It is clear that Steve Jobs was a genius capable of selling the wildest dreams while having the sensibility to create products that deserve space in museums. He was not the first to introduce any of the products we now have as normal, but he was the first to create the necessity of owning one.
In the same poetic and almost artistic way of Jobs selling dreams, his successor (Tim Cook) has been incredible at harvesting the fields planted by Jobs years ago. He is an incredible banker with the mindset of the most successful bankers of the medieval age such as Jakob Fugger or Cosme di Medici, capables of seeing far beyond the “finite game” and playing for the “infinite game”.
The strategies of Tim Cook have offered to the world not only amazing daily use products, but have also found new ways of getting people to rely more on the Apple brand making them (unsurprisingly) products on the long term. And how is that possible? We normally see how free things come at the price of us being the product, but how is it possible that paying for a premium product nevertheless makes us be the product?
First we have to understand how Apple makes money.
This is their revenue in 2023. Their net profit was shy under 100b$ (down from the 2022 record year). To put it into perspective if they have to be ranked in the World GDP list they would rank at place 41 (of 216) just above Denmark and if we only take their net profit they would rank 70, above Guatemala.
This may be seen as a stupid comparison, but to run a company with 164.000 employees capable of beating so many world economies is something that very few companies in history have managed to do.
We all know how the story started in Palo Alto several decades ago. If you don't know, please consider reading the book “Steve Jobs” by Walter Isaacson, or seeing the 2013 film “Jobs” with Ashton Kutcher playing the role of Steve Jobs. Especially interesting is the part when they mention the obsession of Jobs for the design, and having a perfect design should be the main focus of every product. A way of touching the souls, understanding the people and bringing them to power… or quoting the 1984 Apple commercial “you will see why 1984 won't be like 1984”.
Unfortunately, and almost since Jobs left us, we have seen how we are a bit stuck in “1984” in the way that phones have barely changed between generations. From the iPhone 6 to the iPhone 8 they were the same with some different materials and colors, with most of the changes done either to the internal hardware or to the software. From the iPhone X to the iPhone 11 the story repeats, and once again in the 3 latest phones where only the dimension of the cameras and the position of them are the most visible changes.
The very same happens with the Apple Watch, where apart from the dimensions of the screens they are basically the very same device from the series 1 to the actual series 8.
Have they run out of imagination? Was the leaving of Jony Ive (CDO of Apple from 1997 to 2019) originated by a lack of possibilities to design, or is the lack of new designs the result of him leaving?
Well, if they have, no one cares… the products are selling like tickets to Taylor Swift's concerts and even when there are no longer queues of people waiting to buy the new iPhone they are now more present in every pocket as they were a decade ago.
They still generate that “i need it” feeling in another way. They are not touching our souls as much but they are touching our minds and especially our hearts.
They have pivoted from offering a solution to a problem we didn't know we had. To offer whatever the consumer is in need of having, and making it dead easy to achieve (easy yes, not cheap).
Customers want better cameras to record videos, they give them stabilizers, AI and control of the cameras to a point many professionals use iPhone cameras also for their work.
Customers want to take better selfies, or record tutorials using the selfie camera? Bye bye old 7mpx camera and hello 12mpx one with all the features the main camera has. Many will argue that other phones give you a better camera, but the simplicity of use is the game changer.
And lately, customers keep losing track of their devices? Good, let's give them the possibility of finding any device from any other device or internet browser… and even more, let's give them the possibility of finding their keys, bikes, pets,...
They have focused on making life easier at the same time they bring us wonderful products even if they are a little outdated when we talk about design. One could arguably say that Apple is the true “everything company” and not X, as Elon Musk pretended to build. Of course they are playing in only one field and since they cancel the Apple Car we can be sure they will stay in the field “things that you can put in your pocket, or on the table”.
But… there is more. At the beginning I mention how nevertheless WE ARE the product even when we pay an extra for the products. How is this possible?
For a time all this “easy integration” between devices… This way of making our life easier has been a way of generating a cult, creating a brand and specially generating customer loyalty. If you have an iPhone you are more likely to go buy an Apple Watch… and Airpods… and Airtags… why would you risk the compatibility between devices just for a 10-20% price difference. Of course with other products it does not apply, you go for the cheaper version and sacrifice part of the easiness for that better price.
But this amount of devices has opened the door for Apple to slowly enter in our lives to a point they might be a little bit more 1984 as we think… This is, of course, not exclusive from Apple.
They know how much time we have used our device or devices, they know what apps we use and when (even they profit from third party apps). They know how much electricity we use and what is our daily schedule… and all this has been agreed between customer and company since we bought our device. Some agreed with the very act of buying the device and others agreed while setting the device.
But it just dont stop with a phone or a laptop. We have the Airpods, measuring your ears and understanding your daily use. The Airtags, getting to know how often you lose things, if you appreciate your bike or your backpack, or if you have pets at home. Even the configuration will help them understand what kind of “property” you are trying to… tag… We are not only tagging our things, we are also saying what they are exactly. And thanks to the emojis we are even saying if the dog is brown or white, if the bike is a city bike or road bike and if we carry our cards in a wallet or a purse.
And we cannot forget the Apple Watch… the Apple Watch… the iPhone could be giving Apple over 50% of their revenue but their market share is little over 25%... meanwhile the Apple Watch brings home less than 10% of Apple revenue while having a market share of 36%. (Making a more easy integration of these devices with other OS have for sure helped to grow market share between fans of the Droid.)
But the Apple Watch has something that for sure is key to understanding Apple success and strategy… and why they might be more 1984 than we wanted them to be. They get our daily data beyond what apps we use, or how much we use the phone. It is capable of detecting our heart beat, sleep time, working out time and movement (of course this could be something they knew from the iPhone, but like this they are 100% you are carrying the device with you). And because we have given them access to all our information they can understand whether we are fit or about to have a medical emergency, as we can see in one of their promotional videos showcasing real problems where the Apple Watch play a big role (or all the role) in saving their lives (https://www.youtube.com/watch?v=fOHj5kGU4fY).
Now we move one step ahead to the IOS 17 (the 18 is about to be released) where they introduced a very interesting concept: for Airdroping information and files you only have to put one iPhone on top of another. This was a clear path for what it is to arrive: why to send only a picture, when you can send money! Apple has the information about your credit cards and bank accounts, what is stopping them from transforming into a virtual wallet or even to start their own bank? They have already tested the bank format with their Apple Card and it is a success. For sure the 3% they are offering does help, but it is the way of (once again) creating a cult and making it familiar for everyone.
You see how they are really doing everything, right?
Until now they know what we do (location and use of the phone), when we do it, why we do it (with who we are talking or what is our agenda), what we buy, how we are feeling. So if Mr Apple (or maybe Tim) enters a cafeteria with a very high degree of chances they will be able to know who we are by only seeing the existing information… but not to a 100% certainty. So they would still need to “cold call” us to sell anything else.
And this brings me to the last and very interesting point of free information I wanted to talk about: we are giving companies (not only Apple) for free, that they are profiting from since they can target much much better their customers (or resell the information). The personal emojis. They are funny, they are interactive, they can even move as we want them to move, but also give Apple and others the last piece of information they need without scanning our pictures: how we look. We freely describe ourselves willing to have a very accurate and realistic picture many times without realizing we are giving way too much information for free.
With all the described parts of how we use our phone, watch, personal laptop and even how we look, I think it is more than clear that Apple will in the near future be not only a Tech company, and a bank, but sooner or later they will be an insurance company.
We will see how they play their cards but clearly they have used their lack of “design skills” since Jobs and Ive left, with a perfect spider web of information and data analysis.
In other words, we have created a 1984 scenario where we are happy to be in. Maybe we should change the very famous 1984 Apple Ad and update it with a “in 2024 Apple will introduce the new Apple pay, and you will see why 2024 will be like 1984”.
Am I happy with it? Of course. As long as I am free of giving them the information I am happy with getting the advantages of the system, and as well I completely realize that Android (Google), maybe with other ways or with other devices is just doing the very same. So unless I want to live “outside the grid” I will have to accept that I am the product.
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