The tech-ticker on Yahoo! Finance h ad
an interesting article about Apple zealots posting extremely critical messages in response to an article by Barron’s Eric Savitz which highlighted negative comments by Toni Sacconaghi, a Berstien Research analyst.
It got me thinking about why companies have such loyal fanboys?
Two Silicon Valley companies come to mind, Apple and Google.
The stock for both these firms has been hammered by recession fears.
Though the sell-off after the big run-up of last year was expected, the size of the fall has taken many by surprise. Having spent time working both in the valley and Wall Street, I often wonder whether Wall Street put sufficient value to the value of the brand which each company represents.
Apple’s brand loyalty is legendary. There are user groups out there still supporting the ill-fated Apple Newton. It is not hard to understand why people like Apple. Their products offer an unparalleled blend of functionality and elegance.
The iPhone’s touch interface seems to have intelligence; as if it knows what I would like to do next and makes doing that so simple. The interface is intuitive enough for a three year old toddler to an 80 year old granny to use with little training.
Users feel a connection with Apple’s products which is hard to replace.
There is a reason why Steve Jobs has a cult following and it
has nothing to do with hypnosis.
The Google Halo:
Google is often criticized for their dependence on revenue generated via paid clicks and their inability to monetize other products.
Analysts are also critical about Google’s investments in their non-core businesses like alternative energy (RE < C ) or the Google Lunar X Prize. Though on the surface these investments seem like a distraction, they have a bigger goal: to build a halo around Google which loyal users can associate with at a deeper level.
Web-Search is an industry where it takes just a mouse-click to switch providers. Google Earth has allowed me to revisit places dear to me half the way across the world. And if the army of users who have built applications on top of Google Earth (and the related Google Maps) I am not alone in enjoying what Google offers. Similarly GMail with its no-fee POP downloads, huge storage capacity, and relevant links provides a significantly better user experience compared to Yahoo!
Mail where I am expected to upgrade to Yahoo!
Another example of Google’s focus on end-user experience is YouTube. You can watch and share videos on YouTube without being bothered by any ads. Google is trying out ads on YouTube, but they appear in a small Picture In Picture type window briefly. If you are interested in the ad, you can click to view
the entire ad.
This provides Google a way to monetize the YouTube audience without being too intrusive. Contrast that with the way video ads are served by other sites like cnn.com where you are forced to watch a 15sec clip about an ad which
you may have no interest in.
Google was very clear about their objective of donating one percent of Google’s equity and profits to help address some of the world’ s urgent problem.
Google’s founders have been very generous in sharing their wealth with the rank and file of their company.
Apart from the greater good of mankind, their investment in alternative energy has a clear business objective also: to reduce the cost of running data-centers as the cost of energy and the amount of data which has to be stored grows exponentially.
Other firms can come up with a better search engines or a better phone; but can they duplicate Google’s halo or Apple’s cult? Go ask Microsoft.