Think different — for 50 years

By Christina Pazaniz Harvard Staff Writer | Harvard Gazette

Scholars in management, branding, marketing, and history explore Apple’s transformation of the industry, our relationship with technology — and all the way to each other.

On April Fool’s Day 1976, two college dropouts, Steve Wozniak and Steve Jobs, and a friend, Ronald G. Wayne founded the company out of the garage of Jobs’ parents’ home in Los Altos, a small town in Silicon Valley.

For the cheeky price of $666.66 (liked by Wozniak number of iterations), buyers could get what they called the Apple-1, a “Woz”-engineered, personal computer consisting of a bare circuit board with an 8-bit microprocessor and 4K RAM — monitor, keyboard and power supply sold separately.

The Apple-1 was only capable of running rudimentary programs and games. Two hundred were made.

Pushing a product that few Americans were even aware of may have seemed foolish. But 50 years later, Apple is one of the most popular and iconic consumer brands and, with a $3.8 trillion valuation, one of the most successful companies in the world.

In this edited reflection, Harvard analysts explain how Apple has transformed the personal computing, music and communications industries. It has also revolutionized marketing and advertising, industrial and product design and retail, and helped shift our relationship to technology – and arguably to each other.

Our experts include: David B. YoffeyBaker Foundation Professor, Max and Doris Starr Professor of International Business Administration, Emeritus; Mark EdinoffAssistant Professor of History of Science; And Jill Avery, Senior Lecturer in Business Administration and C Roland Christensen Distinguished Management Educator.

---

He invented three industries

Yofi: I would place Apple alongside IBM, Ford, and General Electric as one of the most important American companies to emerge during its explosive growth period because of the impact they have had on American life and the way American business is conducted.

When I think about Apple’s contribution, I begin to think that they fundamentally invented three new industries, all of which have had a huge impact on mankind. The first is the personal computer. The Apple II was really the first real personal computer.

The second is what they did with the iPod, which was basically a redesign of the entire music industry.

And the third is the iPhone, which has become the single most successful consumer electronic product in the history of the world by almost any definition. It revolutionized personal communication.

So, at a very basic level, Apple has revolutionized the way we live, in addition to becoming one of the most successful companies in the history of the world.

A user story

Aidinoff: As a historian of technology, I’d say they created users for these things.

They taught people that they want and can use things this way, that we can take a computer, which is a tool to do advanced math, and they taught us that we can carry it in our pocket with our phone, recommend music.

So, I think of it as a user story as much as a they-created-category story.

secret sauce

Yoffie: This was part of Steve Jobs’ genius — his ability to find products that people wanted, even if they didn’t know they needed it.

It was not clear in the history of computers that you would have a graphical user interface and a mouse. It wasn’t obvious to people that they wanted to have all their music on a small, single device.

Likewise with the iPhone, no one really believed you could make this multitouch, Internet-access device and make it so functional until Steve was able to demonstrate the power of what it could deliver. It has been their secret sauce.

A computer is what changes

Aidinoff: What Apple does is fundamentally change what computers are. The idea that a computer is something I’m going to walk around with a few thousand times more computers in my pocket than the Apollo project, is something that Apple does through a whole bunch of technological innovations along the way, but by changing the cultural expectations of what a computer is, teaching users how to use computers in different ways.

There are individual pieces of technology that people will give Apple credit for, things that are really exciting in terms of chip design or implementing a graphical user interface, but it’s the way they package it together that matters.

Product as hero

every: Apple is one of the pre-eminent examples of a company that does incredible branding, brand storytelling and marketing.

They started with an underdog brand biography. They pitted themselves against everyone else, as the little guy, as the different guy, coming into the market to take on the long-reigning behemoths.

They talk about their products as heroes. They talk about the functionality and usability of their products, but they don’t just sell functional value. They are selling the emotional value of consumers interacting with their product. They are selling what we call “ego-expressive” or “identity value”—that Apple products are for people who are different, who are more creative, who think differently.

This means that when someone uses an Apple product, it feels different than when they use a PC or another brand of product. This makes them more creative, different and able to think differently than others. Users believe Apple’s story. They buy into it.

Man it’s sticky

Aidinoff: There’s a Stanford historian who traces how Apple, in particular, took the left-wing hippie counterculture and commercialized it, and made a computer resonate with that cultural impulse and “stick it to the people,” pursuing individualism.

It is difficult to exaggerate from our present the extent to which computers were viewed as computing devices for the military. You literally bombed people’s computer centers in the 60s as a protest against The Man. And so, the idea that listening to Nirvana on a computer would be a cool, fun thing to do—it’s really changing its meaning.

Not unlike George Orwell’s ‘1984’

every: That Macintosh Turn on ads Goes down as one of the best ads ever shown at the 1984 Super Bowl, if not one of the best ads overall.

It crashed the market, pitted Apple against the big guys, against the corporate mainstream and against what was expected of professionals, and showed people that there was a new choice, an innovative choice, a different choice. It was a big starting point for the brand’s trajectory.

The “Think Different” ad campaign featuring images of Gandhi and Einstein and other creative thinkers throughout history was another classic ad campaign that really cemented the brand’s image in people’s minds.

Trust the product

Aidinoff: Apple has taken privacy really seriously in the age of Facebook and where other companies are selling your data They’ve decided it’s in their best interest to get you to truly believe in the product. Who knows how this will change with their partnership with OpenAI — I’m quite worried.

But you think back to their fight with Facebook about five years ago, where all of Apple’s ads were “Unlike Facebook, we’ll keep your data private.” This is another thing that really helps them through what can be a turbulent time.

Feels good, feels good

every: Steve Jobs never saw design as strategy. He saw aesthetics as an essential part of value creation.

In the product categories he was going through, the products all looked the same. They were boxy, they were black or gray, they just didn’t have much aesthetic value.

He felt that a desktop computer, and eventually, a phone, is something that you’re going to interact with throughout the day and so it’s really important to have aesthetic value for it and create an aesthetic connection.

He invested heavily in design. It is a brand that understood that function alone is not enough, but function plus aesthetic design can create an incredible connection with the consumer and an incredible sense of value for the product.

It has been a core, central feature of the product since its inception.

The store, not the community

every: Genius times were geniuses.

If you think about who Apple was trying to sell to in the early days, it wasn’t corporate accounts. Corporate accounts were locked by IBM, by Dell, and this kind of sales relationship was going on online. Gateway Computer was another brand that did a lot of online ordering. Apple was trying to sell to individuals, and individuals don’t have their IT department.

So, the Genius Bars that they’ve established and staffed are incredibly helpful in getting people in and having their own IT departments that help eliminate the friction of switching from PCs to Macs or from non-Apple products to Apple products.

The shops were apparently beautiful places. They were more for display and aesthetics than sales, especially in the early days, and they created a community aspect to the stores themselves.

People will stand in line for three days before the new launch. That was all part of creating brand value. The stores created event marketing and branding experiences for the brand. The shops still seem so.

Their own heroic comeback stories

Yoffie: They were almost bankrupt in the middle of their journey.

In 1997, they were three to six months away from bankruptcy, so it doesn’t look like a picture of continuous success throughout its 50-year history, and they had to reinvent themselves from 1997 to 2007. It was really fundamental to their success

Additionally, it’s not just the products, but the complementary products and services they’ve built around their core products that have made them so successful.

So, it’s not just the iPhone; This is the App Store. It’s not just having a phone in your pocket, it’s the ability to connect it to your computer and your AirPods and the cloud and do it in a seamless fashion. It is this ability to create an extended set of complementary services and products that has made Apple such a powerful player.

Walled garden

every: The Apple ecosystem is key to their business model — hardware, app stores, and everything else work together to create value for its customers, but also to return value to the company.

This is why Apple is so strict about app development and what gets included in the Apple Store. Because it’s all building its ecosystem and putting people in this walled garden of ecosystems. This is a really important part of its monetization strategy.

A big challenge ahead

Yoffie: Cellphone is essentially a replacement product. There aren’t enough people in the world to buy a new phone. What we have seen, let’s say, in the last 10 years, is relatively little growth in its core business.

This is a big challenge for Apple. They are trying to drive growth by building services that complement the iPhone business, but it is still fundamentally dependent on the iPhone.

The good news for Apple is that it only has around 20 percent to 22 percent of the global market share for cellular phones, so it has an opportunity to take more share from Android and other products, assuming they find a way to address world markets that are somewhat more price-sensitive than the US, Europe and Japan.

But Apple has to make some adjustments to do that.

–

This is the story is reprinted with permission From the Harvard Gazette.

***