MarketTrip - The REAL iPod Challenge (and Why the Business Press Has it All Wrong)
A couple of years ago, I spoke at a business conference on the topic of “How to build a brand through advertising” and to introduce the discussion, I presented the top 5 truisms of advertising as I defined them. My number one truism was and still is to remember that advertising can’t make you something that your not. The same thing can be said about products. In both cases, and interpreted another way, it's to remember your core business and especially if you've been successful, respect why you are who you are.
Fronting that you're something else - either through your products or your advertising just makes you look at best, clueless and at worst, it can alienate your bread-and-butter customers and isolate your core business. Boardroom coups are characterized by the ouster of execs who tried to be broad without remaining focused on being deep.
This week, Apple reached the milestone of 100 million iPods sold. And once again, as happens with the tic-toc of clockwork every couple of months, the business press is abuzz with stories about what competitive offering, if any, can dethrone iPod as king of the personal music player space. It's a familiar story line but these days, if you read between the printed lines and examine what competitors are putting out there, it seems to have a new twist.
Their focus seems to have changed from “dethroning” to “dislodging” iPod from it ~75% market share. Competitors seem to have acknowledged that iPod is the 800 lb gorilla and iTunes is the archetypal interface for distribution. Look closely and what you'll see is that everyone in the marketspace is clamoring to offer up not an "iPod killer" but an equally compelling (and perhaps stealthily superior) combo of product and service with hopes of chipping away at iPod/iTunes share.
They'd like to do what the Japanese automakers have done to GM (and in a larger sense, Detroit) over the past 30 years.
Competitors clearly believe that “better” technology is the best possible way to weaken Apple's full-nelson on the market. And it's logical to assume that offering "better" technology (read: more bells and whistles) is a way to achieve this. It's a premise time-tested and proven in the technology world…digital cameras, flat screen TVs, notebook computers are just a few examples.
The business press mistakenly assumes that "better" technology is aimed at the old goal of annihilation...perhaps because failure or conflict makes for a better story. Or perhaps because they assume that the digital music landscape is governed by the same black+white, quantitative, specifications-based decision-making that drives the PC business.
Unfortunately for Apple's competitors, music players and distribution (unlike cameras, TVs and computers) have not yet achieved commodity status. And as such, from a brand perspective, they're not interchangeable. Why? Because music (and in modernity, the means to play it), anthropologically, has always been highly personal and basely emotional. In short, there's more to consumers' decision about which player to buy and music service to use than technology or pennies on the dollar.
Microsoft’s Zune bested the iPod with a bigger (and bi-directional) screen and the ability to wirelessly share songs between Zunes. And now the latest heir to the title “potential iPod killer” is SanDisk’s Connect player which pairs with Yahoo’s music service to offer wireless downloads of songs at any hotspot. On paper, all three technologies seem "covetable" and appear to put iPod at a disadvantage. But Zune flopped by almost all market definitions. Will the Connect suffer the same fate?
Only time will tell but I'll go out on a limb here and say that it will... And why am I willing to say this now, having never touched our used the Connect (or Zune)? Because it's made by SanDisk.
Is this brand prejudice? Am I exhibiting product snobbery? Am I being paid by Apple? The answer is "no-way-Jose" to all. What I believe is that Connect will fail where Zune did and several iterations of Sony's Digital Walkman before that because sometimes, in some product categories, consumers DO buy the brand as much as they buy the product. That doesn't mean brand is more important than the product experience...it just means sometimes they're darn near (gasp!) equal.
And when consumers do buy the brand, the brand they buy is the brand they best associate with the role they expect it to play in their lives. Apple is music. SanDisk is memory (boring). And Microsoft is…well just about everything unglamorous about computing. Sony is...who knows, these days? But it's not personal, portable audio...which is ironic since they invented the market with the original Walkman back in 1979.
"Life role" is largly a factor of people's perception about how they will use something. Where one brand gains an advantage over another is where the perceived motivations of the maker seem to elevate a brand and the assocatied product. People develop relationships with some types of products...music and cars are two of the most personal pruchases because both speak volumes about the owner. It's why people carry their "iPod" and not their "music player"...or drive their "Mini" and not their "car."
Apple makes money hand over fist from the iPod and iTunes…but it doesn't feel like dollars and cents is their motivation or the reason for iPod/iTune’s existence. We can picture Steve Jobs playing air guitar to Steppenwolf...try that with Bill Gates and it makes your head hurt! Apple as a brand is all about the emotional and tactile experience and hundreds of millions of consumers believe that if you want a pure music experience (just like if you want a pure computing experience*) Apple has the edge over everyone else.
With Microsoft for sure and SanDisk by extrapolation, the motivation for their attempt to crack the music player market feels motivated purely by business. Everyone knows that Microsoft’s MO is to come in and overtake the innovator through unabashed emulation and market presence. Consumers don’t like that. It feels evil and dirty. Evil and dirty clash fundamentally with music...we feel good vibes from and attached to our music collections (even if the music is Marilyn Manson!).
The same can be said for SanDisk…they’re a memory and storage media company…what could they possibly know about music and hope to get from entering the market…other than an uptick in their bottom line. Maybe they do know something about music but the average consumer doesn't think so...
Unfair characterizations? Most likely...but consumer belief trumps corporate line any day of the week and twice on Sunday. And consumer belief is only influenced by advertising so far. iPod ads grew out of Apple's own exuberance for the music. Not to seem "cool" or as a ploy to tap the collective yearning for commercials you can jam to!
One of the cold, hard truths of business is that you are who you are. And that’s followed closely by the fact that it’s damn near impossible to change how you’re perceived after years of business. I challenge you to name two brands who’ve radically reinvented themselves to the extent that they can lead in a whole new market?
My point? Microsoft, SanDisk, Sony and everyone else including Creative, Samsung, etc...can and should continue to work in this space. Innovation lifts all boats...and if they really do understand that they're unlikely to defeat iPod/iTunes, the evolution of the technology and increased choice will be great for consumers. But for the business press, get over iPod and iTune's dominance...seems like everyone else has. The true challenge for companies and the real story for the press will be whether the new technologies that manufacturers roll out resonate and if, how and why (or why not) they're adopted by consumers.
*Disclaimer: I own an iPod but I'm a PC guy.
