Apple Pencil & Apple Watch : Apple’s Missed Opportunities

Just a couple of days ago, Apple launched iPad Pro and a very new gadget with it, the Apple Pencil.

The product has been welcomed with open arms and is very likely to be another commercial success for the company.

Apple Pencil however, along with Apple Watch, missed out on something else

apple watch
Apple Watch

But before getting into that, let’s ask another big and relevant question.

Why do big companies hardly launch completely new brands?

The answer is in any one of the two following reasons.

Firstly, it’s difficult to communicate and establish a new brand/ brand name. Difficult means two things here, expensive and time consuming.

For Apple, however, it’s not that difficult.

Why?

Because Apple is probably the strongest brand in the world right now. The amount of PR and Word of Mouth it gets is parallel to none. The entire world’s spotlight is currently on them.

No other company is enjoying as much attention from the consumers and media. Every time Apple launches a product, the news of it immediately goes viral. Millions of tweets, social media shares and online articles help Apple in spreading the word (Even this article is doing the same). Launching a product has become relatively less expensive for them because of the large number of PR they get and free word of mouth their product generates. Similarly, it also takes less time for them to communicate the news of any change because of the “virality” of the company’s products. They are in fact in the best position to launch new brands.

Apple Events : Apple Pencil
Apple Events

If that is the case, why didn’t they choose to launch new brands for Apple Watch or Apple Pencils (rather than going for brand extension)? It’s probably because of this other reason.

It’s easier to capitalize on the strength of an existing brand name. Using the strong brand name is safer because it will result in some immediate sales. That is why established companies often use their existing brand names in new products. For example, Unilever launched Pond’s Men in the face wash category. That product is definitely going to generate sales in the shorter term. But in the longer term, it might cause the brand to lose the feminine side of its personality and eventually hurt the brand.

Apple’s scenario isn’t like Pond’s Men. Apple Pencil or Apple Watch doesn’t hurt the brand in any way. But these products could’ve strengthened the image of Apple. If we again look at another example from Unilever we will see that the company doesn’t use the Unilever name on Clear, Sunsilk, Dove or any other shampoo they market (It’s not Unilever Clear or Unilever Dove). All of these three brands have very strong reputation and when people learn that they are from the same company, their respect for and trust in Unilever grows.

And that is the opportunity Apple missed.

Which of the following brand name do you think is stronger?

Apple Laptop Macbook
Apple Smartphone / Apple Phone iPhone
Apple Music iPod
Apple Tablet iPad
Apple Watch Pluto (Not a real name, just an example)

What did the word iPod mean before Apple launched the product? Probably nothing. But now it has become the generic word for portable high-capacity music players. Same thing happened with the word iPad. iPhone and Macbook were different as they didn’t try to become generic names. Rather they had created their own distinguished identity and developed strong brand images. But what about Apple Watch and Apple Pencil? Are they going to have similarly strong brand images?

It’s unlikely.

Because the names aren’t right for that kind of success.

These names are too long and generic. Length of the name is important because a brand needs a nickname which the users would fondly use and make popular. Apple Watch has three syllables and Apple Pencil has four. Popular nicknames for brands usually have less than three syllables; good examples are Nike, Coke, McD. So if a user want to make the name smaller, she can take the Apple name out of it. But then what she will have left is just a generic word; watch or pencil. And Generic words hardly work as brand nicknames.

Apple Watch is already being called the iWatch; a term which Apple can’t legally claim because another company had trademarked it. So the company is stuck with a nickname it can’t use. However, What Apple could’ve done was take control of that situation by inventing a new name for their smartwatch.

What if Apple had called the watch something completely different, like “Pluto”. People would’ve initially questioned the logic behind choosing such an out of context name. But eventually, a group of people would’ve started supporting it proudly by saying that “I got myself a Pluto” and the name would’ve caught on. And if the name became popular, users would’ve started using it as a generic word, like “Apple’s Pluto is awesome, but X Company has also launched their Pluto. Which Pluto is better?” When a brand name becomes the generic term to describe a cateogry including competitors’ products, who do you think benefits the most? Who benefited the most when Sony’s Walkman became the generic term? Wasn’t it Sony?

Similarly, Apple had the opportunity to own the generic term in smart watch category. But sadly they didn’t try.

They could’ve done the same thing with Apple Pencil. But as they haven’t, they have also missed out on the opportunity to create a nickname for this product. It’s now up to the users to decide what they want to call it. They might call it the iPencil , or they might even start calling it Apple’s Stylus.

Or some other company might come and introduce a name that would become the generic term in this category.


“Marketing Rants” is a new series in Marketing on the Mark. Other notable series includes “Advertising Hacks”. Subscribe today so that you never miss a post. 

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    • SEGUFTA MAHI M.

      As long as they can capitalize the name “Apple”
      why would they take the risk of introducing new name ? I feel FMCG and electronics markets are completely different.
      Will tell you two more different reasons later.

      • Kazi Mofrad

        1. Using a strong brand name in everything can harm a brand in the longer term. IBM also was a leader in technology (Computer) and had very strong brand image in some regions. They sold their Computer division to Lenovo recently.

        However, Apple is in a much stronger position (because of distribution reach and added Word of Mouth). They could’ve further strengthened it with the new products. Their stylus is different from what people are used to and this stylus might lead to the creation of a new category like “Smart Stylus”. They should’ve had a name with the potential to own this category.

        Think about it in this way, when they launched iPod/ iPad / iPhone, the world felt that a completely new product has entered the market. (In reality, iPod was the second mover in high capacity portable music player.) But did you feel the same when Apple Watch/ Apple Pencil was announced?

        2. The risk of introducing a new name is much lower for Apple, as discussed in the article.

        3. FMCG and Tech markets are totally different, I agree. But the Power of Brand is important to both. FMCG require multiple brands because consumers like to have options and switch frequently. Tech companies need multiple brands for many reasons, one of them (which is relevant here) is consumers’ need to have a unique nickname. In the gaming world, the contest is between Xbox vs PS vs Wii, not Microsoft vs Sony vs Nintendo.

        Another reason is that the tech users always look for new products. For this reason, every tech product has a limited and relatively shorter (than other industries) lifespan. So when a tech product dies, the brand takes a major hit. And if the company name is part of that brand name, the company also takes part of that hit. Examples are Kodak (was leaders in Film Camera), Nokia (from cell phone market leader to out of market in 7 years).

        It’s tougher for tech brands, that’s why they need to be extra careful. Who would’ve guessed (in early 2000) that Nokia would cease to exist in the cell phone market by 2015? Market moves fast and the companies need to be forward in both technology and branding.

    • kevin

      Thanks for making me think, I enjoyed reading this.

      Does Kleenex brand benefit from the category nomenclature? Does Xerox or Walkman? Nope. When they’re reduced to a label for all similar products, the source product loses.

      When the market is willing to call *anything kinda like your thing* by your brand name, it means you’ve slipped into commoditization. Not good.