Forget Features: Its Brand Will Sell It Out
Chris is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
It has been rumored that the latest iPhone from Apple (NASDAQ: AAPL) always sells more than all other previous versions combined. Impressive. Even more impressive is Apple’s ability to acquire new channels for distribution.
Apple started with AT&T then added Verizon, and is now ready to add the world’s largest carrier China Mobile, pumping iPhones across the globe.
Apple shares are adding jet fuel to the NASDAQ and the S&P 500 because it makes up such a large percentage of each, and Apple shares could likely skyrocket if this iPhone meets or exceeds expectations.
But it’s Falling Behind
Competition is catching up. Google (NASDAQ: GOOG) has an array of devices for its Android operating system, and the company’s new Motorola RAZR line is sleek and stunning. Also, Google offers a host of apps – many free – and users can even test them using Amazon’s Test Drive feature. The feature allows users to try a paid app for free before ponying up any cash.
Also, Google’s devices are cheaper and cater to those who are not die-hard Apple tribesmen. Thus, if Apple’s brand becomes diluted or its phones grow passé, Google stands ready to profit.
Of all companies, the partnership between Microsoft (NASDAQ: MSFT) and Nokia (NYSE: NOK) impress the most. Nokia was once the largest handset maker in the world, and it rivaled Research in Motion for the top-of-the-line devices before falling into hard times by offering an outdated, poor Symbian operating system.
Microsoft has fixed that.
Microsoft’s Windows 8 is the ideal match for Nokia’s new Lumia 920 and 820 phones. New phones coupled with the much-anticipated new software have made for heavy press. But more importantly, the two firms just created an innovative product.
First, Nokia’s display has “live tiles” that present information or photos on the phone’s home screen (it sounds confusing, but this photo on Nokia’s website explains it perfectly). Moving to tiles is a smooth upgrade from apps on the homepage.
Also, Nokia’s camera is perceived as the best on the market – topping Apple’s and Google’s. Finally, Nokia has created a touch screen that functions with gloves. Users who wear snow gloves or work gloves understand the difficulty of navigating a touch screen that only responds to the human hand.
Not Enough – Yet
Sadly, Google’s, Microsoft’s, and Nokia’s upgrades will not be enough to dethrone Apple. The iPhone game is not one of features, but of benefits.
Features are positives about the phone. For example, Nokia features live tiles, the best camera, and a touch screen that responds to gloves. Features are cold and emotionless.
Benefits, though, are laced with emotions. Benefits explain how features make a user feel by meeting the user’s explicit needs. For example, iPhone 5 users will feel confident, smart, and tech-savvy knowing that they own Apple’s newest, widest-screen, and most thin smart phone. A buyer will feel like he is the life of the party when he whips out his jaw-dropping new iPhone to take a picture of his friends, then immediately posts it to Facebook.
The difference between the two is not the features – it is the product. Apple owns the term smart phone, and that is why customers will keep buying it. Because it makes them feel important and popular.
Eventually features will win, but only if the brand can tell a compelling story around the features. If the current trajectory continues and others out-innovate Apple, Apple may become just another smart phone player.
But for the brand that essentially invented the smart phone – and is first in 2012 to bring its best creation to market – the future looks as bright as ever.
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ChrisMarasco has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Google, and Microsoft. Motley Fool newsletter services recommend Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
