What Your Next Launch Can Take From the IPhone

SAN FRANCISCO While rivals and marketing specialists were busy griping about the hype surrounding iPhone’s recent launch, Forrester Research was formulating a study that shows Apple’s newest product will help other tech marketers more than they realize. “The benefits from the iPhone’s positioning and marketing strategy extend beyond Apple and [iPhone carrier] AT&T, teaching competitors how to provide better product, purchasing and services experiences to their customers,” according to the July 6 report, “The iPhone Is a Win-Win-Win,” by Forrester analysts.

Initially, competitors at carriers such as Sprint and Verizon will see customers defect to the iPhone, and handset makers such as Motorola will struggle mightily to match Apple’s software, the study asserts. But the end result of the iPhone launch will eventually lead to three industry-wide innovations, according to the report.

First, devices and services will be easier to use. The iPhone will make many features accessible to consumers who are frustrated “by the lousy software in their existing handset,” cites the study. Exposure to a friend’s or colleague’s iPhone will heighten people’s expectations of all handheld electronic technology devices.

Second, phone carriers and phone service marketers will embrace the Internet more heartily, just as the iPhone does. The Apple handset fosters an “Internet-on-the-go value proposition” that will pressure all mobile devices to become more integrated with the content on the Web, according to the study. “Already Nokia has begun using the Internet in interesting ways, as a tool for promoting and marketing its product as well as part of the user experience, allowing customers to refresh software and to download things to their phones, via the Web.”

Third, customers will buy more mobile content, generating more revenue for the industry. Up to now, people could not see the value in all the services their mobile carriers offer, per the report. Apple did the unthinkable and eliminated choice, rolling a range of services directly into the overall plan. As a result, iPhone customers will deliver to carrier AT&T nearly three times the revenue from content than AT&T gets from its average subscribers, said Charles Golvin, the lead author of the study.

How about brands beyond mobile phones and other handsets? iPhone’s strategy and success go beyond its own industry and offers four clear lessons for brands in a variety of tech-oriented fields, according to the study.

Lesson One: Embrace the PC as a channel and as a center of the experience. In most cases, the powerful PC and broadband network offer the best experience to customers, so use them, said Golvin. Do not force all interactions with your customer to be handled through your own network. Customers will prefer to go where they get an easier and more satisfactory experience, cites the study. “The PC is the center of discovery for consumers,” with its easy-to-see screen and easy interactions, so it is a good way for users to explore and learn new functions, Golvin said.

This discovery process is especially important for products and services that are new to consumers. “Don’t make the mistake the cellular companies are making, in which they seem to care more about their network than the customer’s experience,” said Golvin.

Lesson Two: Don’t make it all about your brand. Most marketers believe their brand is the end-all and be-all. But like AT&T is demonstrating, sometimes it is better to recognize that to maximize the benefits of a partnership, “it is necessary to let the partner, in this case Apple, take the lead,” according to the study. Golvin points to cable companies such as Comcast and Time Warner, which need to show the value of their broadband service in the home. “They could partner with devices such as Roku’s Internet radio and music player [rokulabs.com] and market these products to show people what their service can do and, in turn, build customer loyalty,” said Golvin.

Lesson Three: Simplify pricing. In tech-related industries it is common to offer a maze of confusing options and formats. Apple has shown it is smarter to make the basic subscription or purchase decision “beautifully simple,” with a few additional options that can be added if needed, per the report. In Apple’s case, the choices were boiled down to one question: How many minutes do you want? “Offering a simple price plan allows the customer to discover all the capabilities offered” under that umbrella price, the study cites. For instance, TiVo missed the opportunity here, said Golvin. “TiVo sells the box and the service separately, and TV customers aren’t always clear on what they are paying for. In contrast, HBO offers movies on demand as part of its HBO subscription, so HBO customers are more apt to try out the movie service and discover how it works,” he added, noting that simplified price prompts people to behave in new ways and see advantages of new services.

Lesson Four: Don’t be afraid to charge for quality. At launch people will break out of ingrained thinking and pay a premium price if they believe the product offers superior experience and beautiful design, according to the report. “When you give something away, people get the message that it isn’t worth much,” Golvin said. Apple recognized that mobile phones have become a form of social communication and that the phone you carry says something about you and your image.

Once the product’s reputation and impact have been made, “less expensive models with fewer functions can be offered later, similar to how Apple’s iPod introduced newer versions at cheaper price points once the brand had gotten established,” he said.

In summary, the iPhone’s successful launch will eventually help its competitors by forcing them to improve their product positioning and pricing strategies, according to the study. Beyond that, it also gives marketers in emerging industries a new set of lessons in how to co-brand, price, share technology and simplify their marketing for their next launch.