Anthony Frausto-Robledo, EIC ([email protected])

5 Jan 2005 - (originally written 8 July 2004)

 

Opinion: Apple needs a New 'Mac LC' for Market Growth - Part 2

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Packaging Brands and Editing Products

Apple could do well by looking very closely at how the automobile world is transforming into mega auto groups who package brands around tightly edited product profiles. This is particularly interesting with GM and its Saab subsidiary (see related story). Like Ford, GM is learning how to capitalize on shared components and platforms in order to shave costs on building cars and it is tapping all of its assets to do this. This means that it will tap Subaru's manufacturing expertise in all-time/all-wheel drive cars in order to bring a luxury foreign brand (Saab) into the hot new premium sport compact market.

New Saab 9-2X

GM's Saab subsidiary had to maintain at all cost the Saab brand philosophy in the final product but they clearly tapped some expertise coming out of Subaru and they did it in tall order. My prediction is that this car will be moderately successful in increasing Saab's market share and overall unit growth. It will be popular with some former Subaru owners who always dreamed of a Swedish car (like Volvo) but couldn't afford one. And it will resonate with a new class of customer in the car market: 'eurocentric' design oriented customers (quiet often young) who cannot afford cars priced in the high 30's or 40's range -- where typical Saabs play.

The true Saab customer -- similar to the true Macintosh customer -- will still purchase pure Saab cars, but this new "Saabaru", as some people have called it, will no doubt increase Saab's total market share simply because the product doesn't appeal to the existing Saab owner class but will appeal to a new, younger and design-conscious segment of car owners.

Targeting the New Apple Customer

If GM and Saab can do this why can't Apple? In fact, Apple is a prime candidate for this trend. What trend you say? The trend in luxury brands coming down market with products that don't cannibalize their higher-priced/higher margin products and don't tarnish the brand either.

Volvo has done this better than anybody else in the car market in the last half decade. Who would have thought it possible ten years ago that you could buy a pure Swedish Volvo car for a smidgen more than a Honda Accord? But you can today.

Is Apple a BMW or Volvo of the computer world? Yes it is! Absolutely. One of the 'Mac Myths' is that they are expensive. And expensive generally equates to higher quality, more prestige, unique attributes, and other similar perceptions. Do average Dell folk want to drive BMW's? Heck yeah they do! Or at least a good percentage of them do.

Alex Salkever of BusinessWEEK online wrote a six-step plan for Apple to increase its market share. In it he said:

"We're in the era of cheap chic, Steve. And I have no doubt that Apple can play that game with the best of them. Give us a really cheap, really cool PC, and watch them fly off the shelves." --- Alex Salkever, BusinessWEEK

If Land Rover, Volvo, and Saab can do it in the automobile world...if Michael Graves and Martha Steward can do it at Kmart....and if fashion divas and divos like Mossimo can do it...then why can't Apple do it with computers? Why can't Apple come down market in an intelligent way that doesn't cannibalize the rest of its more expensive product line?

The answer is they can. This is the path to intelligent market share growth. If Volvo and Saab can figure this out, so can Steve Jobs.

Next Page > The Apple ePower Pro

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