Apple's value is in its brand, not in us

The tech giant is facing up to the same challenge that a lot of brands, and their agencies, face every day.

The Fourth Group – a 250,000-strong community of people pushing for a better technology future for all – published a piece of research at the end of last year that must have made sobering reading for tech platforms and legislators everywhere.

The study – conducted with focus groups in 40 countries – concluded that people wanted tech companies and platforms to be "held accountable for the misuse and manipulation of personal data, the spread of misinformation and hate" and "their unethical monetising models (the ‘attention economy’)".

This research, combined with stories of apparent moral – if not legal – transgression of these platforms, such as this week’s revelation that Facebook paid teenagers to use an app that collected their data, paints a picture of a world where the public wants people to stand up and be counted. The public doesn't want to – in the words of that research – rely on self-imposed "standards… haphazardly constructed by pioneering tech companies, often in response to public scandals". It doesn’t appear that the public has a huge amount of trust in national legislators to combat the ambitions of the tech titans either.

It seems that it might fall to brands, then, to point the way to better behavior, and the most likely candidate up to now has been Apple – a tech giant itself, but one that has had a strong enough sense of goodwill around its brand to avoid a backlash.

As a manufacturer of premium-priced hardware and purveyor of heavily curated content, Apple has long been able to drive margin from its design, strong brand desirability and good track record of data and content safety. Contrast that with the likes of Google and Facebook, which have provided open and free products and relied on (our) data and unmoderated content to fuel their growth.

Closed and comparably expensive Apple may be, but it has escaped controversy and retained margin.

Now, however, as iPhone sales slow and earnings calls fail to impress, there are signs that Apple is looking to ad revenue from both its News app and the App Store to bolster revenue and regain some momentum.

There is no real outward sign – yet – that Apple’s use of our data will be anywhere near as aggressive as Facebook’s, for example. However, it does feels as though it is about to start moving away from its previous strategy for short-term gains.

Apple does of course need to shift its dependency away from the iPhone and make more money form services, but eroding its hard-won positioning is a mistake for lots of reasons. Here are three.

No free love

Facebook’s ability to be mired in controversy on a daily basis and yet still report strong growth is down to not just a combination of network theory, its acquisitions and maybe luck. It’s about pure, functional and not overly pretty utility.

Very few of your friends and family would admit to loving Facebook – or indeed Amazon or Google – these days, but it undoubtedly provides some of the glue that holds families, groups of friends and communities together. It does all of that without asking for cash up front too.

Apple can’t play the free utility card and if it wants us to pay a premium for its products and services, it needs to keep being aspirational, beautifully designed and – crucially – free of controversy around what it might be doing with our data.

Opinion and regulation

The continued strong financial performance of the tech giants might suggest that they can carry on pulling in cash, despite making some of the population feel uneasy about their power, despite some demographics not using them at all and despite a sense that at some point governments might decide to act against them – even if just to bolster their tax returns. However, history would suggest that at, some point, negative brand sentiment will hamper that growth.

There is also evidence that the internet might return to being a series of more closed and private spaces as a reaction to our current digital environments and the anxiety they create. Apple seems uniquely positioned to benefit if all or any of these things happen.

Innovation

At Curve, when we help clients find a foundation for their product innovation, we always start with the core beliefs of their company and whether those beliefs are recognised by internal and external audiences. It is very hard to get a whole company behind a new way of working or create new products if anyone is unsure about what the company stands for and what it should produce.

Revelations over the past few years would suggest that a lot of the tech giants have become detached from their original principles ("Don't be evil", anyone?) or lacked anything other than profit as a motive in the first place. Apple has lost its one-in-a-billion leader, but reasserting its core beliefs and the premium products it produces feels like the right thing to do, rather than chasing the rest of the pack.

In a sense, Apple is facing up to the same challenge that a lot of brands – and their agencies – face every day. Working out how to keep true to the principles that create brand love and growth over the long term while balancing that with short-term revenue needs is a daily item on any chief marketing officer's to-do list.

Maybe all that has happened is that Apple is the first of the tech giants to fall to Earth. It is probably the power of its brand that will ensure it has a softer landing than the rest.

Lawrence Weber is a partner at Curve

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