Apple Surpasses Microsoft
By Barbara Gengler
Microsoft, which has been slow in responding to Apple’s advances, was recently taken by surprise as Apple edged past the software giant in market capitalization.
Recently, Apple emerged with a market value of roughly $222 billion compared with Microsoft’s $219 billion. Apple spearheaded into the second highest-valued American company directly behind Exxon Mobile, which was valued at $278.6 billion.
Enderle Group analyst Rob Enderle says against Microsoft, Apple funded better, executed at a higher level and marketed the benefits of the product more successfully.
“Microsoft actually had what should have been a more attractive service, retailers liked them better and Microsoft had a more robust product, but Apple out executed them on marketing to an incredible level,” Enderle says. “Oh and Microsoft chose to fight Apple on Apple’s turf by bringing out a hardware device and that is always a really bad idea.”
The Mac vs. Windows campaign directly targeted the Vista launch problems, kept them front of mind even after they were fixed, Enderle claims, adding that Microsoft’s failure to market the improvements drove the positive result for Apple.
“Apple’s marketing program took reports of problems with Microsoft Vista and blew them out of proportion in an attack worthy of a first-tier political campaign,” Enderle says.
The Mac vs. PC campaign ran directly into the Vista launch and is recognized as being one of the most effective of its type. Apple not only helped slow sales for Windows, but Vista also never really recovered while Apple tripled their market share, according to Enderle.
Apple competes hard, likely knows more about many internal programs going on in competitors’ firms than related executives do and has the ability to develop and execute a strategy that is repeatedly successful against these competitive threats, he says.
“The iPod, AppleTV, iPhone and iPad were all big risks and only the AppleTV didn’t meet expectations and they haven’t stopped funding or developing it,” Enderle says. “Microsoft, on the other hand, takes few big risks, tends to under resource those it does and then wonders why these smaller risks are unsuccessful.”
He pointed out Mira was ignored, Origami was unfinished and Windows Media Server was crippled and underfunded as was Media Center, Media Extenders, Portable Media Center, Windows Mobile, Zune and Chrome Effects. And while Microsoft has often come up with ideas first, Apple generally executes better and walks away with the benefits.
“Apple enjoys lower customer churn, higher margins and owns the most profitable segment in the PC market,” Enderle says. “When Steve Jobs brought out the iPhone, retained control and drove the same customer focus, subordinating the needs of the carriers to the needs of the phone users, Apple became the most profitable vendor in this segment.”
Microsoft has increased the complexity of its customer mix and often seems unable to differentiate between the conflicting needs of users, IT shops, retailers, OEMs and government buyers, Enderle says, adding the end result is that the related products have a tendency to miss the needs and expectations of all groups because there is no real focus on any one group and users’ needs and expectations are often in conflict.
“If Microsoft wants to move ahead of Apple again, they have to cease accepting failure as an acceptable outcome and either resource efforts to levels where they can’t fail or recognize that if you aren’t going to play to win, there isn’t much point in taking the field in the first place,” Enderle says.
Separately, he gave the example of how Apple actually torpedoed the HP MP3 player by licensing the iPod to HP and then reneging on all of the promises they had made.
“They underpriced the HP product, wouldn’t let HP use any color but white, and wouldn’t allow transcoding even though they had indicated all of these were possible initially to close the deal and the contract locked HP out of doing their own player until Apple had locked up the market,” Enderle says, adding it was “one of the dumbest things I’ve ever seen HP do and one of the smartest from Apple. If Apple were to do something similar today they’d have anti-trust problems up the wazoo (technical term).”
While Microsoft still leads Apple in sales, there is every likelihood that Apple’s income could surge past Microsoft’s in the next few years.
Apple CEO Steve Jobs took the stage during the company’s Worldwide Developers Conference in early June. Jobs previewed the successor to its smart-phone line, the iPhone 4, which features a faster processor and videoconferencing, which the company calls FaceTime and includes a bigger battery and two cameras. As it continues to deliver its innovations, Apple has become the dominant technology company of this decade.
Jenn-Air cooks up webisode series to promote new kitchens
Image courtesy of JennAir
By Ken Liebeskind
What’s cooking online these days? How about 11 new webisodes promoting Jenn-Air kitchens starring a celebrity chef and contestants in a cooking competition.
In the Kitchen webisodes debuted March 26, were created and produced by RedLever and star Tori Ritchie, the celebrity chef, who has hosted Ultimate Kitchens on the Food Network and cooking segments on the CBS Early Show. Ritchie introduces the contestants and oversees their preparation of gourmet meals that are served to their special guests. Viewers vote on their favorite contestant, who will win a Jenn-Air kitchen prize. One of the viewers will win another Jenn-Air prize.
The webisodes run five to seven minutes each and all 11 play on the site simultaneously.
Richard Shore, RedLever’s chief operating officer, says the webisodes were shot at a Los Angeles studio and follow a standard episodic format structure: “Act one introduces the candidates, the second act is a set piece in the Jenn-Air kitchen and the third is in a dining room where the contestants throw the occasion on an intimate table setting.”
RedLever pitched the idea for the webisode series to Digitas, Jenn-Air’s agency, which is using them as an online element of a campaign that includes magazine ads and live events.
The webisodes offer brand integration, with the meals prepared in a Jenn-Air kitchen with Jenn-Air product mentions from Ms. Ritchie. The scripts were written by RedLever with guidance from Digitas.
Digitas was drawn to the webisodes by a 25 million per episode audience delivery guarantee by the Adconion Media Network, RedLever’s parent company, which runs an ad network with more than 2,000 sites. The webisodes run at the home site and in banners at sites in the Adconion network. Digitas selected sites that behaviorally and demographically fit the Jenn-Air target, according to Justin Newby, vice president group director at Digitas. “We’re not just throwing it into the air and hoping it works, there’s a guaranteed performance in place,” he says. “We hope as many people as possible watch the whole series, so it plays out like TV programming.”
The 25 million isn’t a viewer number, but an impression number, he notes.
“We have a proprietary ad server and in-house technology that provides us with the targeting capability to identify the right audience. We use third-party data and Comscore overlays to look for the appropriate sites within our network,” adds Nick Higgins, Adconian’s director of global video.
The webisodes are the key element of an online campaign that also includes Flash and rich media units at HouseBeautiful.com, BonAppetit.com, Epicurious.com, PointClickHome.com, Kitchens.com, FoodandWine.com and Yahoo. Magazine ads have appeared in national and regional publications, including House Beautiful, Food & Wine and Texas Monthly. Live events including the Architectural Digest Home Design Show and the Pebble Beach Food & Wine event have also been used. “We’re looking for ways to create the brand experience and engage the target who loves to cook and entertain,” Newby says. “It’s a 360-degree program and the webisodes are the most important component.”
Adconion declined to discuss the specific sites or the number of sites that will guarantee the 25 million impressions. The number of webisode impressions that have been served during the first weeks of the campaign are unreported. “We do not disclose campaign results, but the results are positive,” Newby said.
The webisodes will continue to play through 2010 with a contest winner announced in July.
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