Gerhard Rasocha - Unplugged

Apple just posted a record revenue of $7.1 billion and record net quarterly profit of $1.0 billion for the last quarter of calendar year 2006. The company showed 28 percent sales growth in Macs and 50 percent growth in iPods over the year-ago quarter. Do you now of any other consumer electronics/computer vendor enjoying such growth rates these days ?

So what’s their special secret ? Apple are not really inventing new product categories or at least they haven’t in a while. They rather take an existing market segment where something needs to be fixed. Then they design a stylish product with an emphasis on usability/simplicity for it that integrates well with other components (computers, the internet, …). So using these products is easy and fun. They are selling something that makes people feel good (=cool, sexy, happy, …). Something to be proud of and to make them recommend it to others.

Want an example ? So tell me, when was the last time you made an attractive young woman sing a love song about one of your products ? Watch this video and you will know what I mean.

Apple develop products from top down. Design, usability and target price are first, then the engineers have to find ways to built the product around those requirements. That’s not how tech companies usually work. They often go the other way around - engineers go in with things they have done or things that would be worth doing. When marketing comes in with requirements, there are already many things set in stone. Everybody compromises somewhere in the middle. The result - feature rich products with bad design and high levels of complexity. Basically, not so cool products !

Now compare this to Apple: sexy, easy to use, great experience, something thats fun to use and to be proud of - no matter if its iPod Shuffle, iPhone, Apple TV, iMacs or MacBooks. That’s all there is to it. (though I guess having Steve Jobs on board won’t hurt either)

For those who have not seen it. The new iPod Shuffle is a cute little MP3 player that holds 240 songs and lets you you listen to your music for up to 12 continuous hours. Apple just released a cool new commercial for the Shuffle.
Check out the video (mov/QuickTime).

The music in this one is Who’s Gonna Sing? by the Prototypes- cool video, great music. Combine emotions with simple Mac/PC connectivity, great usability and make it easy and affordable to buy music through the internet (iTunes).
Its as simple as that.

Does anyone still wonder why Apple holds 60-70% market share for portable music players ? Its all about selling “experiences”.

I took this photo during my summer vacation earlier this year. It shows the entrance to a jewelery shop in Bad Ischl, Austria (a very nice and quite town and a great vacation area by the way - check it yourself).

For all non-german speaking folks, it says AIR CONDITIONED - OPEN on the front door. I guess you won’t find many better sales arguments to get customers into your shop at plus 35 celcius in july.
Makes you almost wonder what they’ll put up in the winter season. Any guesses ?

Bestselling author Seth Godin wrote a little masterpiece on “small is the new big” a while ago. I fully support his view. After years of “big killing small” (supermarkets vs. grocery stores, appearal chains vs. small shops), we are about to enter a golden age for small business.

Big used to matter. Big meant economies of scale. There was a good reason for this. Value was added in ways that big organizations were good at. Value was added with efficient manufacturing, widespread distribution and very large R&D staffs. Value came from hundreds of operators standing by and from nine-figure TV ad budgets. Value came from a huge sales force.

And then small happened. (more…)