The Apple Advantage

Apple isn’t the first tech company to develop a desirable chat tool. I recall how indispensable I once found AOL Instant Messenger, Blackberry and Bloomberg messaging services. But Apple’s cache and clever strategy allows them to take it a step further. Internal records made public as part of the Epic Games Inc. lawsuit revealed that Apple made a calculated decision to keep iMessage as an exclusive iPhone feature. Per an article in the WSJ:

From the beginning, Apple got creative in its protection of iMessage’s exclusivity. It didn’t ban the exchange of traditional text messages with Android users but instead branded those messages with a different color; when an Android user is part of a group chat, the iPhone users see green bubbles rather than blue. It also withheld certain features. There is no dot-dot-dot icon to demonstrate that a non-iPhone user is typing, for example, and an iMessage heart or thumbs-up annotation has long conveyed to Android users as text instead of images.

Apple, recognized as a luxury product, creates early brand habits for teenagers and colleges students. Preferring to conform to social pressures and associate with the Apple brand, most teens (87% according to a study cited) choose an iPhone over every other device. The ostracism that comes with a green text is sufficient motivation.

To emphasize why luxury is a compelling advantage for a tech company, Galloway points to the wealth that has been created in both luxury and retail.

Few industries have created more wealth by tapping into our consuming selves than retail. Of the four hundred wealthiest people in the world (excluding those who inherited wealth or are in finance) more names on the list are in retail than even technology. Armanico Ortega, the scion of Zara, is the wealthiest man in Europe. Number three, Bernard Arnault of [LVMH], who may be thought of as the father of modern luxury, owns and operates 3,300-plus stores – more than Home Depot.

The emphasis is then places specifically on luxury on page 72.

When luxury works, the act of spending itself is part of the experience. Buying a diamond necklace out of the back of a truck, even if the stones are real, isn’t as satisfying as the purchase at Tiffany, from a well-dressed sales assistant who presents the necklace under brilliant lights and speaks in hushed tones. Luxury is the market equivalent of feathers on a bird.

In his book The Four, author Scott Galloway wrote that compared to Facebook, Amazon, and Google, Apple stood “alone as a luxury brand.” When you walk into a coffee shop and see people working on their laptops, the iconic Apple logo elevated the owner over others by communicating wealth, education and Western values. This difference provides a moat unavailable to the other tech giants. “While the other three companies, the alpha lions on the veldt of high-tech competition, still face the prospect of an early demise, only Apple has the potential to cheat death.”