After the boring iPhone SE, Apple should pause, and look back.

Apple, on the 21st of this month, launched the much hyped 4 inch iPhone, dubbed as the iPhone SE.  This iPhone, according to Apple isn’t just the most powerful 4 inch ever, but could also be the iPhone with the simplest presentation that Apple could offer to its customers. It should go like, ‘Take the internals of the iPhone 6s, put it in the iPhone 5S case, take away 3D touch and market it as a phone for people who prefer the compact 4 inch screens.’

Apple enters the mid-tier segment but with speed breakers on Innovation

In the real world though, Apple is positioning this as a mass market product for people in the mid-tier segment who want an Apple phone but couldn’t afford one until now. This is for customers who were either unhappy with their Android/Windows devices or were in the hunt for an iPhone in the second hand market (This market is really huge by the way). These customers would most likely be 1st time Apple users who would be ready to shell out a minimal premium to enter the Apple eco-system. Barring a minor % of people who actually prefer a 4 inch phone, this is for the customer who dreams of a Mercedes but eventually settles for a Skoda. Both are my favourites for the record.

The markets always looks north

Apple is a company with a $590B+ market capitalisation. It’s phenomenal rise and influence as a tech company is next to none. However, such rise and influence often comes at a cost: the expectation to ‘eternally’ grow at a scorching pace, ignoring the fundamental law of averages. Apple’s shareholders are hungry for more growth and the market will take Apple by its horns if it falters on the path of growth.

Such expectations and pressures could even make the heavens nervous. Until now, the tides were in favour of Apple and there was an invincible Halo effect that continued even under the leadership of Tim Cook, a genius in his own right. Now, as is with any Halo effect, the influence of Apple on the minds of the consumers is withering. And Apple’s decisions are a result of that.

Innovation is taking a beating at Apple. 

Apple is a company that has built its reputation on innovation. It’s massive user base and respect for the brand was an end result. The tables have shifted now, as Apple is now seen juggling with cosmetic innovation to keep the juggernaut running at a steady pace. Apple, with the launch of the iPhone cover at $99, showed that the urge to keep the mills running can hasten innovation and ridicule the company’s reputation. This juice pack was dubbed as the ugliest design by reviewers and admirers of Apple. The Apple pencil and the Apple keyboard at $99 and $139 each, meant that Apple was finding additional ways to make that extra buck to keep the investors happy. the clever decision to start with a 16GB iPhone instead of a 32 GB base version also meant that customers would essentially be misled into believing that they are making a voluntary choice to upgrade to a 64 GB version by just shelling out $99 more. In India, this choice could mean shelling out an additional $130!

Apple : Time to learn some lessons from your biggest competitor : Samsung

The iPhone SE is also seen as a compulsion to keep the company growing, even if it comes at the cost of the company’s reputation as an uncompromising innovator. Apple has very wisely entered the mid-tier segment of the smartphone market where there is an opportunity for Apple to grow by stealing the Android pie from other manufacturers but this launch seemed like a company in a hurry. Everything from the presentation (which was really subdued and boring) to the design of the phone was unworthy of Apple. Apple has made minimal changes to the design of the iPhone 5s and added almost nothing to the specs of the iPhone 6s when assembling the iPhone SE. Simple features like water proofing and wireless charging functionality could have been added but Apple has chosen to reserve these features to excite investors and customers for the latter half of the year. The starting price in India has been pegged at Rs. 39,000 and makes me wonder why any smart buyer would not opt for a Samsung Galaxy S6 instead of this one. Samsung could throw in a surprise too by launching an updated S6+ to take on this segment and leave Apple jolted.

“The world needs Apple to behave like Apple. Seriously”

Apple is still a customer focussed company as on this date but its commitment to the cause is waning with every launch. Apple’s management should realise that growth was and will continue to be a result of real innovation and increments in the user experience. Customers take some time to digest developments in perception and shall continue to pick up any device that Apple comes out with for a few more years. However soon some competitor will eventually seize the opportunity to trip Apple when it can. One should learn a lesson from Samsung when it was faltering in innovation and differentiation until 2014. It revisited the root causes of success in consumer tech and reshaped how customers perceive Samsung. Today, the early adopters and expert reviewers would not blink in declaring that in areas like camera and real world features, Samsung is inching ahead of Apple. As of today, Consumer Reports, a very respected name in technology has dubbed the recently launched Samsung S7 as the best phone ever.

Investors cannot be blamed for Apple’s decisions. They have put in their money and will expect staggering returns for their buck. If Apple wants to continue to dominate the landscape for not just three but another two decades, it has to look at a roadmap that is sustainable, even if it means taking a pause for a fresh breath of air. A couple of years of stagnation would not then indicate that the company has been wrecked, but is ready for an another giant leap to leave us all in admiration. The world needs Apple to be like Apple. Think.

 

Jobs might not be around, but his reality distortion field definitely is.

We think that we make decisions consciously and with all the information available with us.  In reality, the mind often acts independently and has biases that we are unaware of.

Reality distortion field ? That doesn’t apply to educated minds right? We all think we wilfully make choices and are conscious of our decision making? That we are completely aware of our cognitive abilities and the mind doesn’t have a ‘mind’ of it’s own? While most of us think this is true, the reality is often stranger than fiction. Our mind makes use of the information and gets influenced by external factors more than we could ever imagine. The decision making process of our brain works very differently and though it might sound bizarre,  we aren’t often aware of what leads our mind to take the decision that it eventually takes.

So, how is it Apple makes us desire for their products year after year? Come September and it often seems that our life is incomplete without owning that envious gadget. Our life seems dull without the latest iPhone, an iPad is a must for any go-getter and the Macbook seems to have it all for becoming the ultimate benchmark in laptops. Call this the Halo effect or call this the genius of Apple’s marketing strategy. (And now comes the Apple Tv, and suddenly all the hardware that entertained us all this while seems outdated!)

To be very honest, Apple’s launch events are anything but a surprise. The words ‘love’ and the ‘most advanced’ seem overdone and they are unable to come up with any adjective to describe the products they come out with. Every presentation seems like a repeat telecast of the last year, albeit with a few changes. Jony Ive is presented as an elusive character who sits somewhere in the background and all his focus is geared towards creating life-changing designs and products. He seems like a ‘philanthropist’ who is willing to sacrifice it all for making this world a better place than it already is.  Tim Cook comes on stage and offers a few statistics about Apple’s growth and then invites Phil Schiller and so on. An App maker comes on stage and tells us that how Apple has been an angel in their lives and how his app is a result of Apple’s efforts in building the software and the hardware (forgetting on stage that Apple doesn’t do it for free and takes a 30% cut!).This all seems like a film production company coming up with a sequel only because it knows it can ride on the success of the last hit at the theaters.

This is to do with an image creation, carefully thought through, engineered and designed by the wizards at Apple. Apple projects itself like the batman of the tech world, and will be the rescuer of the world with its gadgets that will change the way you act and think. The sole burden on improving people’s lives lies with Apple and it will go through great lengths to achieve what we desire (true or not is a separate argument). Take for example the iPad Pro launched this week by Apple. The Microsoft Surface Pro has been around for over a year now and it is safe to say the concept and logic behind the iPad Pro is a culmination of Microsoft’s efforts. Apple derided the Stylus some years back and suddenly , all of us are already believing that the stylus will change the way designers and artists look at the iPad Pro. The keyboard designed by Apple has already been around with the Surface and yet suddenly spending $169 on the keyboard seems worthy. Surface didn’t get half the attention that Apple has. It appears that we judge brands on the basis of how we expect them to be and go by intuition and perception rather than by logic and actual on ground performance. As in the Halo effect, if we are in love with a brand, we will love it no matter what comes across us. We will , without knowing, ignore the flaws and over-rate its benefits. This is actually a lot like falling in love. Research says that when in love, our mind draws the ‘ideal’ picture of the person that we should be in love with and starts believing that the other person matches that image – point by point. So more often than not, we are in love with the image in our heads that the real person standing right next to us. Confirmation bias will dominate all our thoughts and actions. As with Microsoft, the image of a bulky, lazy and an arrogant brand suits our perception. So we will take months and years to have our opinions altered even if Microsoft has already started delivering better than ever before. We will ignore the fact that Windows 10 is now free for most of us and that the cloud features on the new Office are class-leading. We will intuitively judge Microsoft with skepticism and judge Apple with optimism. We will undermine Apple’s flaws and give more weightage to Microsoft’s mistakes. This effect has been around for years and with Apple it only seems amplified and easy to explain.

Consumer behaviour psychology makes it more difficult for someone like a Microsoft to transform itself and gives more cushion to Apple than it really deserves.

Apple’s Halo effect might not last forever until it reinvents itself at a suitable time. It is currently riding on this brand perception to run away with product limitations. Take the Apple Tv for example – it was launched with great fanfare but one clinical look will tell that this a ‘mere’ modification of the last year’s version. The only thing fascinating was the Apple Remote and one wonders why an A8 processor is at the heart instead of the latest generation A9 family of processors. The ‘Hey Siri’ feature is not a new feature – Google has come with this already. Apple’s take on it is an incremental improvement, given the time advantage. We will also ignore that something like a Google Chromecast even exists and start counting our money for lining up the next Apple TV purchase. Android on TV already has been offered by brands like Sony but we give their innovation little importance and time.  We shall continue to treat them like laggards and grandfathers of the 20th century. Our mind, literally speaking is lazy enough to not think through our process of decision making.

The point is not whether this or that offers more value, but whether we are looking to explore alternatives in the first place.

Apple wants us to rightly believe that it is indeed consumer centric. But one shouldn’t forget that Apple is now a massive business empire and if it has to keep the mills running, it will need billions and billions of revenues year after year. It is also answerable to its stakeholders and has to justify the size and scale it is operating at. All of Apple’s comfort zones lie in the massive volumes combined with unbelievable gross margins and any slippage in either of this can have a domino like effect on the entire company. The halo effect is part strategy and part compulsion.

So, the next time you go out to buy the next ‘BIG’ apple product, pause and think twice – Is it actually because this is the best product and value available in the market right now or is it simply the Halo effect? As Daniel Kahneman, A Nobel winning Israeli – American psychologist once said, “Suppose you like someone very much. Then, by a familiar halo effect, you will also be prone to believe many good things about that person – you will be biased in their favor. Most of us like ourselves very much, and that suffices to explain self-assessments that are biased in a particular direction.”

On a lighter note, Jobs deriding the stylus many years back and Schiller choosing to build his own legacy!