The Marketing Strategy of the Trillion-Dollar Company
How Apple marketed itself to become worth over a trillion dollars and a household name.
The year is 2007 and the location is San Francisco’s Moscone Convention Center.
Towards the end of the keynote, a man walks onto the stage. A man with a minimalist look, gray hair, circular glasses, a glimmer of excitement in his eyes, and pride in the way he walks.
He presents some statistics about the company’s performance in the first year and brings it to an end. Only to say the following sentence:
And there is one more thing
Whereas you would expect a crowd to be bored, this crowd was more intent at this moment than ever before.
That is because every time this man said he has one more thing, he often changed the world. Once it was the iMac, another time it was the iPod. This man was Steve Jobs.
On January 9th, 2007 in San Francisco, the one more thing was the combination of an iPod and interconnectivity — an iPod + a phone. This was the iPhone.
His keynote presenting the iPhone can give us a very deep insight into how Apple marketed itself and became the first trillion-dollar company.
After he introduces the name, he says:
Today, Apple is going to reinvent the phone
To a listener today, this might not have the same impression as it did a decade ago. Apple made its name reinventing something which usually ended up selling by the millions. First the Macintosh(reinventing the personal computer) and then the iPod(reinventing the portable music player).
In true Steve Jobs keynote style, he goes onto bash the competitors in this market. Some phones are hard to use, so consumers are confused half the time. Other phones are so simple that consumers aren’t satisfied. Then he shifts the tone from a general noun(consumer) to a more in-grouped pronoun (we).
What we want to do is make a leapfrog product that is way smarter than any mobile device has ever been, and super-easy to use. This is what iPhone is.
Apple sells products but it markets solutions.
So far its been 10 minutes into the keynote and not a single technical term has been thrown in. Keep in mind, this is meant to be a developer’s conference.
Jobs goes on for another 10 minutes, handing the audience problems that they weren’t even aware of. Followed by an explanation of how the iPhone solves it.
Apple as a company has a long history of using this tactic. Create a problem, sell the solution. Most recently, removing the 3.5mm headphone jack and selling the replacement(AirPods) at $159 USD.
For the next hour, Jobs explains how the iPhone will be an extension of the individual, along with the technical details of the device. As a day-to-day consumer, you probably don’t care about the processing power and how multi-touch displays work. Jobs understood that and used that to build the empire.
When you compare the latest iPhone to all the existing competitors, you’ll soon realize that the iPhone is nowhere near the best. In some categories it doesn’t even make top-10–yet people will stay pay thousands for it.
Apple’s second trick that made them worth a trillion dollars is banking on two consumer habits and marketing accordingly: the convenience of imperfect knowledge and not knowing what they want.
Imperfect knowledge is simply not knowing everything there is to know about a market/transaction at the time of purchase. This is heavily convenient for us. Do you really want to carve out the time to research all the phones in the market and then by one?
No.
You’d rather spend that time binging Netflix and buy the phone most of your friends have.
Apple marketed itself as social currency so that when you go to decide what to buy, an iPhone is all that you’re surrounded by. It also gives you something else in common with the society around you. You know us humans, we love our social acceptances.
The other trick was based on consumers not knowing what they want. Well, most consumers can’t pinpoint why they need their phone, because if they could, they would realize that there are better alternatives. For example, you travel a lot. You like to take pictures and share them with your friends. So your phone should have a great camera and a lot of storage right? Guess what, your iPhone isn’t the best at either of those things.
Yet you still bought it.
Think of a jungle and all the animals that occupy it. If I ask you which animal is the king of the jungle, the obvious answer is a lion. But if I ask you what is the lion best at, what would you say? Without rushing to google, there is no clear cut answer, because the answer is nothing. It's not the fastest, the biggest, the smartest, or the strongest. Apple became the king of the smartphone jungle and has been reigning ever since 2007.
For decades Apple marketed on that factor, but recently consumers in southern-Asia have realized what they want. Due to this, Apple’s market share in countries like India has fallen quite a lot.
One of my favourite movies of all time has a quote that perfectly describes Apple’s most powerful marketing tool. Inception (2010):
What is the most resilient parasite? Bacteria? A virus? An intestinal worm? An idea. Resilient… highly contagious. Once an idea has taken hold of the brain it’s almost impossible to eradicate. An idea that is fully formed — fully understood — that sticks; right in there somewhere.
Apple products made the trillion dollars on the books, but from a macro perspective, it was the idea that sold. The idea that is synonymous with the company. The idea of social status, a part of innovation, different than the rest, a natural extension of an individual.
This idea was also attached to Jobs. Often we see these companies that are intertwined with their founders. Bill Gates and Microsoft, Mark Zuckerberg and Facebook, Elon Musk and Tesla. The fact that this company’s foundation was the idea that was sold can be seen during its biggest dry spell(a period of time where revenue and profits are declining).
After Jobs was booted from his own company by the board, they saw a steady decrease in revenue. They poached a few CEOs from other successful companies like DuPont to fix it, but it only got worse. At one point the investors realized that if they wanted to be profitable, they have to bring the crazy visionary back. As soon as Jobs took the reigns, the company shot back into profits.
One of Apple’s biggest and most successful marketing campaigns is “Think Different”, now take a wild guess as to how many Apple products are in that commercial?
It's fine, go and google it. It's not common knowledge.
But the answer is 0.
Crazy isn’t it? No products sold, only ideas. Ideas that made the company the first trillion-dollar company in the world.
If you really think about it, this company is a tribute to all the crazy ones, the misfits, the rebels, and the troublemakers that made the company. And that idea is impossible to eradicate, which brought on the consumer-loyalty that Apple has even to this day.
As Jobs narrated, “the ones who are crazy enough to think that they can change the world, are the ones who do.” so who’s going to be crazy enough to build another trillion-dollar company? Elon Musk? You? Maybe even me?
