Apple iPhone Marketing Mistake

January 19, 2007 · Posted in innovation, strategy 

Apple is great at marketing. The PC vs. Mac commercials are viral video favorites. Those videos have launched a new micro genre of fan made PC vs. Mac commercials. Now that is some amazing marketing, which I don’t think they quite planned. But they could have predicted. That is why I feel they are making a huge mistake in threatening legal action against people making and sharing skins that make other phones and PDAs look like the iPhone.

Not only do I think it’s a mistake to try to force people to not share these skins I think Apple should make the skins and give them away.

iPhone Skin

Here is my thinking on this. The graphics on the screen aren’t what makes the iPhone cool, its what the iPhone does, its the functionality that makes an iPhone worth buying. So Apple could have a great viral marketing campaign by saying, “For all you people with other devices you can imagine what its like to have the real thing.” And Apple could poke fun at copy cats saying, “You can look like an iPhone, but to do what an iPhone does, you have to get an iPhone.” Apple could even give away removable stickers or possibly even sell phone carrying cases that make other phones look like an iPhone. The entire message, only an iPhone will do.

This type of creative marketing and humor isn’t beyond Apple, I would almost expect it from them. So why did the lawyers make such a big mess of what could have been a huge marketing opportunity? Apple doesn’t understand software. Apple has never understood software. Apple is a hardware company. Apple could have released MacOS for PCs in the 1980’s and killed Windows before it started but Apple didn’t want to “lose the high profit margins of their hardware.” Software costs nothing after the initial development, its infinite profit margin. But Apple has never understood software.

While I was at Apple they had a system for selling off internally developed software. Apple’s internal information systems department created amazing software, things that were a decade ahead of anything else on the market. Of course all of this ran on Macs. The single largest reason Apple never caught on in the business computing market was the lack of business software. But Apple had one of the best software development groups in the world cranking out ground breaking innovative software that was field tested in a huge business, Apple itself. And all of this ran on Macs.

Someone at Apple realized that Apple didn’t understand software so the practice at the time was to sell the software to another company to market. This is actually a very smart move for an internal IT group. The product gets wider support and now its a revenue source so it will be supported and enhanced. This was the thinking of Apple at the time, and it was smart. But Apple never made much use of all this great software as a marketing tool. Things they didn’t sell off to a third party to market they just let die. If they had given this software away they would have doubled the sales of their hardware. If they had sold the software themselves they would have had “insanely great” profits.

The simple fact that Apple is a hardware company has held them back from success. Their marketing people seem to understand the concept of selling an experience but the business people don’t get it. People don’t buy hardware, they buy solutions. Apple seemed to finally understand with iTunes. Hopefully the hardware holdouts will get it and Apple will reach its true potential.