Why didn’t Apple just call it the iPhone 5?
My first post for FirstPost.com just appeared. Here is a link to the article. Reproduced below is the article the way I wrote it. It has been slightly edited at the FirstPost site:
The Freakonomics blog has a post (click to see the original) where the author wonders if the stock price of Apple would have dipped as much if they had just said that they were launching the iPhone 5 instead of calling their product the iPhone 4S. As evidence, the blog reproduces the chart below and argue that since the market climbed a little later and on the next day, it shows that the market realized that it was a great product and the name didn’t matter. Freakonomics concludes that this was a case of bad marketing on the part of Apple.
Well, I disagree. For two reasons. One is that I am writing this on the day that Steve Jobs died. And I refuse to accept criticism about Apple on this, of all days. But the second reason is that I think it would demean the brand to do so. Let me explain.
Marketers are used to changing brand names without much provocation. Older readers will remember the good old Ambassador which would change its model from Mark II to Mark III to Mark IV with no change to the product other than a few cosmetics like the shape of the tail lights. In packaged goods brands get restaged from time to time. From ‘High Power Surf’ to ‘Extra Action Surf’ to ‘God knows what Surf’. Consumers have learnt to tune out from all these name changes even when the communication for the brand called it a “revolutionary” change.
At the other end of the spectrum is a brand like Honda Accord. The Accord was launched in 1976 and was a hatchback (picture below). The Accord has been through several changes and the current model (pix below the old model) is the 8th generation product. In this time, it has evolved from a hatchback to a mid size car to a full size car. For 15 years it has been the highest selling Japanese car in the USA and for two years (1991 and 2001), the largest selling car in its class in the world. Currently it is sold as in sedan and crosstour versions. Yet the name has stayed the same – Honda Accord. In all markets across the world.
So which of the above two strategies is right? Should one tweak the name of the brand at the slightest provocation or take the view that products change, but a brand is timeless?
There are obviously arguments for both sides and no reason to believe that there should be one right answer. However let us try to work out the logic used by Apple.
Steve Jobs has said that he believes that Apple is not just a technology company, but is at the “cusp of technology and the liberal arts”. A technology company would focus on the insides of their product. By that yardstick, the iPhone 4S is a revolutionary new product. It has the ‘Siri’, which is likely to change the way in which we interact with our mobile devices. Plus a host of other new features that make it way superior to the iPhone 4. Any other technology company would have seen this as enough reason to call this a ‘next generation’ product.
But not Apple. Apple is about design as well as about technology. That’s what differentiates it from every other tech brand. The new product is in the same chassis as the iPhone 4 and so, of course, it cannot be called an iPhone 5. For that we need to wait for the new tapering shape (a la MacBook Air) which we shall probably see sometime next year.
A brand creates a long term relationship between a company and its consumers. It should not be changed for short term goals. (The stock price on one afternoon has to be a new record in short term goals). We all need to have a clear idea of how our brands are going to evolve over time and communicate that to the consumer. In the long run, this will create brand successes.
I would love to hear your views on the branding strategies of Apple, Honda and packaged goods companies. Do you think brand names should be timeless or change every season?