Aug 10

The frenzy that never ends

It’s hard to say exactly when Apple started stirring up such passions.

For practical purposes, let’s say it started with the launch of Macintosh — that perfect blend of revolutionary technology and revolutionary marketing. In more innocent times, a good media frenzy could work 100% to Apple’s advantage. But things change.

In the mid 90s, with Apple just a step ahead of the grim reaper, the frenzy was relentlessly negative. Journalists were eager to cover the tragic end of a great American success story. Even when iMac showed Apple still had a spark of life, no story was complete without a mention of the “beleaguered” Apple.

Finally losing the baggage, Apple entered a golden age of positive coverage, and profited greatly from it. The hype grew geometrically, launch after launch. Because with each product — iPod and iPhone — the company found a way to exceed expectations.

But when exceeding expectations becomes the expectation, things get a little sticky.

iPad benefited from what might have been the biggest pre-launch frenzy ever — yet on launch day, it was received with a thud. Why? Back on that very first day, it simply wasn’t surprising enough. “Just an oversized iPod touch,” they said. If you got caught up in the negative frenzy, it was easy to believe this would be Apple’s most embarrassing failure.

But as happens with all frenzies, ultimately they die down. Then reason returns, and people seem to forget the conclusions they drew so hastily. Only on occasion do we learn from the experience.

Take iPhone 4. Again, Apple was the beneficiary of an unprecedented build-up to the launch. This time, the launch went well. But the antenna issue, discovered within days, became the catalyst for an even bigger frenzy. Surely this was the most horrifying Apple failure of all — except that now we hear sales and customer satisfaction ratings for iPhone 4 are through the roof, and most analysts predict Apple will soar even higher in 2011.

Of  course, this just sets the stage for the next feeding frenzy — based on the news that Android has for the first time outsold iPhones in the U.S. Obviously this is the beginning of the end for iPhone. Time to abandon ship.

Well, you might want to take stock of the post-frenzy reality before you go selling your vast holdings in AAPL. Because the obvious truth is this:

The phone market is vast. Almost incomprehensibly vast. Neither Apple nor any analyst believes Apple can own this category as it owns the music player category. Android isn’t going away. BlackBerry isn’t going away. Microsoft isn’t— oh, sorry, where’d they go?

iPhone is a single product made by a single company, available on a single network. Android is an OS featured in umpteen phones from a variety of manufacturers across all networks. Apple will likely change this in the next year or so.

Most important, though, is how happy the customers are. 21% of the Android owners say their next phone will be an iPhone, while only 6% of the iPhone owners plan to switch to Android. So if I were a betting man, I’d say iPhone will continue to own a big chunk of the smartphone market for some time to come — and 100% of the frenzy market.

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  • Liebman

    Great post, as usual, Mr. Segall. Sorry to stray off topic, but is the Frenzy eye related to the Observatory eye? Do you have a cornea fetish?

  • daniel

    we don’t hear too often the mention that iPhone is a singular device that is just as strong or stonger than an entire product line from the likes of Nokia, Blackberry, Motorola…nice to see you make that point…also, the iPhone device is being compared to Android OS when marketshare is considered, switch the roles and see how the Droids stack up against iOS devices.

  • ChuckO

    The other thing I think we’ll find about the smartphone market is (especially for non-iPhones) they won’t have the kind of lock-in Apple’s had with the iPod. People who buy Android today will easily jump ship a year or two from now when various technologies converge and the iPhone can run on multiple carriers in the US.

  • BDD

    Great post, Ken, and great point, ChuckO. I’d even go as far as to declare “Now is the time” for Apple to set the iPhone free. Just like when the iPod exploded when they released Windows versions, so will the iPhone when one can use any carrier they wish…

  • On the other side of the “passion” spectrum, Apple has always been the object of deliberate Microsoft-trained IT contempt, which was usually limited to condescension and neglect, at least at the places I worked. Relatively little awareness of this trickled out into the real world until after Windows XP created a worldwide market for malware and Vista followed it up with a veritable smoking gun on a bloody foot. How else to respond to the relative excellence of Apple products than with negative marketing, aided by a segment of journalists and amateur bloggers who found it easier to criticize a subject than to learn about it?

    It wasn’t until the latter-year success of the iPod, the iPhone and the rise in popularity of Macintosh iMacs and laptops (as alternatives for tired, beaten Windows refugees) that a substantial portion of the tech-writing community found lucrative attention whenever they amped up the trash-talk. The iPad, a category-evading device, is merely more popular grist for that mill.

    Just my opinion.