Since this is my first post to the Bazaarblog I thought I might introduce myself – I’m Michael Osborne, Vice President of Sales at Bazaarvoice.  I’ve been here for 6 months now and finally had a break between our great meetings with prospects to write up a quick post on something I’m very passionate about – technology.  Consumer electronics and technology in general has been a passion of mine since I was much younger and exposed to the original Apple Macintosh 128k.  And a recent announcement reminded me of just how long it has been since 1984.

This past week saw the public announcement of what will be THE device of the year in consumer electronics – the Apple iPhone.  Regardless of your views on Apple, the Mac, or the now legally-embroiled Cisco iPhone issue, you will admit that this thing is cool.  The blogs that cover this space exploded on Tuesday with the announcement at Macworld by Steve Jobs.  The blogs that DON’T cover this space exploded just the same.  It seemed that everyone was talking about this 4.5” x 2.4” x 0.46” phone – that doesn’t really exist yet.   I found it interesting that no matter how hard people tried, you couldn’t really talk about it for the past 2.5 years – including Apple employees that were working on it.

Apple did something that they’ve had difficulties doing in the past – they kept the entire project secret.  Many blogs and interviews have covered the “how Apple did it” of this achievement, but what’s amazing is that they really pulled it off.  Even up to the day of the presentation by Steve Jobs the rumored specs, capabilities, and even photos of the iPhone were vague or flat-out wrong.  Do a quick search for iPhone on Google’s image search and you get seven wrong images before you get to the right one.  The first page of results is all wrong except for two.  Clearly the word of mouth about the idea of an Apple phone was extreme leading up to the announcement – and this allowed Mr. Jobs to announce only one other major innovation and still have a very successful keynote.  No update on the rumored Macbook + Macbook Pro form factor, nothing about Leopard or Time Machine, nothing about iLife ’07.  The Apple TV got some early spotlight time in the presentation but that was it.  This announcement was too big to let anything else get in the way.

So the world wanted to hear about it – and the markets were waiting to react.  This image is a snapshot of Apple (AAPL), Research in Motion (RIMM), and Palm, inc (PALM) showing their relative performance on the day of the announcement.
 

 

While the activity corrected a bit by weeks end, the results were Apple gained 7.83% with Palm and RIM losing 3.43% and 5.23% respectively.  Legitimately, the Apple iPhone is not a competitor of the Blackberry as it has no business-level email support nor any integration with Outlook planned (yet).  That didn’t matter – as the perception by the market and the word of mouth on how great this new device will be was enough to add BILLIONS to Apple’s market capitalization and erode hundreds of millions to billions for Palm and RIM respectively.  All because the word on the street about a device that exists in prototype only and won’t be available for six months was so very cool.  (Full disclosure, I will gladly be one of the first to try and buy an iPhone)

Even Mr. Jobs is being conservative with their estimates of how many they can sell – by saying that their stretch goal is 1% of the overall market.  That means ten million units, or a minimum of almost $5 billion in sales.  And to think that at one point the experts said that the iPod was a failure in the making.  Anyone predicting the same of the iPhone may have some fun looking back on their quotes in five years. 

What has generated such strong word of mouth for Apple, particularly in recent years, are the strong products they’ve released and revolutionary experiences they’ve provided for their customers.  Referencing some of the word-of-mouth training on WOMMA’s website, Apple doesn’t have “me too” products.  Their operating system OS X is very different than Windows and if anything Vista could be the “me too” product here.  Their design for the recent flat-screen, single-unit iMacs is completely different than anything else offered in the PC world and has remained that way for years.  The iPod was different in its controls, its link to a music store, and its constant innovation (the iPod nano, shuffle, video iPod, etc).  Their basic premise of creating great products, over and over again, has created the foundation of great word-of-mouth potential – which was realized completely this past week.  This has worked for a number of companies like Google and Starbucks, referenced back in September by Brett in his posting here.  But keep in mind that it can fail even for companies with great previous wins – if they don’t continue to innovate and deliver great products.  Anyone remember the Apple Lisa? Or the Newton?  The lesson is that companies which invest in greatness in their products and services instead of tons of additional marketing will win in the long run.

The buzz about this new phone from Apple shifted billions of dollars of wealth, scared a number of multi-billion dollar companies, and generated outstanding traffic and interest on the net.  All in a day.  I’m off to read more about what Apple will do next 😉

7 Responses to “Secrets, Speeches, and a Word-of-Mouth Frenzy”

  1. Brett Hurt

    Is the iPhone for the ADD age? Read this and let me know what you think:
    http://money.cnn.com/2007/03/16/magazines/business2/simple_tech.biz2/index.htm?postversion=2007031612

    The UI appears to be streamlined, but it is loaded with gadgets. I currently use a Nokia phone with built-in BlackBerry, because it has the form factor of a phone but the power of a BlackBerry. I wouldn’t recommend it, though, it was an absolute nightmare to set up (it uses the oldest BlackBerry technology even thought it is a fairly new phone). But I bought it for similar reasons pointed out in the Business 2.0 article.

    Here it is:
    http://www.nokiausa.com/phones/9300

  2. Brett Hurt

    Is the iPhone for the ADD age? Read this and let me know what you think:
    http://money.cnn.com/2007/03/16/magazines/business2/simple_tech.biz2/index.htm?postversion=2007031612

    The UI appears to be streamlined, but it is loaded with gadgets. I currently use a Nokia phone with built-in BlackBerry, because it has the form factor of a phone but the power of a BlackBerry. I wouldn’t recommend it, though, it was an absolute nightmare to set up (it uses the oldest BlackBerry technology even thought it is a fairly new phone). But I bought it for similar reasons pointed out in the Business 2.0 article.

    Here it is:
    http://www.nokiausa.com/phones/9300

  3. Brett Hurt

    Is the iPhone for the ADD age? Read this and let me know what you think:
    http://money.cnn.com/2007/03/16/magazines/business2/simple_tech.biz2/index.htm?postversion=2007031612

    The UI appears to be streamlined, but it is loaded with gadgets. I currently use a Nokia phone with built-in BlackBerry, because it has the form factor of a phone but the power of a BlackBerry. I wouldn’t recommend it, though, it was an absolute nightmare to set up (it uses the oldest BlackBerry technology even thought it is a fairly new phone). But I bought it for similar reasons pointed out in the Business 2.0 article.

    Here it is:
    http://www.nokiausa.com/phones/9300

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