If a brand wants to grow, it has a number of options at its disposal, line extensions, brand extensions, concept extensions, and co-branding. The brand could also purchase other brands and manage within its portfolio or endorse other products with its brand. According to Klopper and North (2011:231), a brand extension strategy is based on the premise that consumers place a value on a brand name, and this value can be used by organisations.
Apple has had an incredible run, staging one of the greatest comebacks in history, rising from the brink of death to a technology behemoth. It was recently valued at R800m, making it the most valuable company in the world and it is likely to be the first trillion dollar company in the world. It does this with a limited range of products that include MacBooks, iMacs, iPods, iPhones, iPads, Apple Watches, and Apple TV. With consistent innovation, they have managed to stay at the head of the pack creating objects of desire. Sometimes it feels like they know what we want before we know it.
This hasn’t been the case lately however. Since the passing of Apple’s founder Steve Jobs, the company has not made any real innovations, releasing only one new product category – the Apple Watch. So far, reception and sales have been ‘meh’ by Apple Standards. It is not the game changer that the iPhone was.
What will take the Apple Company over the trillion-dollar edge? Incremental growth by simply rolling out new iPhones and MacBooks (line extensions) or will it take something more radical to do the trick? Apple has already added to its portfolio by buying the Beats by Dre brand (multi-brand strategy). I believe it will take more radical forays into emerging technologies to take Apple to the next level.
Apple’s true strength is their ability to marry design, technology and a strong understanding of user experience to help people accomplish things. There have been rumours about experimental projects in the works like the self-driving car, live TV, and so on in search of their next big thing. I believe that if Apple focused their efforts in developing new products in the areas of Artificial Intelligence (AI), Virtual Reality (VR) and Augmented Reality (AR), they would reap massive rewards. The great thing about Apple is that they don’t need to be first; they just need to execute the idea better than everyone else by a mile. I believe they can extend their brand in these new emerging categories.
Artificial Intelligence: The Apple way is to make tasks much smoother and easier. Being creative, being productive, and consuming entertainment are all relatively seamless on Apple devices and platforms. Siri, the artificial intelligent personal assistant was introduced with the iPhone 4s. Imagine your day to day powered by the wonders of AI. Imagine an even more advanced artificially intelligent assistant you could converse with, give proper tasks to, like managing your schedule, sorting out your files, replying emails. Imagine an AI you could delegate to, knowing it was able to give you the right recommendations based on data about you.
Virtual Reality: The true next frontier. VR has the potential to be the next Internet. It is a blank slate for story telling, simulation, entertainment and work. Imagine being able to pop into a VR environment and hold face-to-face meetings with colleagues from around the world. Imagine being able to share your holidays by capturing your surroundings with 360-degree cameras and inviting your friends directly into the experience via VR. Imagine being able to tour potential destinations before you actually visit them.
Augmented Reality: Even better than all of those wonders is harnessing the power of AI and virtual reality and mapping that onto reality itself. Imagine being able to shop for clothes and super impose them on yourself before ordering. Imagine finding an object or product you really like in real life and being able to instantly pull up information about it and order immediately. Imagine being able to walk through your design projects, or rearrange your space before you even move a couch. Imagine being having your map overlaid in your field of vision so you can navigate travelling or moving around large buildings without getting lost.
All these ideas would dramatically change the way we live and interact with each other. Apple has the potential to change the world once again by extending its brand into these new product categories. There are risks to extending a brand; the idea of an extension is for the consumer to buy into these new products because of the name ‘Apple’. The extent to which this positive transfer occurs is positively related to the perceived fit, or similarity between the brand and the extension (Barone, 2005:263). If the new product or brand fails, it has a negative impact on the core brand. What makes Apple most likely to win however is that they understand how to use technology to create objects and experiences that delight their customers and enables them to do more. I think the areas of AI, VR, and AR are a great fit for Apple brand.
Klopper, H.B. & North, E. 2011. Brand Management. Cape Town: Pearson.
Barone, MJ. 2005. The interactive effects of mood and involvement on brand extension evaluations. Journal of Consumer Psychology, 15(3):263-270
Mikolajczak C. 2017. Apple becomes first US company to be worth $800bn. Available: http://www.independent.co.uk/news/business/news/apple-worth-800-billion-first-us-company-worth-tech-market-capitalisation-a7727526.html (10 May 2017)
Smith, D. 2016. 3 cutting edge projects Apple is working on right now. Available: http://www.businessinsider.com/apple-future-projects-vr-electric-cars-live-tv-2016-1 (25 Jan 2016)
Mac Rumors. 2016. Apple VR Project. Available: https://www.macrumors.com/roundup/apple-vr-project/