Is Apple becoming Compaq? The Big Bang launch problem

Posted by Rob Enderle

I watched the Big Bang launch that Apple pulled off earlier this week with both excitement and trepidation. 

Excitement because it is abundantly clear that Apple isn’t repeating the same mistake it made around the time of Windows 95, and trepidation because Cupertino broke one of the cardinal Steve Jobs rules - essentially following a practice more similar to what firms like Compaq did and HP does. Let’s analyze both.

 

Avoiding the Windows 95 Mistake

1994/5 was an amazing time for me, as this was the first year of being an independent analyst and I was front row and center for the entire ramp to market for Windows 95. However, Apple was also a client and I met with company execs several times in an attempt to convince them to take Microsoft's launch more seriously. However, they consistently told me not to worry, as they had everything in hand. Well, it obviously didn’t turn out that way - as this particular launch was the one that began the death spiral Steve Jobs was brought back to halt, which he stopped with a vengeance. 

This time - right before the Windows 8 launch - Apple fired off both barrels and refreshed a broad variety of products, while also introducing the iPad Mini. Clearly, they were taking this latest launch seriously, yet made another mistake by doing it - which actually would have Jobs turning over in his grave.

Big Bang Launches

The difference between Apple and most PC firms is all about focus and concentration. Steve Jobs preferred  to launch major products primarily by themselves in an effort to drive people to a particular device. iPhones, and iPads get, or got, this attention last.But this allows Apple to drive people to their product and aggregate all of their marketing efforts to make this successful. Basically, the products are designed to be sold this way.

Other vendors approach this issue very differently.This is like comparing a sniper rifle and a shotgun. Meaning, other vendors launch a bunch of products at the same time with far less marketing in a shotgun like approach - hoping one or more will hit a buyer in a way that will convince them to purchase.  As Apple’s financials have showcased, Cupertino's method is actually more profitable, as they get people to actually line up for their products, while other companies don't.  

The iPad Mini should have been launched this way but instead was buried in a big bang. Worse, it was priced about 60% above market and the iPad has, by comparison, been successful because it has been more competitively priced. Perhaps this is why Apple decided against a targeted launch, as they may have realized they couldn’t hit the critical price point with the iPad Mini so they buried it under a pile of other announcements.  

However, Jobs would have likely chosen not to launch the product and focuses Apple’s efforts on selling the more competitive choice, all while commenting on how stupid small tablets are. Doing it this way Apple may validate small tablets, but push buyers to those that are better priced. This not only forfeiting much of the tablet share Cupertino would have lost anyway, but incur the costs associated with products that are difficult to sell and need discounts, incentives and other expensive practices to move.   

Wrapping Up:  Apple Becoming Compaq

Given Tim Cook’s background, one of the many issues that concerned me is whether he would take Apple back to practices that were more common in industry heavyweights like Compaq. With this launch, I’m afraid we have evidencethis is the case and the iPad Mini and Apple will increasingly become less Apple like going forward. Unfortunately, Steve Jobs won’t be coming back this time and unless they go back to the Jobs script it is likely the Apple we once knew is no more.