Assessing the Intangibles of Apple’s Success

When analyzing any company’s success, there seems to be a growing gap between the traditional measures of success and the expanding list of “intangibles” that are directly responsible for that success here in the second decade of the 21st century.  Things have evolved considerably.

By tangibles I mean things like market share, unit sales, stock price, customer satisfaction, market cap, etc.  We gather these numbers from all the competitors and use it as a means of comparing their relative performance.

By intangibles I mean all the other things that are involved with success that cannot be quantified, and thus we can’t use them as a basis for comparison.  For instance, we can’t say that Apple’s “Advertising Effectiveness Quotient” is 12.5 % higher than it’s nearest competitor.

I can think of a couple-dozen intangibles that are directly responsible for Apple’s success.  Most of these you’ve heard of, and some you haven’t.  Let’s take a look at a few of the interesting ones and see if we can draw some conclusions as to what we might be overlooking.

Of course, discussing these fuzzy interacting variables which are difficult to characterize and categorize is not going to be easy, but it won’t stop us from trying.


The iOS Platform’s High “Capability Ceiling”

Consider a list of things we can currently do with our iPad and iPhone.  Some have moved down from our desktops and laptops, most are new to our mobile devices, and the majority are provided by third parties.  I had originally created a large one-page table, but I condensed it into the following paragraph which seems to make the point equally well.

We use apps while we’re calling, photographing, messaging, emailing, socializing, reading, writing, watching, listening, eating, learning, buying, selling, searching, traveling, shopping, navigating, tracking, calculating, exercising, playing games, checking in, translating, controlling things, syncing and updating, using computers remotely, and to a limited extent designing and creating. We also follow the weather, stocks, sports and people.  And we manage our money, time, tasks, contacts and private information.  There’s more, of course.

Out of curiosity I made a list of the apps I use on my iPhone and iPad in a week’s time, which included things I might do on the weekend like geocache, figure out what planet that is, or set a timer to remind me to add fabric softener to the washer.  I used 50 different apps in a typical week (listed at the very end of this article if you care).  How many apps would be on your list?

I didn’t include games I play.  That category is a little different because there’s a lot of “churn” as we get tired of some games and move on to new ones.

While I might be considered a power user, the fact that someone can use so many apps without thinking much about it is very interesting.  The iOS platform can be said to have a high capability ceiling.


Simplicity and Consistency

Turning our attention from the ceiling to the “floor” we have iOS’ dead-simple interface that infants and granddads have no problem figuring out within minutes.

Simplicity is critically important because it allows us to do more with the fixed amount of effort we have available. I think we can all say we’re living at the edge of our time and energy budget.  When things are extra simple and more consistent, the result is that it’s not difficult to use 50 different apps in a week’s time.


Depth of Experience

When the interface gets out of our way, we connect more deeply with what we’re doing on our devices.  This subsequently affects how people feel about their gadgets.  Their sense of accomplishment is heightened, they feel closer to their friends, they may laugh more, they may feel more creative, inspired, fascinated, etc.

You know your platform’s design is good when someone says “I absolutely LOVE my iPad!” and you get the feeling that if anyone were to try to take it away from them they might have to pry it from their cold dead hands.  However, you may have some work to do if someone says “It’s okay, I guess.”

Still, there are many people who will absolutely love whatever device they’re using no matter who makes it, even if they only use three apps on it.  But there will be measurably more excited fans of a platform that gets this intangible right and their life feels enhanced by it.

This depth of experience may likely be responsible for why people queue up for hours in mall-wrapping lines to buy Apple’s latest gadget.  People may not know why they love something, but it seems that Apple does.


Blended Functionality

Apple’s recent commercial “Now” talks about how you can now watch a newspaper, listen to a magazine, curl up with a movie, and touch the stars.  Functions are being combined, sometimes in innovative new ways, or simply new to you.

This includes augmented reality.  Great examples of this include Yelp, which allows you to aim your phone at a number of restaurants on a street and their individual stats and ratings will be overlaid upon them as you move the camera.  Another example is Star Walk which allows you to see constellation imagery and the names of stars and planets as you move the iPhone or iPad around.

Note that this isn’t the same thing as “synergy” found in Windows Phone 7 and WebOS. Synergy combines multiple sources of the same thing into one interface, such as all your various chats.


A Platform’s “Dynamic Range”

I think we now need a new term to describe something that’s a composite of what we’ve talked about so far.  Let’s borrow one from the audio industry — dynamic range.  Here’s a simple way to understand what it is…

Go into your clothes closet and shut the door so you’re in a super quiet place.  Now clap your hands together as loud as you can.  The difference between the silence and the extreme loudness of the sharp clap is huge.  An audio amplifier’s ability to reproduce this great range of volume accurately is referred to as its “dynamic range” and is directly responsible for clarity and realism. The sound from a tinny pocket radio is an example of a very low dynamic range.

Power and leverage are what’s behind this.  Think 0 to 60 in 3.5 seconds or catapulting a fighter jet from a carrier. On our device it means being able to move around effortlessly, and make big things happen with a single tap.

If we were to then plot dynamic range on a 3D graph, the vertical axis might represent the range from dead-simple up to the high capability ceiling.  On the horizontal axis we could go from simple traditional activities to new blended and innovative experiences.  And on the Z axis we might plot the depth of our experience as a result of the interface getting out of our way.

The idea here is that this multi-dimensional dynamic range is very high on the iOS platform, and it’s a remarkable achievement.

Apple is even lowering the floor of the Mac’s experience with the release of Lion, which includes a Mac App Store, a launchpad, full screen apps, and is working to eliminate the concepts of saving and quitting.  Again, the more the interface gets out of our way, the greater the dynamic range of the whole experience.

So, a high dynamic range allows people to do more with the same effort, easily buy more apps and content, have more fun, be more creative, have a deeper more satisfying experience, easily move between a family of devices, and become an excited and loyal customer.  We could say that the dynamic range Mac OS is large, and on iOS it just pops!


The Emotional Factor

We’re psychological and emotional creatures, not machines.  Apple knows this, and emotion is an extremely important intangible.  Apple’s ads always include emotion and delight without fail.  The FaceTime ads certainly give us a lump in our throats.

Apple’s competitors have a harder time talking about the current capabilities of their platforms and instead tout specifications no one really cares about.  Few customers wanting an iPhone or iPad think about a device’s specs.  They’re standing in line for the next gadget because they’re responding to what the device already does, and how it makes them feel to own and use it.

And the emotional factor usually comes up missing in competitor’s ads as well.  In this Verizon ad for Android Honeycomb tablets, the shopper is being told that his “wife is going to love the dual-core Tegra 2 chipset, and it’s 4G/LTE upgradeable.”  The ad tries to embue an excitement about something abstract.  But it seems more like a diversionary tactic.  Do I really love chipsets, or do I love talking to my daughter who’s away at college using FaceTime?


Curated App Store and the Ecosystem

Apple’s App Store is a raging success.  Apple seems to have balanced the tradeoffs to fuel a vibrant and unprecedented “app economy” that has pushed its capability ceiling quite high.  Half a million apps is an absurdly high number.  And by Apple curating the apps, customers have an increased confidence in buying more apps effortlessly without worry of them causing problems on their device.  Customers have now purchased more apps than music in iTunes, over 18 billion.

With iCloud, Apple is refining it’s infrastructure to make living within its ecosystem easier and simpler still.


Branding

We all understand how recognizable and powerful the Apple brand has become.  But there are facets of branding that have many additional intangibles associated with it.

In Patrick Hanlon’s book “Primal Branding” he talks about the seven components of the “primal code” that work to instill an optimal emotional attachment to a brand. For instance, one of the seven components is the “Creation Story” that people might know about a brand, such as how the two Steves started Apple in a garage, did battle with Microsoft, almost lost it all, and just look at Apple now.  Check out this short video which explains the primal code



Going Directly To The Customer

There’s a lot going on here.  By going directly to the customer Apple has great control over the customer’s experience and perception of Apple.  Apple Stores bypass the interference of operators and any bungling of the customer experience at retail outlets.

For the iPhone alone, Apple says there are 115,000 points of sale worldwide, but there are only 300+ Apple Stores.  Even so, the relatively few Apple Stores serve an important role in setting the standard for the customer’s experience with the brand.  They also communicate many intangibles.  To just pick one, by design, the general public is made to wonder why Apple Stores are always packed and seem to be thriving.

Going directly to the customer includes advertising and Apple has done some remarkable things.  For years the “Say you want to…” series of ads have literally taught millions upon millions of people how to use an iPhone or iPad even though they don’t have one, with the side effect that it sets the bar for the experience people would come to expect from any smartphone or tablet when they go shopping.  That’s brilliant.  In addition, in Apple’s “We Believe” ads (as well as many others) Apple is sure to “start with the why” as illuminated by Simon Sinek in his book and this short TED Talk video.


Control

I like to quip that people writing in the tech space (bloggers and commenters alike) confuse the terms closedcontrolled and curated because they all begin with the letter “C.”

There’s no denying that all of these intangibles we’ve discussed are optimized in Apple’s favor because Apple exercises as much control as possible.  Control is the right word to use.

It’s clear that when people start referring to Apple as being “closed” or a “walled garden,” these less accurate terms are being used as “blanket disqualifiers” because there’s something about it that they don’t like or find threatening.  In the end, this is Apple’s game, which it tries to control and manage every way it can.

It’s important for app developers to understand that Apple does not exist to make them happy. So many wrongly think they’re entitled to something. Rather they’re being allowed to come along for the ride, to where Apple wants to go, and on Apple’s terms.  Apple is flexible and will rebalance things when needed to optimize everyone’s outcomes, but Apple is still in the driver’s seat.  If you’re going to tag along, you have to take what comes with the territory.

It’s also a better strategy to exert control more heavily up front and relax things as time goes by, rather than trying to put the genie back in the bottle, as Google is now learning with Android’s “free for all” app store and the great variety of handset designs and custom modifications.  We’ve also watched as Apple has relaxed it’s restrictions with magazine and newspaper publishers.  I believe the opposite of open is not closed, but controlled.


Many More Intangibles

There are many other intangibles such as secrecy, timing, the willingness to cut short the life of one product to push another forward, product cannibalism, the halo effect, the deterrence effect of cash-on-hand, preemption by sucking up most of the industry’s component parts, saying no to great ideas, the passion to build great products, disruption, mobile carrier influences, core values, patent portfolios, worldwide cultural differences, industrial design, first impressions, peer influences, attention to detail, Steve Jobs, total silence, trust, changing the game or changing the conversation, releasing products that work on day one, and many more.


The Bottom Line

While the traditional tangible measures describe a company’s bottom line, the great number of intangibles we’ve been referring to speak to the reasons why.   A successful company acknowledges them and optimizes them for maximum benefit.

And when it comes to the tangibles, there are few observers who master them as well as Horace Dediu at asymco.com.  He’s able to take the complex and inconsistent data from different manufacturers and find new ways of analyzing and visualizing it.

Horace has also helped us understand that we can’t cite single market share numbers anymore, unless we’re intentionally focusing on one in particular, or intentionally being deceptive.  In fact, for the iPhone alone there are now nine market shares which describe it’s position in the marketplace.


Looking Forward

After reading this you may start to notice more just how coarsely pixellated the tech press’ world view has become.  And as everything becomes more involved, oversimplification becomes more widespread and problematic.  Comment sections often paint a clearer picture than an overly brief article or blog post.

Improving our understanding of the complexity of both the tangibles and intangibles, and finding better ways to easily discuss and visualize them is becoming increasingly important. This is necessary if we’re going to keep up with progress, and escape the gravitational pull of endless arguments triggered by oversimplifications.  For instance, how many different articles did we have to read to get a grip on the Google/Motorola deal, or the end of WebOS?

Yeah, it’s complicated.

[Update 2 Oct 2011] And now with the Amazon Fire, we see a product whose introduction feels so Apple-like.  This product is easy to understand, and the customers have great confidence in Amazon.  Amazon gets so many of the intangibles right, but it’s still a subset of Apple’s. We’ll have to wait and see about it’s attention to detail.


* The 50 apps I use in a typical week include OmniFocus, NetNewsWire, PomodoroPro, Kindle, TED, 1Password, Instapaper, AccuFuel, eBay, iTeleport, DisplayPad, WordPress, Tumblr, Woopra, DropBox, BofA, PayPal, eBay, Square, PocketTunes, Shazam, HeartsOfSpace, Facebook, Twitter, NewYorker, NetFlix, StarWalk, Amazon.com, Yelp, Starbucks, MyCast, AirBand (with DAR.fm) besides the usual Camera, Photos, Notes, Contacts, Calendar, iPod, iTunes, YouTube, App Store, Phone, Mail, Safari, Messages, Calculator, iBooks (PDFs), Clock, Maps and Pages.  I use about 20 other apps occasionally and play about 4 different games at a time.  I don’t think I’m that much of a power user come to think of it.

About these ads

19 thoughts on “Assessing the Intangibles of Apple’s Success

  1. Mark, I like your ideas but your style undermines your value. Right at the start you say:
    ‘Note: This is a long piece without hardly any pictures’
    Taking you at your word then, I had the right to expect quite a few pictures.
    How about ‘…with hardly any pictures’?
    Or ‘ …with very few pictures’?

    • You’re absolutely right. Thanks for that. I just took out that whole preface I recently added. It was unnecessary. People are either going to read the whole or they aren’t. :-) While I’m not new to writing, I am new to blogging, and still learning.

  2. To quote you:
    ‘Of course, discussing these fuzzy interacting variables which are difficult to characterize and categorize is not going to be easy, but it won’t stop us from trying.’

    If this kind of thing is really of interest to you, you might find the Stella app and its related products useful and thought-provoking.

    • Thanks for the referral to Stella. I love comments like that. It was an offhand remark once that led me to Yojimbo, which I now can’t live without when I want to keep references to the trillion things I stumble upon and might want to find again.

  3. Some very interesting stuff here. Most of it I agreed with, some of it I didn’t.

    One thought though: All of the positive things you listed (things like simplicity and control) also come with their own baggage. It’s always a trade-off.

    For example: control sometimes DOES lead to things that are bad for the customer. Case in point is when Apple removed the Google Voice apps from the App Store.

    Another example: whenever you focus on simplicity, you always sacrifice the benefits of added complexity. It’s the difference between having a clean garage with a few tools or having a garage that’s a little messy but filled with everything you could ever need to get the job done. The latter example is the Android system. And, as I’m generally a Google fan anyway, I believe that they will continue to package all of those tools in a more simple and usable way.

    For specifics on this last point, I would focus your attention on things like HDMI ports, widgets, expandable memory through SD cards, and on-phone file management.

    Loved the post. It really made me think about the differences between Android and iOS. Overall, I think that’s what they are right now: differences. I don’t think one wins and one loses. They’re different interfaces that do different things and so different kinds of people prefer one or the other… and that’s probably a good place to be.

    • You’re absolutely right about trade-offs. The term “trade-off” is something that doesn’t get used enough in order to counteract the either/or mindset people can get stuck on.

      One thing that would really be wonderful is if we were actually able to “test-drive” the different types of phones (iOS/Android/Windows Phone, etc) for a month or so and then make up our minds, but we’re locked into this 2-year granularity, and that’s a millennium in computer years. I would love to spend time with Windows Phone 7, for instance, just to really understand it.

      I guess we could say that, first and foremost, Apple sees a vast untapped market of people who are NOT tinkerers, and things have to be dead simple for them, with their choices limited for them so that tinker-creep does not invade the intended simplicity. This is the market that Apple is addressing, and they are optimizing the trade-offs for that marketplace.

      And Siri, which is not addressed in my article, just applied another level of simplicity on top of the feature-creep of the modern smartphone, with the attendant trade-offs, but fortunately does not shackle what’s underneath. That will be interesting to watch too.

      Perhaps “simplicity” is the ultimate trade-off that’s being optimized for here — do more with the same effort — the ability to use 50 apps without thinking about it (even though some apps may have limitations.)

      And now I don’t have to care about file management when there’s iCloud. I don’t have to care about SD cards when there is PhotoStream. I don’t have to care about HDMI cables when there is AirPlay. We had to wait for all these alternatives, and perhaps we’re still waiting for widgets to appear in a later release of iOS. This was no-doubt in Apple’s internal game plan years ago, and they decided to never include things they ultimately won’t need down the road (and didn’t want to include connectors and memory slots and then take them away later).

      Thanks for your comments. Love it. And thanks to you I see now that “trade-off” is the preferred spelling! :-)

  4. Hi, I think your site might be having browser compatibility issues.

    When I look at your blog site in Opera, it looks fine but when opening in Internet Explorer, it has some overlapping.
    I just wanted to give you a quick heads up! Other then that, excellent
    blog!

  5. Whats up are using WordPress for your site platform?
    I’m new to the blog world but I’m trying to get started and set up my own.
    Do you need any coding expertise to make your own blog?
    Any help would be greatly appreciated!

  6. you’re in reality a excellent webmaster. The site loading speed is incredible.
    It kind of feels that you are doing any distinctive trick.
    Moreover, The contents are masterwork. you have performed a great activity on this matter!

  7. I am really loving the theme/design of your blog.
    Do you ever run into any web browser compatibility issues?
    A number of my blog visitors have complained about my site not
    operating correctly in Explorer but looks great in Opera. Do you have any suggestions to help fix this problem?

  8. We absolutely love your blog and find most of your post’s to be exactly what
    I’m looking for. Do you offer guest writers to write content for you?
    I wouldn’t mind publishing a post or elaborating on a number of
    the subjects you write about here. Again, awesome site!

  9. Please let me know if you’re looking for a writer for your blog.
    You have some really good posts and I feel I would be a good asset.
    If you ever want to take some of the load off, I’d really like to write some content for your blog in exchange for a link
    back to mine. Please shoot me an e-mail if interested. Kudos!

  10. Despite what exactly a lot of may possibly feel, world of tanks hack
    tool 2014 is well known over countless nations around the world all over the world.
    Incredibly agile, very fast, but even less armor than the BT-7.

    There’s been no official launch date announced for World of Tanks on the
    Xbox 360.

  11. Hey there! I just wanted to ask if you ever have any trouble with hackers?
    My last blog (wordpress) was hacked and I ended up losing a
    few months of hard work due to no backup. Do you have any solutions to protect against hackers?

Please leave a comment...

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s