Thursday October 13, 2005

Finally …

Jack Shafer calls the press corps on their shameless Apple worship. Someone had to, particularly as the hype surrounding the video iPod approaches absurdity. Shafer hits all the right points. The iPod may be a well-designed little machine, but it is certainly not unique for what it actually does, and it’s overpriced to boot. (Its extensions, like the Shuffle, are even more so.) I’m always surprised how even confirmed skeptics turn pious when you question their slavish devotion to their iPods. You might as well question the authenticity of the young Bob Dylan.

Shafer doesn’t get into this, but Apple’s continuing PR success is all about Americans’—or, rather, a certain upper-middlish class of Americans’—obsession with  authenticity. And it’s ironic that the halo of originality that surrounds the brand—drawing all the rebels and renegades and “creative” types to it like moths—is almost entirely a product of marketing. Aren’t rebels and renegades supposed to see through marketing? Aren’t they supposed to, you know, “Think Different?” Well, exactly.

If a business consists of three parts—product quality, strategy and brand image—Apple’s total assets are brand-heavy (just as Microsoft’s are strategy-heavy), which means consumers pay more for Apple products, not because of their innovation, but because they’re Apple products—because the company has brilliantly positioned itself as the “challenger” more successfully than any product this side of the Republican Party. Thus the huge mark-ups. BusinessWeek, for example, reports that iPods net Apple a 50 percent profit margin and that St. Steve won’t settle for less than 20 percent on any product. 

How rad is that? And how cool is it to pay a luxury tax for Apple products just because of slick branding?  About as cool as wearing designer jeans.

Posted by jim at 09:03 PM ||