Is Apple all that?


This report by Douglas A. McIntyre with 24/7 Wall St makes a case for Apple (AAPL) as the second-most valuable corporation in America, after Exxon Mobil, in terms of market value.

Apple posted record revenue of $20.34 billion in the third quarter of 2009. Revenue was up 66 percent from the same quarter a year ago. The total value of Exxon Mobil’s shares creates a market cap of $362 billion, while Apple’s is $284 billion. That’s ahead of such giants as Wal-Mart, the world’s largest retailer.

McIntyre cites analysts, who point to Apple’s rapid growth, which he says is unmatched by any other major American corporation. With hot-selling iPhones, iPads and Mac computers, the analysts may be right.

 

But I can’t help thinking of the changing taste of consumers. Exxon deals with oil, perhaps the world’s most valuable commodity, while Wal-Mart of course sells such a large diversity of products and has a reputation of selling for less. Apple has done well to move beyond simply selling computers. Yes, Apple’s products are fashionable. But they are only into one segment of the economy: consumer electronics. Changing consumer preferences or bad publicity (such as the iPhone antenna problem) or the eventual loss of magnate Steve Jobs could upset the Apple cart. So I would urge caution when looking at Apple as an investment. What goes up can — and often will — go down.

 

Observations on brands in social media


I have only a few minutes to talk about this interesting read on social media and branding on Fast Company, so here are some observations:

Dunkin’ Donuts: People trust other real people and connect with them more than they do to talking animals or celebrities. And unless you’re trying to set up your brand as the Rolex of your industry (the superior product differentiation strategy), it may not make sense to say how superior your product is – show people, don’t tell them.

Clinique: I agree with the observation on Clinique’s “how-to” videos being more socially relevant than Axe’s frat-house humor. There’s a good reason “how-to” books are consistently big sellers: Consumers are looking for useful information on “how to” do many things. Take a look at your product or service and ask yourself what sort of “how-to” tutorial you can offer to build value to your audience.

Gimmicks: There may be a time and a place for gimmicks, but they just are not effective in the long-term. Find creative ways to play up the unique features of your product – fresh, never-frozen burger patties are a great selling point for a burger chain because of the taste and quality factors (ask Five Guys Burgers and Fries execs why their burgers outperformed McDonald’s and other, larger chains in a recent survey).

Finally, the article makes a good point. Social networking isn’t for everyone (Gillette’s campaign on shaving the “nether region” sends chills down my spine). Just because you can do something, doesn’t mean you should.

%d bloggers like this: