Apple’s leap into the new brand growth playbook.
Apple’s announcement yesterday was not about what they said, but more about what that means for other brands. They built a new brand growth playbook.
Apple had a big event yesterday where they announced a lot of new services - but no new products. They announced the new Apple TV Plus streaming service, the new Apple News Plus subscription, a subscription gaming service and a new Apple credit card that is physical, connected to Apple Pay and to My Wallet. All of these services, on the surface, sound like a natural extension of services that Apple already provides. But it’s so much more. It’s a moment where they move their revenue beyond products and into incremental and new recurring revenue streams.
Apple has just embarked on implementing a new brand growth playbook for their organization that found new ways to monetize their current consumer base and build new value propositions to bring new consumers into the Apple lifestyle. This action has made the Apple brand more valuable for their consumers as well as their business.
Let’s look at the revenue opportunities across these new services:
Apple TV Plus / Apple News Plus / Apple Gaming: These are all subscription-based services that all appeal to different segments within their target audience. By offering these solutions, with the high quality expected by Apple, you can see how millions of monthly subscriptions can begin to effect the companies top and bottom lines.
Apple Gaming: Not only does this service provide a subscription model, but it also provides the ability to offer in game upgrades, which has been a huge revenue driver for gaming companies like fortnite.
Apple credit card: This doesn’t need too much background. Credit card companies have been growing for generations. By taking a percentage of every purchase (and probably an annual fee at some point), Apple has the ability to create a new pay experience for their consumers through enhanced transactions and easy management.
Apple TV App: This is a step outside of their own ecosystem. By expanding their distribution of their content across Smart TVs and other streaming platforms, Apple now has the ability to reach a new audience and build revenues streams with folks outside of their core audience.
All of these moves are setting Apple up for a future where device purchase is stalling, but connectivity continues to rise. They are preparing for a future where they become the connective tissue for their consumer’s lives.
What did Apple do?
So how did they get there. With the announcement only yesterday, we can only speculate. Following their company’s progression over the last decade, we can see they took necessary steps to make the right decisions and safeguard against failure as best they could.
These steps aren’t specific to Apple, but something that every company should be doing on a regular basis to continue to enhance their consumer experience and maximize their revenue opportunities.
They leveraged trend data
The idea of seamless pay and transaction management through a device has been wildly successful in China with WeChat. By looking at these behavioral trends and transaction data of WeChat as well as their own Apple Pay data, Apple took a hedged bet in seeing the opportunity to own their consumer’s transactions.
They used consumer and interaction data
Much like analyzing Apple Pay data, Apple was able to gather and utilize all consumer and consumption data available to them to make informed decisions. Looking at how people consumed content and what they engaged with through Apple News, Apple TV and the gaming apps across their ecosystem, they were able to make sense of what their consumers want and what would be successful. Using these data points, Apple was able to craft services that would their consumers would be willing to pay for.
They optimized their current services
Using the a custom freemium model, they have been building consumer adoption of their core services of Apple TV, Apple News and Apple Pay for the last few years. This adoption gave them the opportunity to continually learn and optimize their services to better serve their consumer. This resulted in enhanced versions of these solutions that will require a subscription.
They found net new offerings
Looking at all the data from their consumers on their products and across their ecosystem as well as trends happening in the marketplace, Apple was able to find areas of opportunity for new offerings. Expanding into gaming and credit cards gives them an ability to get closer to different segments of their audience in new ways.
Who’s to say these bets will pay off for Apple? But we can say that they made their decisions to enter in a new brand world where experience is key. And they did by going through the appropriate steps to not only hedge against failure, but to ensure their consumers will adopt the new services. In essence, they established a New Brand Growth Playbook, finding new value for their core consumers.
How is your organization creating a new Brand Growth Playbook? Let’s chat.