Tuesday, October 29, 2013

Is Apple Going the way of Louis Vuitton?

     The last several months have revealed two interesting things about Apple.  One - an apparent slowdown in innovation - has been widely discussed.  The new Macbooks, iPads and iPhones are only incremental changes on proven past designs.  Nothing fundamentally new has been introduced since the death of Steve Jobs.

     Does this mean apply is in decline and its stock is headed for a drop?  Not necessarily.  Consider Louis Vuitton.  The parent company, LMVH, has a market value of $70 billion despite a spotty record of technical innovation.  Coca-Cola has a market value of $175 billion based primarily on one product that the company proudly declares has not changed in nearly a century.  Can this be the new niche for Apple - a technical follower, but a brand leader?  The second piece of news from the last several months suggests that Apple may think so.  The company's two most high profile hires have come from Louis Vuitton and Burberry.  Neither were software wonks or hardware designers.

    If this is the new Apple, my take is it will not work.  What makes a brand cool and desirable in technology is different than in fashion or soft drinks.  Cool in technology is defined by innovation.  That is why Google is such a threat to Apple.  The company just seems edgier - more willing to try things and let the public judge.  My conclusion is that this willingness to try dramatic new things is what is ultimately rewarded in the technology space. Being yesterday is being uncool and no one wants to buy uncool technology products.

1 comment:

Blogger said...

Do you drink Pepsi or Coca-Cola?
ANSWER THE POLL and you could get a prepaid VISA gift card!