Apple Inc., delivered record results for the Oct-Dec’12 quarter and the stock market responded by pulling the stock down dramatically. Amazon delivered sub-par results for the same period and the stock went up 10%. What gives? Stock markets analysts have their own technical theories but I believe it boils down to a simple thing: high expectations from a brand. Not all brands and brand categories witness this phenomenon. You don’t really expect great things from a shampoo brand or a box of cereals. But certain high-involvement, lifestyle brands have great performance expectations.
Apple is in its own league when it comes to expectations and has a diverse audience for it: end consumers, trade press, competing brands and Wall Street. Each of them respond differently to Apple not meeting their own expectations: loyal consumers may feel let down but tend to forgive sub-standard delivery and give the brand another chance. The trade press is like pack of wolves – they gleefully attack Apple for any missteps, perceived missteps or even manufacture ‘mistakes’ of their own (‘Apple will be doomed if they do not launch a Netbook’, ‘Apple will be doomed if they don’t offer a cheap 7-inch tablet’ etc.). Competing brands fuel the fire – by planting stories, attempting to pre-empt any Apple launch with a launch of their own. And the stock market is said to manipulate the stock price. Why is Apple singled out and expected to deliver something spectacular in everything they do? I think its a combination of reasons: the game-changing nature of the iPhone launch and how it impacted the smartphone industry; the success of iPod & iTunes and their impact on the music industry.
What’s behind such reactions? Apple’s attitude to business & marketing is one aspect. They don’t participate as a brand in social media platforms, addressing consumer complaints & or reacting to tech blog comments. They let the Apple fans do that job. And of course they do nudge influential tech blogs to write positive articles about them. Sometimes, they are not allowed to comment – when it comes to stock prices for example. So it appears that Apple is radio silent and therefore unapproachable and arrogant to many. Secondly, Apple is routinely expected to deliver ground-breaking products – phrases like ‘Apple has not produced anything disruptive since the launch of the iPad’ and so on. Considering the iPad is just 3 years old, it is a bit too much to expect any company to repeat the feat every 6 months.
The most powerful aspect behind this attitude is the wish to see the mighty fall. Many don’t consider Apple as a ‘brand for me’ for a variety of of reasons: bias, feeling that it is of poor value & over hyped, too expensive, closed system etc. For them, the hype around Apple (which is through the year) strengthens those notions and only makes the brand more distant. And add Apple’s hyperbole (all companies indulge in it) when it comes to their product descriptions (most amazing, revolutionary etc., which is no different from claims like the ‘world’s most advanced technology’ commonly seen in automobile and consumer durable marketing) the negativity around Apple deepens. And that turns into glee when there is a misstep from the company (like the Maps debacle).
In this context, it is commendable that Apple doesn’t waver from its laser sharp focus. Steve Jobs excelled in it (saying no to hundred things that are possible) and that culture carries on. They do what they think is best for the brand and don’t get swayed by the opinions or advice in the trade press and social media circles. A trait much needed when there is so much written about you as a brand.