Apple’s Dirty Little iPhone Secret

Mac sales are off 3%. What will Apple do???

It’s not just the Mac, Microsoft just had their first quarterly decrease (6%) since they went public 23 years ago, blaming it on slow PC sales.

It’s the recession. It’s the economy. People aren’t buying computers anymore.

<PAUSE>

Let me take you away from Katie, Brian (etc) and the TV news for a minute, OK?

The missing puzzle piece

What did I leave out of that picture? A couple of things.

First, let’s look at Apple.

If you ignore the 3% downturn in Mac sales, there was a bit of good news from Cupertino recently.

First, the one billionth iPhone application was downloaded from Apple’s iPhone AppStore this week.

Look hard at that number. ONE BILLION mobile applications.

Even if 500,000,000 of these downloads are the iFart application, that’s still a really big number. In fact it’s enough to provide one iPhone app for every human being in the United States, Canada and Mexico combined.

If you use the one billion number, that’s one iPhone app for everyone in the United States, Canada, Mexico and Europe, combined.

Next, despite the 3% drop in Mac sales, the first quarter of 2009 (January 1 through March 31) was Apple’s best month EVER.

Best ever for revenue, best ever for profit. Best Ever. Not in the last few years. For the company’s entire lifetime.

What’d I leave out?

On April 20th, CNet’s article about Apple’s upcoming quarterly financial report was titled “Apple’s Recession report card arrives Wednesday“.

Seems like they’d already decided what was gonna happen.

When Apple announced results, it indicated that iPod sales were up 3% vs. the first quarter of 2008 (1Q2008) so that was kinda good news, but Mac sales were down 3%. Uh oh.

One more thing. Almost forgot… iPhone sales were up 123%.

Someone apparently forgot to send a memo to Apple about the “economic gloom”.

If you dig around a little, you find stories talking about the decline of the computer market and how Mac sales are off 3%, thus illustrating that it isn’t just limited to the Windows-based PC and it’s all because of the state of the economy.

But they forget one little thing: Left out of the sales numbers were 3.79 million Macs.

Shhh. It’s Apple’s dirty little secret

3.79 million iPhones, that is.

See, the iPhone is a small form factor Mac, not just a phone. It’s a computer.

Ask 100 people who sell mobile phones if the iPhone is their competitor and they will all likely say yes. Ask 100 people who sell computers if the iPhone is their competitor and I’ll wager that almost none of them will say yes. They’re dead wrong.

Meanwhile, Apple understands that the job of making a sale is to get a customer, not the reverse. They know that once you buy a Mac, you’re likely to be hooked.

The iPhone lowers the bar and entry objections by providing a nifty computer with applications that you can easily install. Oh and it just happens to be a phone too.

They teach you – in fact, prepare you – for owning a Mac using their phone.

They teach you the same thing using the iPod Touch, which is basically an iPhone without the cell phone, camera and microphone.

Job of a sale: To get a customer

Ask anyone you know who has an iPhone. I’ll bet none of them use it just as a phone.

Ask them if they’ve bought their first Mac yet. If they haven’t, do they say they’re thinking about it? I’ll bet you get a “Yes” to one of those questions.

With Mac’s now having dedicated retail space in Best Buy stores nationwide, that purchase will become easier.

Steve Jobs has to be laughing.

What about you?

Your job is to figure out how to get a customer. You know that once you get them to be your customer, they’ll love what you do so much that they’ll never leave.

All you have to do is get them into the family. It’s OK to start with baby steps like Apple does.

How to provoke a sea change

Seldom do I ask you to read extensive articles about large corporations. Usually, those corporations are the ones giving me blog post seedlings through their often inane behavior. 

Today is no different, but the behavior is.

Our guest post today comes from Wired Magazine, which talks about the impact of Ray Ozzie and his vision on processes and the future of Microsoft.

I’ll warn you right now. It’s a long article, but worth the time. 

There are a ton of takeaways from it, many of which are also advice or suggestions you’ve heard from me or read elsewhere. What’s important is that when influential parts of large companies like Microsoft start to realize the truth in these things, it’s hard not to ask who will be next. 

Perhaps your competition. 

On another level, it’s more provocational. 

Are you asking yourself and your staff tough, might-makeover-the-business questions?

Even if you’re afraid of the answers, you’d better be asking the questions every now and then.

Find and fight the fire before the customer does

In a recent email to senior Microsoft staff, Bill Gates had rather unflattering comments about a pre-release download and install process for Windows Moviemaker.

Every one of us can relate, right?

As for the message, Gates smiled and said, “There’s not a day that I don’t send a piece of e-mail … like that piece of e-mail. That’s my job.”

Exactly.

No matter how high up you are, one of your jobs is to find the problems before the customer does.

And yes, I’m sure someone will wonder aloud where he was on Microsoft Bob, or on Access 1.0, or on <whatever>. Perhaps it’s best to wonder what it would have been like otherwise:)

In the software business, we have a term called “eating our own dogfood”, which means using the software you sell to clients. Whenever possible, it’s a valuable effort because you look at things differently as an end user than as a programmer.

Eating your own dogfood can and should extend far beyond the software business.

No matter what line of work you’re in, you can find a way to…

  • Secret shop your store(s).
  • See that your friends and family have to deal with your business and your products, anonymously if at all possible.
  • Watch someone try to use your website, or listen as they call your business for help, to make a purchase, obtain service and get advice.

Find the forest fire smoldering inside your business before the client does.

Are you paying attention to your competition?

Earlier this week, the long-awaited Firefox 3 web browser shipped.

Last Wednesday, a cake from their competitor – the Microsoft Internet Explorer team – arrived at the headquarters of the Firefox development team to congratulate them for releasing their new version.

Obviously, someone at Microsoft is paying attention to their competition.

Do you?

I don’t mean to suggest that you should mimic their every move, becoming the Burger King to their McDonald’s.

On the other hand, watching them and the rest of your market is a necessary effort. And, as noted above, it’s ok to have a little fun with them once in a while.

Not long ago, we talked about how independent coffee shops could keep an eye on MyStarbucksIdea.com so that they know how consumers feel about Starbucks AND their competition.

How do you keep an eye on your competition? I’d be interested to hear about it.

Microsoft’s “apology” to XBox owner, a good lesson

Ring of Death
photo credit: Spoon Monkey

As I’ve mentioned before, how you recover from a stumble is sometimes more indicative of a good business than the fact that you stumbled.

Today’s guest post is really just a news story about a now-happy guy whose treasured XBox360 had been ruined by someone who thought they were just being helpful, but there’s a great example to motivate you to take care of the clients you mess around.

Kudos to Microsoft for how they recovered from this stumble.

The next time you have to apologize to a client…think about this one. Valuable to that client, but not expensive in terms of hard dollars. Sometimes, a client just wants an apology.

No doubt, this is something that he will remember for a very long time.

Somoene, somewhere in Microsoft customer service went above and beyond in a very smart way.