Cog: Reflections on Steve Jobs’ Death Stirs Refelections on Early Forecasts for iPhone, Elegance of Jobs Design



October 7th, 2011


It was only natural for anyone touched by Steve Jobs (just about all of us) to reflect on his accomplishments. I will most miss his genius as a marketer first, inventor second. From my perspective, Steve Jobs was able to create a need and fill it with outstanding products that fit a brand promise to not only be different, but better and more elegant. And in that elegance within each product produced under his direction, Apple transcended from electronics manufacturer to become a luxury brand market driver. PC’s and cell phones were just mainstream–something to use but nothing special–just a functional ho-hum experience. Jobs understood that to create sustainable value, a product and its producer must exceed expectations. That the face of an iPhone is glass meant Jobs cared about screen quality and the overall consumer experience that could replace ‘ol fido as man’s best friend. But it got even better with each turn of the design. The nuances were innumerable and the public placed premium value on the iPhone as a result.

So this is where the moment of truth or consequences came for Apple with the release of iPhone 4S. What is under the hood is substantially better, faster and will improve the user experience. So the superficial knock on the iPhone 4S is that it’s not 5. We all expected a 5, right? Now would be a good time to review the paragraph above as an illumination of Jobs, the brilliant marketer. The iPhone concept, design and its successful launch meant so much to him and Apple (one and the same) that, to get it right the first time, he delayed production–obsessing over the details. The iPhone 5 is tucked inside the iPhone 4S and my belief is that this model is a quick tip of the hat and wink to Jobs. This iPhone model didn’t need a 5 on it. That can happen Next. This turn on the phone was for Steve–4S. So, this one is 4 Steve. Thank you.

Here’s the full content from the 2007 interview that covers iPhone, luxury branding and how 2008 was going to be a big year for Apple as predicted to be one of the two most admired brands in 2008.

AN INTERVIEW WITH MARK CAIN
BRAND CORE INNOVATOR
April 2007

What trends have you seen within the luxury world?
Authenticity is key. The luxury demographic has an incredible appetite for authentic products and more notably, experiences that provide opportunities to connect with family or friends at a higher level. Over the last 5 years there has been a significant increase in the demand for exotic experiential travel to unique destinations, villa rentals in far-away places and personal services to streamline the process of planning and enjoying these journeys.

When did wanting to be rich and live a life of luxury become so popular?
It’s a basic part of the human condition to improve and raise the level of existence. Economic cycles encourage or curtail the pursuit to a degree, but the pursuit of wealth and the appetite for luxury grows the more it is fed.

Do you think that the middle class is dying?
The middle class is here to stay but to a greater extent there is a rising separation in the market between traditionally wealthy households and a rapidly emerging ultra-wealthy demographic with incredibly sophisticated lifestyles.

There seems to be an explosion of luxury goods. Which goods do you think are the most popular?
The offerings of exquisite, handcrafted timepieces have exploded to emerge as a barometer of wealth and sophistication, especially for men. This contradicts the trend of middle-market consumers that use an iPod or their cell phone for the functional need of keeping time. Wine collecting and the appreciation of artisan wines are rocketing in popularity. Today’s wine collector may have thousands of bottles stored in home cellars in addition to offsite temperature-controlled wine vaults. That’s hundreds of thousands of dollars in inventory that will be consumed over generations. A terrific example of filling a specific niche in this new luxury explosion is The Napa Valley Reserve, located in St. Helena, California. It’s clearly about the wine there since Harlan Estate and Screaming Eagle are the viticulturalists and winemakers, but it’s also about the entire experience, the culture of cult cabernet and connection their members enjoy.

What products/brands do you anticipate being popular for 2008?
Apple iPhone and Virgin Galactic

I’ve heard about luxury canned food companies. Do you see this market taking off?
The American household dry goods pantry is shrinking while the refrigerator is expanding. I’d bet on any service business that focuses on providing a great variety of fresh, fast and convenient meal solutions for all three day-parts. It can be gourmet grocery or meal assembly centers depending upon what consumer they intend to serve.

It also seems that sunglasses/handbags/shoes are always some of the most popular items. Why do you think these make for good luxury purchases?
It’s how they make you feel—plain and simple. A woman will wait 2 years for a Hermes Birkin Bag ($9,000-34,000) because she has to have it and she knows that not everyone else will. And when she does get it, it makes her feel like a million bucks. Owning and wearing these is a statement of sophistication and wealth as much or more than the element of fashion.

Do you think these items will still be popular in 2008? Would these markets be good for entrepreneurs to invest in?
Virtually every luxury category is highly competitive and anchored by established brands. If you have an edge or angle that makes you different then you can establish your own space. I think the Kate Spade brand is a terrific example of filling a niche and building a smart brand with a consumer who gets what her approach is all about.

What is new? Are there any markets within the luxury world that are untapped?
I remember watching Kirk Douglas in Jules Verne’s 20,000 Leagues Under the Sea as a kid and thinking about how amazing it would be to live under the ocean in a luxurious submarine that sports every amenity you would want to enjoy while taking in the mystery of the ocean. If space journeys are the next big thing, then who knows, maybe ultra-luxury submersible experiences are the next, next big thing.

Can you talk about Destination Clubs? Is this a market that you think will continue to thrive in 2008? How could an entrepreneur get involved in this market?
Destination Clubs are far and away a superior alternative to traditional second home ownership and they satisfy a growing demand for greater variety of destination experiences without the limitations of hotel rooms. A family can easily travel to a number of club homes in ski, beach and golf locations year round without the burden of housekeeping and maintenance. The home quality is also consistent in a club and members can rely on pre-arrival services such as pre-stocking of grocery items, children’s needs and holiday décor. The financial aspect for members is simple and mirrors most country club models where a one-time refundable deposit is made with the club and then annual dues recur every year of membership. Return of membership deposits range by club, but are generally in the range of 80-100 percent of the original deposit.

The idea of running a destination club seems easy at first; buy houses and find members. It’s a real estate portfolio exercise with an incredible amount of service requirements operating in the field to deliver the experience members expect from your brand. Starting a club today to get mass and scale to compete with established brands would be in the $50-100 million range. Other than capital requirements, there is a limited supply of executives with the experience it takes to build a club from the ground up. Having said all of that, I think opportunities exist to provide services to clubs and their members in specific resort markets. Clubs will always be searching for more ways to add value to services in more efficient ways and that could open the door to nimble personal service providers.

What markets do you think would be the best for entrepreneurs to invest in (butler services, upscale products, yacht services, massage services etc)?
An interesting model that really intrigues me is what I call the personal reward space. I see traditional men’s barbershops that make a haircut and shave as getting only a slice of the experience. Why not add a pool table, cold mugs of beer and dry-cleaning service? The same can be said for the personal massage business where both sexes are taking an hour out of their week to relax. Two years ago the notion of a “man cave” was unheard of. A smart remodeling contractor could market turning unused rooms into personal space to suit a man’s need to relax in his own environment. What about a hair and nail salon that’s also a martini bar?

What opportunities are there for entrepreneurs to add luxury to their existing business?
Scott Berger is an incredibly talented friend who designs the Addison Taylor jewelry line. Each piece is handmade and amazing, but the showroom environment is as unique as his designs. The location is on the 9th floor of a high rise in Scottsdale where he’s installed a pool table and a sleek lounge that transcend retail jewelry purchase experiences. He built his brand into something unique and appealing to his clientele who appreciate and prefer handmade authentic craftsmanship and the experience he delivers more than running into the mall to grab a Tiffany blue box.

What opportunities are there for entrepreneurs looking to upscale an already existing product?
Think beyond the functional elements of your product and innovate around creating and delivering an emotional reaction to it. That’s exactly what Steve Jobs did with the cell phone market. Instead of making a phone that was just better, he encouraged Apple to design their product around a different user experience. It’s not the fact that the iPhone sends and receives calls, manages data or plays music; it’s the experience and the emotion it delivers when you see the icons, hold it your hands and swipe your fingers over that smooth glass face. Apple leapfrogged a flat phone manufacturing industry and created the first luxury cell phone experience. Who thought that was possible?

What do you think is the best target market for selling luxury products?
I’ve identified a segment I call the Conscientious Elite. They’re incredibly wealthy and can afford to buy virtually anything. But at the same time, they realize that leading an extravagant lifestyle can send the wrong signal. They’re selling second and third homes and buying alternative luxury fractional ownerships or destination club memberships. They are squarely focused on quality over quantity and they care a great deal about the environment they will leave for future generations. The Conscientious Elite see their legacy less in financial terms because they have amassed a multi-generational fortune, which frees them to focus on sharing high-quality multi-generational retreats, and connected experiences.

What about the personal services industry?
Certainly one of the top opportunities but it comes with a few hurdles. Liability of course is one, but the logistics and economies of providing customized services, as a scale model is a gating factor. Wendy Lyn is a personal services provider who connects individuals who are interested in the wine, food and culture of Paris with authentic experiences and the artisans who have a passion for what they do. The only way to tap into that type of experience is through a personal services provider, and by the very nature of what they do at their extremely high level of expertise. It is not scalable—thankfully.

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