Apple’s revenue problem is actually a marketing problem

For the first time in more than a decade, Apple reported a year-over-year decline in quarterly revenue. Wall St analysts say it’s because of weak iPhone sales, which is certainly true—Q1 saw sales of 51.2 million iPhones compared to 61 million in Q1 2015.

But Apple’s poor performance is only a symptom of a much larger problem: its marketing has become as stale as moldy bread.

Apple was once the pinnacle of branding. It released meaningful ads—like this one and this one—that challenged consumer behavior and drove sales. That success, in large part, was due to its old marketing team at TBWA/Chiat/Day (the agency and Apple began to split ways in 2014). The agency focused on telling Apple's story in a meaningful way that resonated with target consumers. They strayed away from selling Apple products through product features and competitive advantages. Instead, Apple’s ads followed a golden maxim in marketing: Features don't change behavior. Stories do.

Let’s pause for a marketing lesson. Simon Sinek—author, speaker and consultant—has a classic 2009 TED Talk called "How great leaders inspire action." If you haven’t seen it, it’s 18 minutes and a must watch. In his talk, Sinek explains how the most successful leaders/organizations are ones that start with why (or overall purpose). Once the "why" is understood, then brands have the authority to explain how they do what they do (their secret sauce) and what it is they actually do. Here’s a quick visualization of what he calls "The Golden Circle.”

Sinek's Golden Circle illustrates an essential marketing premise: in order for customers to want to buy something, they need to know how that product fits in with their personal brand—or how the purchase will compliment their personality. It's common for marketers, especially in tech, to want to sell a product on features alone because that seemingly is what makes the product unique. However, doing so ignores the emotional (and more valuable) reasons that create loyal customers and develop strong brands.

Here’s Sinek with an example from his TED Talk. Ironically it’s about Apple:

“If Apple were like everyone else, a marketing message from them might sound like this: We make great computers. They’re beautifully designed, simple to use and user-friendly. Want to buy one…Meh.

“And that’s how most of us communicate…We say what we do, we say how we are different or how we are better and we expect some type of behavior…Here’s how Apple actually communicates:

“Everything we do, we believe in challenging the status quo. we believe in thinking differently. The way we challenge the status quo is by making our products beautifully designed, simple to use and user-friendly. We just happen to make great computers. Want to buy one?

“Totally different right? You’re ready to buy a computer from me. All I did was reverse the order of the information. What it proves to us is that people don’t buy what you do, they buy why you do it…”

Think back to the early 2000s when Apple released iPod. After a few years of non-existent marketing, Apple released ads featuring silhouetted models dancing to popular music. And that’s when sales erupted.

Let’s think back to Sinek: These ads said absolutely nothing about what an iPod was, what it did or how it worked. Not one product feature was explained.

The ad was cool. In true Apple form, it was different. It stood out and resonated with Apple’s key bet at the time: Owning an iPod is a fun and radically different way to listen to music and anyone who tries it will instantly fall in love.

This  iPod marketing campaign showed us that in buying an Apple product, you will not only have fun, but also be considered fun. Through these types ads over the years, Apple transformed itself from just a tech company to a lifestyle brand. Owning an Apple product meant being associated with something fresh, exciting and creative. Wearing white earbuds became a status symbol. Owning a Macbook was a one-of-a-kind experience. People were hooked. Apple won.

Fast forward 11 years to the marketing campaign for iPhone 6s and Apple’s story turns bleak. Apple's campaign was fixated on the idea that "The only thing that's changed is everything." This story has no purpose. It has no true reason that explains why people—emotionally speaking—should buy. Take a look:

“It responds to the pressure of your thumb…Now you can change apps like this…Photos have changed. They move now...”

Here’s the ad in a nutshell: Product feature. Product feature. Product feature. Celebrity cameo. Product feature. Product feature. Celebrity cameo. Product feature. Product feature.

Where’s the value prop? Where’s my deep, underlying reason to buy? I can’t find one in any ad for iPhone 6s. This is the root of the problem. Apple has lost its way in a heated battle with Samsung—a battle it has been losing as of late.

How does explaining 3D Touch compel me to buy Apple's phone? It doesn’t. It’s just something Samsung Galaxy phones don’t have… yet.

How does Cookie Monster baking cookies and talking to Siri encourage the average person to purchase iPhone 6s? It doesn’t. It’s just a fun way to show that the “Hey Siri” feature is Apple’s equivalent to Android’s “Ok Google."

Apple’s iPhone 6s marketing campaign doesn’t explain why, it only explains how and what. It disobeys Sinek. It sells iPhone 6s based on what it does, not why it was made.

As Apple continues to fumble in its marketing, Samsung continues win and grow its smartphone market share. At the end of 2014, Samsung and Apple were even in market share at 19.6%. Fast forward to the end of Q1 2016 and the gap has widened to 24.5% Samsung and 15.3% Apple.

While I’ve been an Apple fanboy for years—I haven’t missed a keynote since I started watching in 2007 and I’ve only owned iPhones as my smartphone—I’m disappointed to see the company lose itself in competition with Samsung. It needs to heed its own advice from the ‘90s and go back to celebrating being “the crazy ones, the misfits, the rebels, the trouble makers, the round pegs in the square holes, the ones who see things differently.” The iPhone 7 launch is roughly four months away. Let’s see if Apple chooses to tell its story or decides to, once again, show us all the cool new things it can do.

About the Author
Ross Gordon is currently a sales development consultant for LinkedIn Sales Solutions and a recent alum of LinkedIn’s Business Leadership Program - Global Sales, a rotational program for early in career talent. He is a recent graduate of Northwestern University’s Medill School of Journalism, Media, Integrated Marketing Communications and has a strong passion for storytelling, marketing, technology and effective communication. Ross previously interned for two advertising agencies (FCB Chicago and SapientNitro) and for Spotify in its product marketing org for advertising formats.