5c-ing is Believing

Writing for CBS Moneywatch, Erik Sherman reports that carriers are facing a decline in device churn, saying that in effect the smartphone market has now reached a point where new devices are not compelling enough to warrant changing out the old. And we can sort of see this in some of the product line announcements, with a prime example being the iPhone 5c, which looks not like a product designed to move up the food chain but like a product aimed at foreign markets. As such, it is easy to see that even Apple is now feeling the pressure to change its relationship with its ecosystem. 

So the iPhone 5c is basically a fashion statement. And speaking of fashion, Apple’s executive team now includes Angela Ahrendts, the former CEO of Burberry now in charge of Apple’s Retail Stores who, in interviews given prior to joining Apple, professed her appreciation for the company’s retail capabilities (including online), thus making it hard to expect much in the way of change. Ms. Ahrendts does bring international experience, though, which may be critical to the future of the Apple, given the lack of motivation to migrate phones. And considering the incomplete success Ron Johnson had in moving to JC Penney, it should be interesting to see if going the other way will work for Ms. Ahrendts. Also, according to The Wall Street Journal, former Yves Saint Laurent exec Paul Deneve is at Apple too (the gist of the WSJ article being that these two Apple execs represent high-end luxury sales). 

In looking at the commercials for this next generation of the iPhones, I am seeing a major disconnect. With retailers, all of the conversations are about the “s” and the spiffy new Apple A7 processor, whereas on TV the only new iPhone device I see getting pushed is the “c”. And other than the constant changing of the colors and speakers, I am not sure what else the company is selling with the “c”. Furthermore, when considering the diversity of the actors in the spots, it could be assumed that the “c” commercial is a globally targeted ad that got most of the buy, whereas on the other hand it could be Apple realizing that outside of the heartland the U.S. is now a multicultural experience. Regardless, the ad is not a benefits pitch, but a brand pitch, which is something Ms. Ahrendts knows a lot about. 

To be fair, Burberry went from being a little known upscale brand to the masses to a well-known and well-liked brand by the masses, and thus it kept its mystique while moving into the larger mass market. So perhaps that is the true purpose of Ms. Ahrendts’ job, to help the “c” class of iPhones to maintain the brand’s favorable perspective, while reaching out to the mass market (an objective that will require more than simply adding Burberry plaid to the styles available with the “c”).

If the rumors of Apple joining the mobile watch world are true, therein lies a definite opportunity to bring some style. Candidly, it is hard for me to see the driver with the Samsung and Qualcomm watches, as like a great many others I gave up my watch once my phone started providing the time.  So now I am to add a watch, but for what purpose?   Will it suffer the same battery problems as my phone?

Apple always makes things compelling, and I think the first movers have taken a serious misstep, which is – as is nearly always the case these days – to Apple’s advantage. After all, I still have my HP Tablet with a pen, which today nobody sees as a tablet.