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    Why is Apple So Successful?

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    Amit Srivatsa
    Amit Srivatsa Oct 23, 2016

    Apple’s latest iPhone was launched about a month back. The much-awaited device is well on its way to breaking multiple sales records, many of which were set by previous iPhones! Although people predicted the success of the iPhone 7, it still amazes us to see it perform so well.

    By all standards of industry practices, Apple shouldn’t be a success. They don’t follow any of the prescribed rules of economies of scale or even subscribe to traditional growth engines. And yet they’re successful beyond compare. So much so that certain industry specialists have called it “the world’s largest fluke”.

    So what’s the secret behind their phenomenal success?

    While we cannot point to a single aspect of their working and say “This is what makes us click,” there are, however, certain tangible aspects that contribute to Apple’s growth. 

    Marketing

    Steve Jobs was a showman, and Apple owes a large part of its success to the showmanship of that great man. He raised everyday electronics from the mundane things they are and attached an aspirational value to them. Suddenly, a computer or a phone was so much more than just a device. It was a status symbol, a social necessity.

    That positioning can be seen in Apple ads even today. It’s a voice that borders on the narcissist. The “If you don’t have an iPhone, you don’t have an iPhone” tagline is a classic example of this. This is where Apple broke the traditional concept of “Customer is the King.” Under Steve Jobs, Apple said that we’re the kings. Our products are the kings. And you gain value by using our products.

    It’s a strategy that has worked wonderfully for them. But it could just as easily have gone all wrong.

    Artificial Scarcity

    In Economics, this is also referred to as “false demand”, or “manufactured demand”. Essentially, Apple creates an atmosphere of high demand, regardless of whether the product is actually available in the market. The perception of demand creates a sense of urgency among consumers because they think the device is going to run out of stock very soon.

    Forced in a position to make a split second decision – whether to buy the product or not – they often end up choosing the former option because they don’t want to be left out.

    Companies like Xiaomi and OnePlus have successfully replicated this model of sales. They have even taken the concept a step further by creating an “invite only” mechanism and used to create a huge “manufactured demand” for their phones

    Regularity, and Familiarity

    This is, perhaps, the most difficult aspect of  Apple’s success to replicate. And also the most important. As a company, Apple has built a legacy of providing services and devices that are intuitive, simplistic, and easy to use. This breaks down the barrier to entry into their ecosystem and attracts a large audience.

    Apple has also maintained a pre-determined calendar for the launch of its products. Apple users know that every fall, they will get an upgrade to their OSes, iPhones, and Macs. They also have a good idea about how the products will be priced and most of the features are more or less public weeks prior to the launch. This knowledge enables them to plan their finances and upgrades easily.

    Finally, the familiarity of the ecosystem is a huge advantage. Once you start using any one of their devices, it’s almost a certainty that you’ll buy an associated product from their family of devices. They complement each other so well, you hardly ever feel a difference while moving from device to device. 

    In Conclusion…

    In any story of failure, it’s often easy to pinpoint exactly where it all started to go wrong. In any success story, however, it’s very hard to locate a single point of positive pivot. More often than not, it’s multiple moving pieces adding to the velocity of accomplishment. Same is true of Apple.

    And yet, we try and dissect triumphs everywhere, in the hope that someday we might crack the code for success. Perhaps we should steal Tim Cook’s diary!

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