Perceived Value vs. Actual Value : Apple

Apple

By now we’ve all caught up to the big announcements that were made at Apple’s Worldwide Developers Conference, which took place earlier this summer (June 2-6). It’s timely that I should mention the conference because one of those announcements is going to be made available to us this week. Yosemite, the new version of the Apple operating system comes out September 9th. As excited as I am for the new features and innovations, does it feel like there isn’t as much mass collective hysteria over Apple lately?

Sure there are people camping out in New York City, at Apple’s flagship retail store on 5th Avenue, waiting with batted breaths and full bladders for the iPhone 6 (Love, 2014). Still, it seems like Apple has lost its edge despite not having lost its huge lead as giant of the tech industry.

Apple’s stock closed at $98.12 a share Thursday September 4th (Krantz, 2014). That is quite low for a brand that usually is valued at above $500 a share. At its best, Apple sold for $705 in late 2012 (Rich, 2013). The recent celebrity hacking scandal put Apple’s iCloud security into question and this hurt the Apple stock in the worst way by putting Apple’s trustability on a string (Eitel, 2014).

According to Reuters,

Cybersecurity experts say the perpetrators possibly gleaned the celebrities’ email addresses and mounted a long-term phishing attempt – a relatively straightforward attack through which hackers gain access to users’ accounts by getting them to click on a compromised URL or Internet link. (Chan, 2014).

Apple’s investigations revealed that their system was not breached, which supports the theory that the perpetrators had the usernames, passwords, and security question answers collected in order to access the celebrity accounts (Apple Media Advisory, 2014). Still it will take time for Apple to build trust in their brand again.

Apple has weathered bull markets before and comes back to surprise investors. Usually it’s around the time of new releases, like products such as the iPad.

When Apple unveils a new creation or a new version of a favorite product, program, or operating system, those are the times that prove how valuable a brand Apple is to the developed world.

Apple comes up with products that are innovative, attractive, and easy to use. Apple is different from any other tech company. An iPhone is very different from a Samsung Galaxy or any other smartphone. It’s the smartphone that other companies have been trying to copy but can never emulate. The same goes for their computers, and other digital products. Still some write that Apple may have peaked and may never reach the same high levels its once had (“Has Apple peaked?”, 2013). Of course the loss of Steve Jobs has left a hole in the company. Jobs was the heart of Apple, not just the founder and CEO. Still, that doesn’t mean Tim Cook is screwing things up. Far from it.

Interbrand is the world’s largest brand consultancy, the annual Interbrand Best Global Brands Report is where they rank the top 100 brands in the world and in 2013 they wrote a favorable review of Mr. Cook.

From our perspective, Apple’s internal brand strength has remained steady. CEO Tim Cook has assembled a solid team that is aligned around the Apple vision, which has allowed them to deliver against the promise time and time again. (Best Global Brands 2013 Report, 2013).

Maybe  what I am feeling about Apple is what we all feel when a brand we’ve come to expect great things from is in the middle of some great new developments we don’t know about. We feel like nothing is happening, that there is nothing new coming. Everything takes time and Apple is certainly not a brand that rushes perfection.

You’ll find it interesting to know that Steve Jobs hated the words “branding” and “marketing.” According to Allison Johnson, former Apple VP of Worldwide Marketing and Communication, Steve Jobs was all about breaking the rules of branding and marketing. Jobs was about the experience and the relationship people had with Apple products. (Russell, 2014)

Johnson said,

Marketing is when you have to sell to somebody. If you aren’t providing value, if you’re not educating them about the product, if you’re not helping them get the most out of the product, you’re selling. And you shouldn’t be in that mode.

Corporate growth is dependent on many factors, one of which is the perceived value of the corporate brand (Read more about customer perceived value here) (Kokemuller, n.d.). Jobs understood the value of the customer and how customers helped in figuring out how to make better products.

Back in May 1997, at the 8th World Wide Developers Conference, Steve Jobs famously said “You‘ve got to start with the customer experience and work back toward the technology – not the other way around.”

Essentially Jobs was saying that the customers help with coming up with the next big ideas and innovations. The customer is the key to the brand’s success.

“What benefits the customer?” is one of the big questions to ask yourself as a brand. The value of the brand is dependent on how much it values its customers.

So what does Apple think will benefit the customer next? From the Worldwide Developers Conference this June, I’m guessing it’s luxury and style.

You might remember this announcement which stood out.

Apple acquired Beats by Dr. Dre for $3 billion (Karp and Barr, 2014). That is the biggest acquisition amount Apple has ever made. Just last Friday, September 5th, Apple told Vanity Fair they had hired influential industrial designer Marc Newson. Judging by his work, he has a funky futuristic style (Check out his website http://www.marc-newson.com). That makes 6 high-profile hires in total since last year, that Apple has hired. By most accounts it is a dream team for a luxury brand (Colt, 2014).

Perhaps luxury is what customers wants. After all, luxury items make others perceive us differently. We all know what it’s like to want to have one of the most coveted and ‘need to be seen with’  items, this goes back to grade school. Apple may be capitalizing on the fact that they are still one of the most coveted brands to have for desktop, mobile, and music. They want to protect that status because it gives them value.

To be valued is what every brand wants, and needs to survive (long term anyway).

The question is, is Apple trying to stay perceived as a valuable company, or will it stay a valuable company despite appearances?

Learn more about Perceived Value and Beats by Dre. See why Apple bought the headphone and speakers company.

Also, I loved reading this article http://www.businessinsider.com/apple-comeback-story-2010-10?op=1 learning about Apples comeback, when Steve Jobs returned after Apple went bankrupt. Really great read with great vintage pictures.

Reference Section

Love, Dylan (2014, September 5). Camping Out At The Apple Store For An iPhone 6: Yes, But Where Do We Pee?. International Business Times. Retrieved from http://www.ibtimes.com

Krantz, Matt (2014, September 4). Down again! How low Apple’s stock can go. USA Today. Retrieved from http://americasmarkets.usatoday.com

Rich, Bryan (2013, November 22). 10 Reasons Apple Will Hit $700 Again. Forbes. Retrieved from http://www.forbes.com

Eitel, Barry (2014, September 4). Apple Battered on Wall Street After Celeb Hacking Scandal, Loses $26 Billion. Allvoices. [Web log    post]. Retrieved from http://www.allvoices.com

Chan, Edwin (2014, September 3). Apple says its systems not to blame for celebrity photo breach. Reuters. Retrieved from http://www.reuters.com

Apple Media Advisory (2014, September 2). Update to Celebrity Photo Investigation. Apple. Retrieved from https://www.apple.com/pr/library/

Has Apple peaked? (2013, January 26). The Economist. Retrieved from http://www.economist.com

Interbrand. (2013, September 29). Best Global Brands 2013 Report. Interbrand Brand Consultancy. Retrieved from http://www.interbrand.com/en/best-global-brands/2013/Best-Global-Brands-2013.aspx

Russell, Kyle (2014, March 18). The Two Most ‘Dreaded, Hated’ Words at Steve Jobs’ Apple. Business Insider. Retrieved from http://www.businessinsider.com

Kokemuller, Neil (n.d.). What Is Customer Perceived Value? Chron. [Web log post]. Retrieved from http://smallbusiness.chron.com

Karp, Hannah; Barr, Alistair (2014, May 28). Apple Buys Beats for $3 Billion, Tapping Tastemakers to Regain Music Mojo. The Wallstreet Journal. Retrieved from http://online.wsj.com

Colt, Sam (2014, September 4). 6 Tim Cook Hires That Prove Apple Is Becoming A Luxury Brand. Business Insider. Retrieved from http://www.businessinsider.com