5 Years Later: Apple’s Transition from David to Goliath Revisited

January 29, 2015 by Olivier Blanchard - 1 Comment

Q1 2015: Let’s take a quick glance at Apple’s remarkable market dominance:

Apple generates about $1M dollars every 2 minutes. Let that sink in. (In the time it took you to read this sentence, Apple generated about $30,000.)

Apple is sitting on enough cash to buy Twitter, LinkedIn, Yahoo, AOL, GoPro, GroupOn, Synga and Shutterfly. And even if it actually went ahead and did that, it will still have almost $50B left to spend on like… chewing gum and potato chips. (That’s a lot of chewing gum and potato chips.)

I mean… check this out:


Also, Apple is now catching up to Samsung in global smartphone sales. They’re neck in neck after Q4 2014. That’s huge.

Now let’s flashback to July 2010, when things really changed for Apple. From the vault, I give you… this:

Published July 2010

Everyone loves an underdog. We root for them. We identify with them. And for the last few decades, one of our favorite underdog brands has been Apple, and for good reason: They made computers user-friendly. They made computers fun. They made them accessible to kids and artists and creatives. They made computers cool, from the packaging to the user experience, even down to the way we shop. The Apple brand was built on the underdog premise, on a revolutionary and pioneering spirit. On being – and thinking – different. Apple went deep instead of going wide. It wasn’t interested in being the biggest, it just wanted to be the best. And that is something that resonated with millions of users worldwide.

You see, Apple didn’t build a customer base: It built itself a tribe, a nation, a religion, even. You’re either a Mac or a PC, after all. And of the two, only one has an identity, a recognizable calling card: that ubiquitous forbidden fruit that announces to the world “I don’t play by your rules. I’m a Mac.” The rest are just… well… PC. That amorphous blend of Microsoft and IBM and Dell and HP and the rest. The little gray boxes sitting on desks. Little black laptops with the blue screens and overheating batteries and obnoxiously long boot-ups. Nothing nearly as cool as the sleek works of art you see peppering coffee shop tables with their glowing little logos that say “yes, I too am one of the cool kids.”

Then Apple changed the game again by rethinking the way we consume music, media and games with iPod. And if that wasn’t enough, Apple then set their sites on reinventing the mobile phone too. And now, with iPad, Apple stands to reinvent the way we look at computing, creating and consuming content, and may in turn very well change the publishing industry forever.

Apple’s secret hasn’t just about generating envy. There was more to the brand’s appeal than designing pretty and cool. Apple didn’t become the king of brands by just being product-focused. It engineered a culture. A belief system. It became the most popular example of what a lovebrand can achieve, by making a point not to follow traditional corporate mantras of growth for the sake of growth, and of market share as a battle cry. It shifted the model. It colored outside the lines, and it made a point of inviting us all to come along and be rebels too.

Remember this?

And this?

Of course you do. We all do. These ads made Apple.

And so here’s where things get tricky: For most if not all of our adult lives, Apple has been the underdog brand. The rebel. The kid who wouldn’t sell out. Time and time again, Apple itself told us and reminded us that it was one of us. The little guy with brains and courage and the odds stacked against him. Now ponder this: What happens when the proverbial David becomes Goliath? How will Apple’s brand manage the transition from being the underdog to becoming the biggest technology company in the world?

Or rather, how is it managing that transition since, according to the BBC, Apple finally overtook Microsoft two months ago and became the biggest kid on the block?

That’s right: Apple isn’t the underdog anymore. In spite of Microsoft’s decades-long choke hold on the broad PC market, on enterprise OS licenses, digital properties like MSN, its outstanding success in the game console world with X-Box, and some activity with Windows mobile phones and Zune, Apple managed to edge them out this year, thanks to its astounding successes with iPod, iPhone, and pretty soon, iPad as well.

Now consider that Brands and cultural archetypes are often joined at the hip. Nike is the goddess of victory. Apple draws much of its contextual foundations from Judeo-Christian mythology – from its forbidden fruit logo to the David vs. Goliath narrative it injected into its marketing.  When the narrative changes, when the brand’s role shifts and archetypal points of reference dissolve, what happens to how we process emotions and attitudes towards that brand? How do we rebuild its context subconsciously?

Think about this: Apple is now bigger than Microsoft. Let that sink in for a minute. Say it out-loud:  Apple is bigger than Microsoft. What does that mean for a brand whose very identity has always been tied to being “the other” technology company?  How will public opinion shift in response to its changing role? Its new position in the market? And when the criticism starts piling up, how will Apple respond?

In the age of Social Media, where companies are expected to engage with customers, respond to attacks and manage angry users in minutes via Twitter, Facebook and other social platforms, will Apple’s notable reluctance to join the conversation and comment on attacks now come across as arrogance? Will mounting quality control problems due to its success and new requirements of scale begin to dull its once quasi-mythical luster? Will Apple become another embattled giant, much like Microsoft was when it was the one sitting on the throne?

Not that Mac fanboys will ever abandon the brand. And not that Apple will stop re-inventing how we think about technology, media, usability and devices either. Apple is the future of consumer technology, at least for the next decade. Plain and simple. That is, as long as it doesn’t forget what it felt like to be the underdog, the “other” company, the band of rebels who focused on quality instead of volume. Something to think about: It’s hard to convince consumers to “think different” when you own the market – when it’s now the other guys who think different. (I’m looking at you, SONY. Here’s your shot at a comeback.)

At any rate, all of this to say, watch what happens next. Expect Apple to find itself under attack more often. Expect more law suits, more complaints, more criticism in the press and on blogs and on the twitternets. More stories of failure and problems and concerns. Now that Apple is the king of tech, it is walking around with giant bullseye on its back – something it has never experienced before -and you can be sure that every little mistake it makes will be scrutinized and exploited for all its worth, not only by its rivals, but by anyone with a chip on their shoulder. How Apple manages their new place in the world, a world it doesn’t always play nicely with, will be interesting. Stay tuned.

And while we’re on the subject, check out this piece by BBC.com in which I am quoted saying something half-way intelligent, for once. (Sorry, that content is no longer available, apparently.)

It’s interesting to look back and see how much things have changed in just 5 years (and to see what I got right and what I got wrong). Most fascinating to me is the relative ease with which Apple managed its transition from underdog to market leader. Even without Steve Jobs, even without the David vs. Goliath narrative, even without the inspirational ads, Apple has managed to keep things going. Not every company could have pulled it off. In fact, most can’t. And to Apple’s credit, it has managed to do so in spite of criticism, of doubt, of cynicism, even… and of growing disappointment among its fans: disappointment in the quality of the products (from the iPhone 6 bending too easily to various iTunes failures), disappointment in customer service, disappointment in in-store experiences (the Genius Bar needs work), disappointment in corporate values and business practices (working conditions, tax policy, and competition shenanigans), even down to disappointment in the relative absence of new ideas (the Apple Watch isn’t exactly revolutionary, Apple Pay isn’t exactly blowing anyone away, and iCloud isn’t super exciting yet either).

It can also be argued that Microsoft Surface is far more innovative than the MacBook at this point, especially for the price. Imagine that: Microsoft actually out-designing Apple. And listening to the fading passion of former Mac fanatics, you can start to see the lines outside Apple stores in the days leading to their next release getting smaller every year. It’s right there on their faces when they talk about their iPhone… or rather when they don’t anymore.

Not that Apple does anything poorly, really. It’s just that it set the bar so high for itself… and the legend it created and the legend we created on top of it propped up the brand to impossible standards of perfection. I say perfection rather than excellence because it’s what we expect now. That’s the context in which Apple’s criticism exists. We expect and demand perfection, and anything short of that turns into disappointment.

You can choose to see these cracks as red flags or as red herrings, but the questions on most analysts’ lips right now are take a wise middle road: are we witnessing Apple’s apex? Is this the peak?  Will things ever look this good for Apple again?

It’s entirely possible that Apple might just plateau here for a while and hold on to its market dominance until its next big idea, its next big forward and upward leap. $178,000,000,000 can buy a lot of big ideas, a lot of patents. It can buy the world’s greatest innovative minds and design talent if it wants. And Apple has a tendency to be pretty good at solving problems, which is always a plus.

Or Apple could just start slipping, like so many other market leaders have before it. It isn’t immune to it and there’s a narrative there too: hot young start-up fights its way to the top of the heap and wins all the things only to lose its spark and relevance and genius once there is nothing left to conquer, nothing left to fight for. Young Arthur becomes King Arthur, and things change. Young Genghis becomes Genghis Khan, and things change.  Sooner or later, glory days fall into the realm of myth, of legend, of things that happened in the past. Before you know it, the present is just an echo of what came before it, propped up on its own fading momentum, and the future evokes only uncertainty and worry. How long can we keep this going? How long can we hold on to what we’ve built? Even Camelot fell, eventually. The Mongol empire broke apart and faded. Incumbent kingdoms grow complacent and bloated, and companies do too. It would have eventually happened to Alexander’s empire as well, had he not died so young.

There comes a point in any victor’s journey when defending the status quo and markets and trade routes and borders becomes the job. You start building walls instead of ships. When that happens, innovation and boldness take a back seat. Managing an empire isn’t the same thing as laying siege to a formidable enemy. Heroes aren’t made to sit on thrones, holding court, letting lawyers and accountants run the show. That isn’t what we expect them to do. Heroes charge into battle. Heroes are brave and resourceful and loyal. Heroes inspire. What happens to heroes when all the battles have been won? What happens when all that’s left is worship at the cost of inspiration? What happens when a brand becomes your parents’ brand more than your own, when owning their products feels more like a tax than an adventure?

So my question is this: once Apple runs out of giants to slay, out of new horizons to explore, out of battles to win, how will it keep the flame alive? How will it continue to make us care enough to spend 20%-100% more on their products than the next brilliant upstart with equally cool ideas, equally beautiful design and perhaps better service? We aren’t there yet (read this) but… if you open your eyes and look for it, you can start to see it. Not the proverbial writing on the wall per se, but something. A shadow. A wind. A whisper. The memory of one of the oldest stories in the world: the hero’s journey coming to its sad, inevitable end.


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