Global Market Data
Global News Journal
Pakistan: Now or Never?
Front Row Washington
David Cay Johnston
The Great Debate
Personal Finance Video
Life & Culture
At economic debate, Romney says he can lead
Saudi says Iran will "pay the price" for alleged plot
Juncker lists 10 steps to stem euro zone crisis
Exclusive: China begins lobbying on yuan bill
Hamas steals Abbas thunder with prisoner deal
Euro crisis, yuan sow discord as G20 gathers
Chrysler, UAW reach tentative labor pact
MuniLand: When national and state data diverge
Video: China joins ranks of the credibility-impaired
Slideshow: "Rage" against Wall Street
AOL CEO pitches investors on Yahoo deal: sources
12 Oct 2011
Alleged Iran plot "dangerous escalation": Clinton
12 Oct 2011
Gibson Guitar CEO slams U.S. raids as "overreach"
12 Oct 2011
Alabama immigration law decried, applauded as some flee state
12 Oct 2011
T. rex bigger than thought, and very hungry
12 Oct 2011
California governor signs controversial ”Dream Act”
Hank Williams Jr. lashes out at media in new song
Insight: Occupy Wall St, the start of a new protest era?
Japanese airline, ANA, apologises for plane flip
Fri, Sep 30 2011
Rihanna's "inappropriate" outfit halts music video
Tue, Sep 27 2011
China : what is a "hard landing"?
Sun, Oct 9 2011
After iPhone's debut, Cook must reposition Apple brand
Bullish Apple investors start calling for dividend
Wed, Oct 12 2011
Apple's iPhone 4S breaks early order record
Tue, Oct 11 2011
Jobs authorized biography so his kids can know him
Fri, Oct 7 2011
Samsung says third-quarter to top consensus as phones boom
Fri, Oct 7 2011
Apple's board needs to step up to new era
Fri, Oct 7 2011
Analysis & Opinion
Corporate governance chart of the day, Benford’s Law edition
The godfathers of Steve Jobs’s genius
Apple CEO Tim Cook speaks at Apple headquarters in Cupertino, California October 4, 2011.
Credit: Reuters/Robert Galbraith
By Edwin Chan and Supantha Mukherjee
Wed Oct 12, 2011 5:42pm EDT
(Reuters) - Apple Inc debuts its fifth generation iPhone this week minus its visionary leader for the first time. But CEO Tim Cook may already be thinking ahead to his greatest challenge: repositioning the company's fabled marketing apparatus to safeguard the brand.
With Google Inc Android phones gaining momentum, Cook is likely sticking to established battle plans at this critical juncture. But longer term, he may be better off moving the company out from under Jobs' gargantuan shadow. The Apple co-founder bequeathed a mystique and cachet to the brand that will be near-impossible to replace, cultivating a community of fans hooked on ease of use and rich content.
It's those perceptions Cook -- who in two months on the job has already shown Wall Street and Silicon Valley glimpses of what an Apple without Steve Jobs might look like --- must focus on preserving rather than the inimitable aura of the co-founder who died last week at the age of 56.
"There's no question Apple is going to go through a time of transformation. There's a lot of risk around the brand," said Tim Calkins, a marketing professor at Northwestern University's Kellogg School of Management who has advised clients like Eli Lilly & Co. "A lot of pressure will fall on Tim Cook to step up. The hard part is, he's not Steve Jobs, nor can he try to be."
Cook has the luxury of time to ponder his next step. Advanced sales of the iPhone 4S -- despite disappointing fanboys and pundits hoping for more than an enhanced iPhone 4 -- surpassed one million in its first 24 hours globally, smashing the 600,000 for the iPhone 4, though that model was sold in fewer countries.
Sales in stores begin October 14 in Japan, Australia, France, UK, Germany, Canada and the United States.
Some analysts expect fourth-quarter iPhone shipments of as much as 30 million or more, almost double from a year ago.
The fifth iteration of the iconic smartphone comes with a faster processor and a better and more light-sensitive camera, but little else to separate it from its predecessor. But tech experts say the real gems lie beneath the phone's familiar sleek casing.
Influential reviewers Walt Mossberg and David Pogue raved about "Siri" -- a voice-command activated assistant that understands and responds to spoken commands and questions in context, such as queries about the weather or a friend's phone number. Pogue called it "crazy good, transformative, category-redefining speech recognition."
"Despite Siri, the iPhone 4S isn't a dramatic game-changer. Some new features are catch-ups to competitors," Mossberg wrote in the Wall Street Journal. "It isn't perfect, and is labeled a beta, but it has great potential and worked pretty well for me, despite some glitches."
Both reviewers marveled at Siri's ability to hold conversations, from basic "give me directions to ..." to quirkier discourses.
"When I asked it, 'What's the best phone,' it said, 'Wait ... there are other phones?'" Mossberg wrote.
BLAST FROM THE PAST
Cook now faces the monumental task of not only preserving, but also advancing Apple's lofty status in the industry and among fickle gadget consumers. Moreover, he must do that while honoring his former boss and mentor, a master showman who time and again displayed an uncanny instinct for driving consumer tastes.
"Things for the next two years are pretty much set in stone in terms of what they want to achieve, and the new kind of product focus they are putting out. After three years, the new management is going to make its mark," said Jack Salzman, principal and founding member of Kings Point Capital Management. "If there is any pressure on the new Apple management, its probably going to be self-imposed, because of the void that was left by Steve Jobs."
The product pipeline is where Cook needs to stamp his own authority on the company. He can stick to script only so long before he risks stagnation and damaging the brand. Apple needs to find a formula divorced from Jobs' persona, observers say.
Indeed, during the iPhone 4S' media launch last week, Cook stepped back and allowed the supporting cast -- such as marketing chief Phil Schiller, software head Scott Forstall and design guru Jonathan Ive -- to tout the device, something Jobs would have sought to control from start to finish.
"They've got to find a new voice in the market. Steve Jobs was so much the face of Apple," Calkins said. "Protect the core elements of the brand, but at the same time, move forward."
"You can't turn Apple into a memorial for Steve Jobs," he added. Cook shouldn't "be afraid to make changes in the way the company communicates and reaches out to consumers."
Branding and marketing aside, ultimately Apple's products -- not their hype -- need to be judged on their own merits.
Apple's meticulously scripted marketing blasts are the stuff of Silicon Valley legend. After rumor and speculation builds across the Internet, the company sends out a cryptic email invitation to tease the product. That, in turn, is typically followed by a splashy extravaganza that culminates in a global first-day sales event across the globe that often has people lining up around the block days in advance.
"Past this launch, there isn't really a killer new launch. I am sure they have got a number of products in development," said Pat Becker, a portfolio manager at Becker Capital Management. "But once the phone is out, you will have all the price points covered, you have got the different carriers covered. To me, that's' a start toward reaching saturation in the phone market."
(Reporting by Supantha Mukherjee in New York and Edwin Chan in Los Angeles; Editing by Peter Lauria, Bernard Orr)
Related Quotes and News
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
i am sure glad Apple runs Apple instead of “marketing experts”, “professors” and “managers”…
with people like you and your ilk, who needs run of the mill no soul companies…
Google is not “gaining momentum” Android is a about 100 different things right now, none of which is even close to Apple, even though there are about 100 different Android Manufactures, iOS still commands the most market share, and the most web presence of any of them… and many of them COMBINED…….
there is a reason Apple stock is the highest market cap company, AND GAiNED THAT during all of this “gaining momentum” talk… mainly because the stock market doesn’t believe in fairytales like apparently you believe in, they believe in hard facts, and phones that actually sell, rather than having to be given away since about 30 other phones just hit this month, and 30 more the month after that… all of which end up in a bargain bin somewhere…
Oct 12, 2011 7:44pm EDT -- Report as abuse
This is absolutely an IDIOTIC article.
Cook DOES NOT have to reposition the Apple Brand. What for???
Apple is THE BEST BRAND IN THE WORLD. Cook does not need to reposition it from NUMBER ONE.
Under Cook, Apple will:
1. REMAIN THE MOST FOCUSED TECH AND CONSUMER COMPANY IN THE WORLD.
2. REMAIN THE LARGEST START-UP IN THE WORLD.
3. WILL CONTINUE TO CREATE THE BEST PRODUCTS IT CAN.
4. WILL CONTINUE TO TAKE RISKS AND NOT SETTLE.
Apple never takes a defensive position. “Safeguarding” Apple is the complete opposite to Apple’s DNA. It all-out competes. It even is willing to kill and take marketshare away from its products if it believes it has a better product. Apple will forever stay hungry.
Oct 12, 2011 9:23pm EDT -- Report as abuse
Apple had two things going for it: Excellent marketing and Steve Jobs, who steadfastly maintained the company’s focus.
Without Jobs, they have marketing. Now that they’ve got a gigantic fan base, they can coast on product loyalty (as is evidenced by the rabid support of the Apple fanbois) for quite a while. But they’ve already done something Jobs would never have allowed: the release of a new product before it was ready. Apple has always met or exceeded the expectations of its customers (and buried the things that didn’t), but they missed that goal with the iPhone 4S.
Jobs would have made people wait on the iPhone 5 until the iPhone 5 was really the iPhone 5. But the fanboi base ensured a hit even though the upgrades in the phone are only marginally better than before and there are no styling changes. That’s coasting on brand loyalty.
The Apple of the past is gone with its co-founder. They’ll need another draconian, dictatorial hand on the helm in order to ensure continued success and Cook doesn’t have it.
Oct 12, 2011 10:33pm EDT -- Report as abuse
See All Comments »
Add Your Comment
Social Stream (What's this?)
Back to top
New York Legal
Support & Contact
Advertise With Us
Connect with Reuters
Our Flagship financial information platform incorporating Reuters Insider
An ultra-low latency infrastructure for electronic trading and data distribution
A connected approach to governance, risk and compliance
Our next generation legal research platform
Our global tax workstation
About Thomson Reuters
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.