3 Key Factors That Led to Apple Becoming the World's First Trillion-Dollar Company
Apple has never competed on price, yet it is the brand preferred by people across the wealth spectrum.
There have been many tech companies to emerge in the past several decades; perhaps none of which has been more influential than Apple. As the news broke that Apple had become the world's first trillion-dollar company, all arguments against this were essentially put to rest.
So, looking back at Apple's illustrious 40+ years history, there are certainly a number of critical components that attributed to their superior positioning and success. It's quite fascinating to think that a tiny company that started in a garage is now the highest valued company in human history.
These three factors led to this colossal milestone.
1. Breaking down the barriers of customer segments.
An interesting observation of the United States and similar countries is that people on both extremes of the social class spectrum carry the same cell phone. That phone is, of course, the iPhone.
Looking past some of the common pressures of consumerism, much of Apple becoming a worldwide phenomenon has to do with the way they market their products; both in the past and today. Most prominently, Apple's view of their target customers was never restricted by demographic, certain characteristics or anything else that divides the market. Simply put, their target customer is everyone. This is why the term "user-friendliness" is one of the defining traits of each of Apple's products.
Going further, their mainstream ads and marketing content seldom uses fancy tech jargon about the product specs. Their messaging is meant to be understood by people of all ages and backgrounds. They focus on features that immediately affect the average user, such as the camera resolution, screen display, storage space, fingerprint identification, etc.
By not breaking their customers up into strictly defined segments, Apple's marketing has been appealing to generations of users, which has led to company's stock rising 15,000 percent since the turn of the millennium.
2. Creating a brand culture.
Apple has a devoted following unlike any other brand in the world. Apple has become much more than just a brand. A long history of producing high quality products that everyone can use has spawned a brand culture that has become so ingrained in everyday life that many faithful Apple consumers wouldn't deviate from the products in a million years.
This all started back in the early 1980's, right when the concept of having a home computer was just beginning to gain traction. Steve Jobs donated 9,000 Apple computers to California schools -- which many people thought was crazy. In addition to the tax benefits, the marketing strategy behind this was pure genius. Jobs' goal was to leverage his "Kids Can't Wait" program to familiarize school children with Apple products' usability before they got their own computer. This, in many ways, was the origin of Apple's brand culture.
Fast forward to now. There are countless consumers out there who were raised using these computers in school. They won't use anything else, no matter what the technical aspects are.
3. Never fighting price wars.
Many brands assume that price wars are just a part of industry competition. This was never the case with Apple. Throughout the years, they stuck to their pricing models despite being significantly higher than competitors'.
For example, let's take Apple's MacBook Pro 13 and compare it to the HP's Spectre 13 (which are some of the latest models of each brand, respectively). While the specs are similar and each model has their own unique set of pros and cons, the MacBook Pro costs about $800 more.
Why is this? Apple simply does not see other brands in their market as competition.
Instead of trying to entice customers with low prices and win a "race to the bottom," Apple blocked out the noise of what their competitors were doing and focused on promoting their unique value proposition -- beautiful design and a seamless customer experience right out of the box.
The last thing in the world Steve Jobs wanted to do was undervalue the product. So, the purpose of this approach was to prove why their products are superior to other products on the market and worth the higher price.
This practice has not only led to a strong brand following, it has worked to shape the way new tech products are created. Perhaps the clearest proof of this market superiority deals with cell phones. Prior to the original launch of the iPhone in 2007, cell phones came in all shapes and sizes. The diversity in design between brands was amazing. However, in the years since the iPhone came on the market most cell phones, regardless of brand, have a similar look. In turn, the iPhone has become the gold standard for new products on the market.
The key takeaway from this practice?
Don't always try to outdo your competitors with lower price points and bargains. Instead, put your efforts into showing the masses why your products and customer experience are superior. More importantly, have the goods to back it up. In the long run, it will pay off.
Apple has changed much about how we live our day-to-day lives. Most importantly, it virtually changed the stigma surrounding technology as a whole. For years, the general perception of new technology was that it's very complicated and tough to grasp. Apple showed the world that technology doesn't have to be this intimidating entity that only the savviest individuals can master. They proved that even the most cutting-edge products can be used by everyone, regardless of social class, level of expertise or age.
In many ways, Apple sold people on more than just awesome products. Apple they sold people on a "can-do" mindset that resulted in mass adoption.
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