“No one ever got fired for buying an IBM.”
That phrase was popular when IBM, in conjunction with Microsoft, was becoming the standard business workstation in the mid-to-late 80’s. Deciding to purchase products from the industry leader was the safe bet, the one with the least risk. This was the underlying psychology of corporate IT buyers and it served them well for many years.
In our conversations with consumers, we find a similar sentiment toward Apple products. Consumers who are purchasing smartphones or tablets for the first time are tending to go with Apple because they are the safe bet in their minds. Other companies may have competitive products with price or feature advantages, but often come with greater risks.
Many consumers we interview have heard mixed feedback or negative stories from Android customers about devices acting up after 6-8 months, containing buggy apps or malware, and getting terrible customer support from their carrier or manufacturer. The reverse is true for first time smartphone and tablet consumers who note the overwhelming amount of positive feedback they hear from people who own iPhones and/or iPads.
It is essential to understand that consumers are very savvy, they do actually shop around, and do research both online and with friends and family. When they constantly hear positive stories and how much those they know love their iPhones, it becomes pretty hard to not go with the safe bet. The decision is even easier now that the iPhone is on all the major US carriers besides T-mobile and rapidly becoming available on all major carriers world-wide.
It is also important to know that when we do consumer interviews and analyze consumer buying habits we are not interested in “early adopters.” Early adopters are predictable and don’t always represent the mass consumer market. We focus more on those who are not in the tech elite, but are practical and desire technology without the hassle of having to manage technology.
This is fundamentally why I believe the analogy of IBM being the safe bet for business rings true with consumers and Apple for the time being. As I stated in my Dear Industry piece last week, this market will evolve and mature quite quickly. I do not expect any one single platform or piece of hardware to control the majority of market share. However, for the time being, a very large portion of consumers are choosing Apple products. The iPhone is the single best-selling phone on the market by far. The iPad is forecast to continue to control over 70% of tablet market share in 2012 and still hold healthy market share in 2013.
Both the smartphone category and the tablet category are in a growth phase. The global smartphone category is projected to grow at 49.2% over the next 5 years and tablets are projected to grow at 200% in 2012. When you look at the numbers and the expansive and rapidly growing TAM for these products going forward you do not need to be the market leader by any means to still sell a significant amount of devices. This is why we need a more informed conversation on market share and include profit share as a part of that discussion.
For many consumers, I am willing to bet, their first smartphone and their first tablet will be an iPhone and a iPad … and for the same reason that an IBM was the business user’s first computer: it’s the safer bet.
Lastly to further make my point, have you ever seen an Apple retail store anywhere close to empty?
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Ben…true and well said.
The one difference is that Apple is a consumer brand in the truest sense of the word, whether the product is used at work or purchased by the company.
Customers love Apple products. Pure and simple.
That was never true of IBM and certainly never true of Microsoft.
This difference is not subtle.
Yes that is a good point. In fact it leads me to think that Apple is even more powerful than IBM because in this case consumers are CHOOSING Apple where employees were forced to use IBM and or Windows based machines by their IT dept.
IBM and Windows helped standardize and mature the personal computer market by mandate where as Apple is becoming the standard driving both smartphones and tablets to maturity by consumer choice.
Pretty profound implications for the future using that logic.
Thanks for the comment.
This actually ties to something that I think and consult and blog on a lot.
The huge change that we are in the midst of is that change is being driven not by the companies and technology platforms, but from the mass market and behavioral and cultural shift in how we think.
Control and trending starts in the market itself.
And yes…that is why Apple is ever so powerful right now. This is a case study in culture and brand evolution.
I’d love to read your blog. Where is it located?
http://arnoldwaldstein.com
Enjoy!
Thanks I have bookmarked it. I really like how you have Wine added to your blog. That is awesome!
IBM = I Bought Macintosh
Having worked in, and sold to, the IT (then called “MIS”) industry since the 1970s, it gladdens me to see these astute comments appearing lately, referencing the real reason the PC platform gained such a foothold. People with no such sense of history tend to think it has to do with technical issues, Apple’s stumbling, or other less-relevant factors. The reality is that “nobody ever got fired for buying IBM” was a very real, perceived, and acknowledged phenomenon back then, and it was in consideration of this phenomenon that Microsoft conceived, developed, and marketed its products. This was its marketing masterstroke.
In this all-important sense it was Bill Gates and co. who were the master marketers, not Steve Jobs as is is popularly perceived. Marketing is about selling product en masse and capturing a market, not about making presentations and wowing people. Jobs was much more in love with technology for technology’s sake, for its intrinsic beauty and its ability to effect beneficial change. Especially in Apple’s initial stages, he couldn’t have cared much less about such things as aligning with IBM for strategic marketing advantage.
But I have to disagree with the notion that this “won’t get fired” sentiment toward IBM (and by extension, Microsoft) has an analogue with the current customer enthusiasm for Apple. There’s a big difference between responding to the FUD expertly generated by a corporation like IBM when your job and career are on the line, or simply accepting whatever decision your IT department has foisted upon you, and risking maybe $200 and an early termination fee on a phone.
Corporate contracts are extremely large and difficult to break. In contrast, the consumer’s decision is easily rescinded. By personality, the consumer population is also much more fickle, tending to exhibit far less inertia than does the average corporation. Could you imagine a mainframe-using corporation switching between IBM and another vendor as easily as individuals switch between iOS and Android, or Mac and PC?
There’s a reason IBM’s System z has garnered a 90-95% share in the mainframe market. That isn’t going to happen to Apple. Apple doesn’t care, nor should it. Nor should we.
That is a really great and quality comment. Exactly the kind of discussion I want to have here on our site.
I don’t disagree with anything you said and in fact I didn’t mean Apple becoming IBM in a bad way. I look at this more from a historical standpoint about how the IBM and the Microsoft ecosystem helped mature the market for personal computing.
By mature I mean led it to the point where people knew what it was and had their first experience with it. The mass market experienced their first computer as a windows machine. Only us cool non sheep grew up with Macs 🙂
Similarly my analogy is stating that the iPhone and in many cases the iPad will be the mass markets first smartphone and tablet. The distinction you and other commenter have made, which is a good one, is that consumers are choosing the iPhone and iPad where in the business market people were forced to use Windows.
So my over arching point was the iPhone and the iPad are like the IBM in the way that they are the products that will standardize the category and lead it to maturity.
There is so much more to be said on this matter then in a single column. Stay tuned.
GREAT article! People buy Apple products based on a conscious, rational decision, and because they just want to.
Apple is a rising Giant because one difference is that Apple is a consumer brand in the truest sense of the word, whether the product is used at work or purchased by the company.
Customers love Apple products. Pure and simple.
That was never true of IBM and certainly never true of Microsoft.
This difference is not subtle.
“That was never true of Microsoft.”
I’ve seen quite a few people who do love Microsoft products.
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