcrowded with the same convergent products. They are far from first on the market.

Unless they are able to find some pop icon, along the likes of what Snoop Dog did for the Sidekick, they will have a long, difficult road ahead of them.

Apple is known for people-friendly personal computing. Alot of the kids I work in graphic design swear by them. I used Macs before Windows came into prominence.

They gambled and won with the iPod because the product directly tied into people friendly-computer use.
Better for them to continue to introduce new and improved iPods, which from what I've read still has its share of problems.



 
Posted by: KathySmithFilms* Accepted Answer
3/20/2007 9:14 AM (CST)
The thing I do respect about Apple is the have such a following of consumers that already have them in mind. They have the entrepeneurs in mind and all the free hand's on tools in the store along with expert help on the spot. Being hooked on my Mac I already called to get one in June or when it arrives. It's not that its the iPhone but the service is personalized. The objective of the book is to help you build one of those valuable brands. I feel Mac is there to help me on my next film. I hope the other cell phones make these new designer phones and I take my chances it works more than just a toy. They did take a long runway to arrive and if their PR is done well, their fans will follow.
Kathy
 
Posted by: marketingfirst* Accepted Answer
3/20/2007 9:36 AM (CST)
Apple did hit the nail on the head when they introduced the iPod -- its simplicity is its best feature... and folks responded like crazy to this and the quality of the sound. The convergence of camera, music, telephone, etc... makes a complicated instrument which may be priced right out of the range of the iPod target market. And.. quality may be sacrificed in the bargain. While the concept is intriguing for those who love technology, it just doesn't make sense. I think a product of this type will enjoy a fringe market at best.
 
Posted by: quixxxie2000* Accepted Answer
3/20/2007 9:54 AM (CST)
From the perspective of a user who doesn't go anywhere without my i-pod, but I do forget to take my phone with me when leaving the house sometimes.. so:
I-Pod and me insepearble.
Phone and me seperable
Camera and me - dont quite care..
If I had all these features in one. and if the quality of the phone/camera was just about OK, then I-phone is my choice, I have it all in one pocket of my coat.
If I'm particular about quality on the other dimensions, and Apple does not meet them, then there will be some problems..
Todays customers and mostly Kids are highly concious about quality.. so if thats messed up! God help Apple!
 
Posted by: Doug Hudiburg Author Response
3/20/2007 10:18 AM (CST)
These comments make me wonder about the same question that Mack Collier raised (http://www.marketingprofs.com/ea/qst_question.asp?qstID=17352)

Is convenience the main benefit of convergence products? It seems so.

Everyone almost immediately assumes that quality may be sacrificed in the iPhone. It makes sense to think this way. Perhapse all convergence brands will have to overcome the issue of "did you make a compromise?" in order to be perceived as having the same quality as divergent brands.
 
Posted by: Laura Ries (Author) Accepted Answer
3/20/2007 10:28 AM (CST)
Marketing first you have hit the nail on the head my friend.

iPod's brilliance was that is was a divergence device. It was the first hard-drive music player in the mind, it was simple and pure. The iPhone is the opposite of that in being a convergence device. Plus it is way late in the category, complicated and very costly.

While it might attract a few Apple diehards or techies, we feel it is not going to be a mainstream success anywhere near the iPod.

Look Smartphones themselves are only 8 percent of the market despite the hype most people prefer just a phone. Or just an Email device.

I myself have a Razr and a BlackBerry. Both excel at what they do best. A small phone to take everywhere and a larger full-keyboard device for doing email that is portable.
 
Posted by: Doug Hudiburg Author Response
3/20/2007 10:40 AM (CST)
Laura,

Thanks for chiming in. I had been thinking of the iPod as a late entrant into an existing category. But if you define the category as "hard drive music player" it makes a lot more sense.

Also, I've noticed many people doing what you do with the blackberry and a separate cell phone. I refuse to carry two phones with me, so I use my Blackberry exclusively, but I do miss having a small phone.
 
Posted by: Laura Ries (Author) Accepted Answer
3/20/2007 10:41 AM (CST)
Convenience is the main benefit of any convergence product. A benefit that you need to sacrifice many things for.

Need some milk? Well you can get it at the gas station Convenience store (AKA Convergence store) but the price will not be lower, the selection will not be great, and it might not be as fresh as shopping at Whole Foods or Kroger.

In some cases the convenience is worth the sacrifice, in many cases it is not. Most of the time consumers prefer the divergence product, but sometimes they will make due because of the convenience with an all-in-one. Most milk is sold in supermarkets not gas stations.

That is why you will have some successful convergence products but they will usually only represent a small segment of the market, say 5 to 10 percent.

It is like a shampoo-conditioner. It is more convenient to use one product that does both. But no one believes it is a better than an individual shampoo and a individual conditioner. And most people buy the individual products.

We travel a lot and you can tell how many stars your hotel has by whether or not they give you individual shampoo and conditioners or they give you the convergence all-in-one. I don't have to tell you that the Ritz Carlton and Weston don't do convergence. And Holiday Inn always has the all-in-one.
 
Posted by: Mark Goren Accepted Answer
3/20/2007 10:51 AM (CST)
This is the one question I was thinking about the whole time I read the book. What I like about the idea of the iPhone is that the convergent items play up to Apple's strengths – music, email, organization (plus its design, by all accounts, is beautiful). The unknown, of course, is that it's a phone and Apple has no experience there.

Not a small factor.
 
Posted by: Stephen Denny Accepted Answer
3/20/2007 10:59 AM (CST)
I disagree with the iPod analogy above -- iPod was successful because of its pairing with iTunes, which was a revolutionary delivery mechanism of music. We all carried our music around for years (1980, actually), when the Walkman arrived.

iPod itself is a probably a marginally better personal audio player in a field of very nice audio players. Go pick up a Sansa or a Zen -- both nice, but they're not iPod (because iTunes is the interface).

iPhone is a highly convergent device -- now I can talk, watch movies, listen to music, etc., all in one device. I don't think this is going to be terribly successful for many reasons (price point too high for consumer market, functionality too light for business use).

iPod/iTunes worked because it scratched the biggest itch in the music business -- I don't want to buy the album, I just want to buy the songs. iPhone is an expensive but beautiful phone/Mac/iPod in my pocket. Not as compelling.
 
Posted by: Valeria Maltoni Accepted Answer
3/20/2007 11:06 AM (CST)
Could Apple be successful with the iPhone *because* they already have share of mind?

I started a conversation on share of mind = share of wallet here http://www.marketingprofs.com/ea/qst_question.asp?qstID=17360 because I was thinking about the argument convergence vs. divergence from a different angle. Join me and challenge my thinking.
 
Posted by: Doug Hudiburg Author Response
3/20/2007 11:40 AM (CST)
Mark:

I think you have really nailed their achilles heel. The phone component is the place where they could fail, and fail big time. I really doubt if they understand the subtleties and idiocyncracies of the wireless phone market.

Stephen:

That's a great insight. I tend to overlook the importance of the computer-to-device interface + the delivery model for music (Duh :-) But, doesn't the mega-storage + simple + cool of the device also play a big role. It really seems to be the perfect storm of market value. The iPhone doesn't have a fraction of that.

Valeria:

I think all the mind-share part does for Apple is to make sure they don't lose a ton of money. They will sell a lot in the beginning, but it may tail off quickly.
 
Posted by: Jackie K Accepted Answer
3/20/2007 3:29 PM (CST)
Well we know that Apple can do the MP3 player part right. And I bet they will do the camera part well too. If they can get the phone and PDA up to par, I think they will have a winning product. The loyalty that mac users have could make it huge. Right now, I have a cell phone, pocket PC and video ipod in my purse. Many other days, I also have my digital camera and even my video camera also in my purse. To make 4 of those into one streamline piece of technology will be awesome. Macusers out there know how streamlined mac software is (i.e. iLife programs- itunes, iweb, iphoto, imovie). Apple knows how to make their programs work together, making it almost effortless for the user, and hopefully they can do it with their phone too. I will be waiting!
 
Posted by: Mario V Accepted Answer
3/20/2007 3:47 PM (CST)
The iPhone will be cool not just for its convergence, but also for its touch screen and the whole wow! effect in user interface design. That is a huge part of its strategy, and one that they're banking on as part of its lifestyle line of products.
This is Apple...technology designed for pleasurable living.

When they position the iPhone as not just a convergence product but an upgrade to a higher form of happy living with comfort and joy.....they will win. It'll be a pseudo-luxury brand with marginal sales and a small market share. Destined to be so.

That said, I find fault with trying to be many different things all in one. I have a 5th gen ipod, and have never used the photo or video features. If Apple offered a version stripped of these features for a lower price...I would have bought it.
 
Posted by: Muskie* Accepted Answer
3/20/2007 4:22 PM (CST)
I also thought of the iPhone while reading about the smart phone being a flawed idea. In Asia, even Europe people use their cellphones more progressively, in Japan a person's 'keitai' mailing address is much more used than their email address or their MSN or other instant messaging client. Korea and Japan are a bit different, but I see the trend towards mobility/portability being very strong. Possibly strong enough to defeat divergence.

Certain features of a traditional PC such as spreadsheets or graphics editing have no real place on a personal smart phone, but the fun aspects of a computer: mail, photos, games, text messaging especially among the younger generations, if not Generation X then Generation Y or the Millennials are here to stay.

Although many equity analysts and technophiles are pro-iPhone Guy Kawasaki has some reservations:
http://blog.guykawasaki.com/2007/03/great_expectati.html

Though it should be noted, his son wants one badly. He isn't even in Generation Y or the Millennials, I'm not sure of his exact age, but considering my own ten year old cousins desire for an iPod I think younger and younger people if not being marketed to, at least have aspirations to own gadget status symbols.

An iPhone is considerably cheaper and more attainable than a fancy sports car.
 
Posted by: designerdawnnie Accepted Answer
3/20/2007 4:38 PM (CST)
I wonder what made Apple switch gears. Years ago they were really focused: they and they alone were the only people on the planet that could manufacture Macintosh computers. Oh, lest I forget, their disasterous attempt to clone Macs, which nearly lead to their demise.

Now after resurrecting Apple, Steve Jobs is attempting to be all things to all people. First he wanted to let the music play with the iPod. Great, it was a runaway success. But his attempt to enter the overly crowded cellphone-and-everything-you-ever-wanted-in-a-handheld-device arena is just plain scary.

He has millions of devoted Mac users. Concentrate the brain cells of the engineers at Apple on building a better computer--period! If they build it, they will come!!!

Take a page from Sony. Their attempt to become computer moguls hasn't been nearly as successful as the Apple's. I fear the same thing for Apple in the cellphone arena.

Sorry Steve, you've violated one of Al Ries' laws of marketing: the law of sacrifice. Shame!
 
Posted by: Doug Hudiburg Author Response
3/20/2007 5:14 PM (CST)
I think one of the other challenges iPhone faces is that it is never going to be perceived as a business appliance on any large scale, yet it has all of the tools a business might need. I just can't see any corporate IT manager recommending that they trade in their fleet of Blackberries for a fleet of iPhones. (Is it even compatible with Windows machines?)

So the devices it might replace (Treo and Blackberry) are perfectly safe.

I can tell you, though, it would be hugely powerful to have a sales force armed with iPhones. You could push promotional videos directly to them wirelessly and have your new video product pitch being shown to customers within hours.
 
Posted by: Mario V Accepted Answer
3/20/2007 5:23 PM (CST)
I like the last idea Doug. But I think you could accomplish the same effect by pushing the video through Adobe Presenter (formerly Macromedia Breeze presentation) on a laptop with wireless internet. Plus you get a much bigger screen, and you can forward the link to the buyer and they can forward on, etc.
 
Posted by: Laura Ries (Author) Member Response
3/21/2007 10:31 AM (CST)
Love your thinking designerdawnnie. Being all things to everybody never works. You have to always sacrifice something. What has happened to Sony is a tragedy. And the same thing could happen to Apple.
 


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