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.”
Fanboy: “BMW”
Me: “How about a BMW laptop?”
Fanboy: (silence)
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.
3 replies on “How about a BMW laptop?”
Good point that there is still no Apple TV. TVs last a long time and any “smart” functionality you release is long obsolete before the product is even launched. There’s not a single smart TV interface that can match what the leading STB products like Apple TV, Chrome, Amazon Fire can do much less be better.
Alex, as I’ve read about Apple’s potential foray into the auto business for a while, I thought it was a pipe dream. Having spent decades in the auto business and now in the auto finance arena, it just didn’t seem feasible.
Certainly brand extension plays a key role.
But I think Apple really has a shot, and it has little to do with customer confidence in Apple products.
One of my first reasons for thinking Apple couldn’t succeed was because they’re not a car company and the infrastructure to build a car is pretty extensive. Then Tesla came to mind. Okay, a start-up car company can assemble the infrastructure and then design and build a quality vehicle.
You’ve been in LA and the SF Bay area. The traffic is atrocious. One of the founders of Uber preaches about unused capacity. How much unused capacity in the form of human brainpower is wasted crawling through traffic?
Free that unused mental capacity by removing the need to press a gas and brake pedal for an hour or two and you’ve provided a tremendous service. Autonomous cars make more sense than mass transportation for a variety of reasons that I won’t get into here.
What exists is an untapped market ripe for explosion. The key to this market is NOT the vehicle itself but the technology to “navigate and aviate,” to quote a phrase from my pilot days.
The vehicle needs to be aware of where it’s at, the surrounding traffic, be able to make navigation decisions based on mega-data, perambulate itself and then allow the occupant to assume control in rural or non-controlled areas, such as a company parking lot.
This is the high-tech arena, and it’s NOT an area where the auto industry excels.
Will Apple build a car? Maybe, maybe not. Will they build infrastructure and systems to support an autonomous car? Looks probable–it certainly looks like they’re going after it!
The technology required to support autonomous vehicles is considerable. It’s going to take deep pockets to develop and lots of really smart guys to write a whole bunch of code. Neither of these commodities are in abundance in the auto business (yet).
Apple has really deep pockets and really smart guys who can develop really cool technology. These are a tremendous advantage in capturing the market of autonomous cars.
Another note, Apple folks live and breathe the problem that autonomous cars solve. Detroit traffic is a snoozer in comparison. Who knows the market and its problems better? Who can better identify the problem and develop a solution to it?
Ford launched a Silicon Valley center, and they’ve been talking about the autonomous car for a while. Maybe they do get it, and they’ve certainly been working on integrating Apple and Microsoft technologies.
Don’t count out Apple. They’re better poised than most pundits give them credit for to address and solve this problem.
The lack of focus will kill them ultimately as a company. I think it’s a terrible idea.
Tesla was formed by software engineers and they had a hell of a time making the transition into cars. As you know, there’s a whole different type of thinking for cars.
If it was a completely separate company, then, sure, maybe. But not as an Apple car. I just don’t see it working.
Apple’s biggest problem right now is its size. It’s getting too big itself to continue to maintain its focus. And this will only make it worse.