Is Apple starting to rot or just age gracefully?
Growing up, my grandparents had a match pair of apple head dolls next to their fireplace. I always thought the wizened heads were amazing. When I tried to replicate the process of carving and then drying the apple the result was an ant infested rotten apple. Which path is Apple headed down and can they recover?
Our tracking of Social Capital shows that the consumer market is falling out of love with Apple. Companies rely on the release of new products to boost their Social Capital with consumers as all customers eventually fall out of love with their experiences (Harleys and a good single malt excluded). What’s troublesome as you can see in the graph below, is that Apple’s new products have not succeeded in providing that critical boost, especially prior to the crucial holiday season.
But didn’t Apple just launch the iPhone 5? Shouldn’t that be driving the market mad with desire? Actually, the biggest impact of the iPhone 5 launch was to drive buzz around the iPhone 4S as you can see from the two graphs below.
Not only did the iPhone have a poor start (worst in years for an iPhone) but it dropped after the initial response. It has recovered but isn’t delighting consumers at the level expected.
Buzz levels for the iPhone 4S are actually on par with the iPhone 5. Historically the buzz (and corresponding demand levels) for older iPhones have dropped in the face of new launches. The iPhone 4S hasn’t. Neither did the iPad 2 after the new iPad was released earlier this year. In fact, buzz for the iPad 2 increased and outpaced the new iPad.
Only now is the iPad 3 reaching it’s full potential, after the iPad 2 inventory has been depleted. For both the iPhone 5 and the new iPad, when a lower priced Apple alternative existed on the market, consumers continued to flock to the older product, showing the price sensitivity of the broad market as compared to the typical price insensitivity of Apple’s core fans. In the case of the iPad 3 and now the iPhone 5, reviews went down after launch, something that hasn’t happened to an Apple product in YEARS!
Jeffrey
October 12, 2012 @ 7:24 pm
“Our tracking of Social Capital shows that the consumer market is falling out of love with Apple”.
Honestly I find this research hard to believe, the main reason being you give no criteria or example of how you measure “Social Capital”.. Honestly John it reads more like a “hit piece” ? Would be interested in how you measure your results to actually make this article valid in some sense.. Thank You. Jeffrey Freeds.
John Feland
October 12, 2012 @ 7:34 pm
Jeffrey, thanks for your comment. It’s not a hit piece. This reply is being typed on a Mac while reading the New York Times on an iPad and if AT&T had better coverage in Silicon Valley, I’d still have an iPhone. The metrics here are explained in prior posts where I define social capital as it relates to user experiences. The metrics are based on my PhD at Stanford University where I developed a set of metrics connecting good design to good business, something Apple has embodied for years. This piece was written in response to a trend we’ve been seeing in Argus Insights where recent Apple product launches have not been producing as much Social Capital for Apple as past launches. We’ve show our metrics of Social Capital to be predictive of future sales volumes and you can see in past blog posts where, using metrics of Social Capital, we have predicted sales volume surprises for both the iPhone and iPad products lines for the past four quarters. I appreciate your skepticism and would love to provide you with some of our case studies and even a copy of my dissertation if your interested in learning more (or in the case of the dissertation, looking for some night reading to speed the arrival of the sandman.)
Thank you again for your question!
Cheers,
John
Jeffrey
October 13, 2012 @ 5:06 pm
John thank you for your explanation, its appreciated..
Jeffrey
October 13, 2012 @ 5:29 pm
John I forgot to say “yes please” can you possibly email me case studies and your dissertation. That would be fabulous. Best.. Jeffrey
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