Now that we’ve heard all about the new iPhone 5, we can look back to a few weeks ago when Apple came up short on iPhone sales, sending everyone into a tizzy and causing Apple’s stock to drop in after-hours trading. But was there ever really a need to worry? Or were the markets overreacting?
BAV, the BrandAsset Valuator database and model, allows us to track Brand Equity, and analyze the future growth potential of key brands. The iPhone continued to grow its Brand Equity in FH2012, moving it to the strongest position in years. It is a highly differentiated brand, and continues to increase in relevance, esteem and knowledge. Together these make up the 4 pillars of Brand Equity. Like Apple, the iPhone itself is a super-leadership brand, and there are no immediate signs of erosion.
However, the Droid is quickly moving into leadership position. Both the Droid and the iPhone are highly differentiated, so the focus at the moment is on relevance (the measure of consideration) and esteem (highly correlated to loyalty). Over the last three years, Droid has increased its Brand Equity, with gains on both of those pillars. The iPhone has managed to keep – or grow – its gap over Droid, so weaker than expected sales are not indicative of any weakness for iPhone brand.
Though Differentiation is high for both brands at the moment, it is a hard metric to maintain strength on because in the tech space that requires constant innovation. But for now, the battleground will be on Relevance and Esteem in an increasingly saturated market. The challenge for both brands will be continuing to come up with Relevant Differences – innovations that matter. Both iPhone and Droid are doing this well now, and even getting better at it each year. But Apple must be careful with the iPhone. As the Droid continues to climb, the iPhone will face more challenges in maintaining its leadership.
Ensuring that advances are truly new and noteworthy is what will continue to set the iPhone apart from the competition and allow the brand to stay strong.