Here’s a reply I used recently to an Apple fanboy just dying for an Apple car (because it would be sooo cool):
Me: “What’s your favorite car.”
Me: “How about a BMW laptop?”
What was the first thing Jobs did when he came back to Apple? FOCUS.
He was killing more products than he was making.
And now, amidst Apple car rumours, we have Carl Icahn in a one-man bozo explosion today, urging Tim Cook to get into making cars.
As autonomous driving would release drivers’ attention from the activity of driving and navigating, and perhaps even increase the time people actually want to spend inside a car, both an automobile and the services provided therein become even more strategically compelling. While Apple currently addresses this market with CarPlay, it seems logical that Apple would view the car itself as a the ultimate mobile device to which it could bring its peerless track record of marrying superior industrial design with software and services, along with its globally admired brand, and offer consumers an overall automobile experience that not only changes the world but also adds a robust vertical to the Apple ecosystem. And for Apple, the car market is more than big enough to “move the needle” significantly, even as the world’s largest company.
All great ideas, but as I’ve said in a previous blog post, it would be a deadly move, due to something called the Line Extension Trap (a term originally coined by Al Ries and Jack Trout).
That’s when a company says “Oh, our brand is so powerful, we’ll extend it to other completely unrelated products”.
As Ries says:
Bayer non-aspirin. Dial deodorant. Life Savers gum. Kleenex towels. Eveready alkaline batteries. A1 poultry sauce…
If everyone in an industry line extends their brands (as happened in the beer business) then it’s not an issue at all. The winner will be the leading brand and its line extension (Budweiser and Bud Light) regardless of what the competition does or doesn’t do. (And in the cola business, Coke and Diet Coke.)
The case against line extension is a philosophical exercise. For a brand to exist, it needs to be filed away in the mind. And where does a consumer put your brand in the mind?
If you say, “Would you like a Budweiser?” the consumer thinks “beer.” Why is this so? Because apparently the Budweiser brand is filed in a mental category called “beer.”
Or if you say, “Xerox this document,” the consumer thinks “make a copy.” The Xerox brand is apparently filed in a mental category called “copier.”
So what happened when Xerox, the copier company, introduced Xerox computers?
Nothing. And Xerox went on to lose billions of dollars.
It is not only an issue of focus, it’s also an issue of brand extension into an unrelated area. I’m no saying it won’t work. But history is not on Apple’s side in this argument.
(Oh, and yeah, there is no big-screen Apple TV on the horizon.)
I like Icahn, for odd and various reasons. But as a marketer, I would give him a fail.