Open vs. Closed: Apple Closes the Loop

Apple may be the largest public company, but it too is judged by a different standard, one defined by Apple itself and the company's ability to identify with Internet Pioneers and to enable them to identify with Apple.

Apple has mastered the concept of being the company with must-have products on college campuses and maintaining an incredibly high user satisfaction score. Apple's core strength is its ability to create and then meet a need. Anastasia Goodstein at Bloomberg Business Week noted that Apple's silhouette ads feature people of all ages but added, "Most brands will never be able to fully replicate Apple's zeitgeist moment with the iPod and its continued success with teens and young adults."

Who knew they needed an iPhone or an iPad? The brilliance of Apple is how its innovation has created new ways for people to enjoy their lives. And what is most fascinating is how the products are not designed for teenagers, they simply appeal to them as well as everyone else. Whether you're 6, 16 or well past 60, the odds are good that you own an iPod, iPhone and/or iPad. The Apple brand is ubiquitous. More Apple products are being sold each month than new babies are born!

According to a small survey of college campuses by Hudson Square Research's Daniel Ernst, the percentage of students who owned Apple computers rose from 33 percent in 2009 to 51 percent in 2010. Apple's reach into the mobile world of iPods, iPhones and iPads with cutting-edge designs and an almost cultish following brings a company word-of-mouth marketing that is hard to match. As a result, according to CNN Money, "Apple's share of student spending increased materially."

The Apple Store's experience-based marketing that allows potential customers to actually use the products is a key differentiator for the company. According to Jim Nichols at Forbes.com, "People who experience a brand through a store or other interactive program were more likely to positively identify with that brand." There is something universal and fun about Apple's approach to consumers that appeals to the young and the young at heart. But it is deeper than a faddish brand. Apple has loyal customers, and the base has grown larger and more loyal over time, while its designs have become hipper and more sophisticated.

"A computer absolutely can be sexy . The focus on design clearly appeals to those on college campuses. Apple aggressively markets on college campuses and uses campus reps to host workshops, throw events, and build relationships with students, faculty, and parents."
Jonathan Ive, former Head of Design
Apple

Apple's college reps collaborate with the Apple team to run marketing programs on campuses, from sales promotions to increasing awareness of Apple products. Getting students and parents at a moment when a computer is at the top of their mind is just part of Apple's approach. Combining the eye-catching and even, according to Wired, "classroom-inspiring design," Apple is clearly tops on most Internet Natives' want lists.

Apple is also at the forefront of a mobile revolution, and Internet Natives by their nature are early adapters. According to Brooke Crothers at CNET news, "Apple has become a mobile device juggernaut. …So, if it's more or less a zero-sum game, Apple's post-PC devices will continue to take share away from the diminishing PC juggernaut by bringing young buyers into the more profitable (for Apple) MacBook Air fold."

Conflict Between Open and Closed Systems

Apple and co-founder Steve Jobs were at the forefront of what Jobs' biographer Walter Isaacson calls "the most fundamental divide in the digital world: open versus closed." This divide continues to pit Apple's closed strategy against the open-source strategies of Microsoft and Google.

"The hacker ethos handed down from the Homebrew Computer Club favored the open approach, in which there was little centralized control and people were free to modify hardware and software, share code, write to open standards, shun proprietary systems, and have content and apps that were compatible with a variety of devices and operating systems. With the Macintosh, Jobs became the founding father of the other camp. The Macintosh would be like an appliance, with the hardware and software tightly woven together and closed to modifications. The hacker ethos would be sacrificed in order to create a seamless and simple user experience."
Walter Isaacson
Steve Jobs

Members of the Hooked Up Generation are confronted in much of their lives by the fundamental conflict between open and closed.

• They share their lives like an open book on Facebook, Twitter and Foursquare, yet they value their privacy and are reluctant to share their opinions and beliefs.

• They value the Apple promise of simplicity in both design and functionality, yet they are eager to pimp out their iPhones with an endless variety of customized cases, covers and stickers.
• At college, they tend to stay within their own closed campus environment with college friends, yet eagerly leave for months for a semester abroad, opening themselves to the world.
• They seek summer jobs and internships with tightly focused skills that can train and prepare them for a career, yet favor course curriculum with as much diversity and open-ended requirements as possible.
• They jealously guard and value their closest friendships, yet open themselves to a wide social network and eagerly move back and forth among multiple circles of friends.

Internet Natives, in many ways, personify the fundamental Microsoft/Google vs. Apple conflict between open and closed within their own lives. Looking toward the future, it's likely they will want to marry the two, find common ground in the conflict and allow both camps to thrive. For them and for all future generations, the key issue is whether Apple, or any company, can achieve the exceptional blending of technology and artistry that Jobs inspired at Apple and that is the ultimate reward of the closed loop.

In Isaacson's excellent biography of Jobs, Jobs suggests, "The reason Apple resonates with people is that there's a deep current of humanity in our innovation. I think great artists and great engineers are similar, in that they both have a desire to express themselves. In fact some of the best people working on the original Mac were poets and musicians on the side. In the seventies, computers became a way for people to express their creativity."

Internet Natives share a desire to express themselves, through their music, fashion, use of social media and almost all aspects of their lives. Yet, they also choose to avoid conflict. Perhaps it comes from the lessons taught them by Nickelodeon, which encouraged and empowered them to express themselves but also taught cooperation and equality. No company has captured the zeitgeist of the Hooked Up Gen as effectively as Apple. They grew up with Apple, as they did with Nickelodeon, as an embedded part of their lives and especially their online experiences. They are the key consumers of Jobs' innovations and the generation that will both reflect and carry on his transformative energy and vision.

Jobs, as co-founder and CEO of Apple and CEO of Pixar, was responsible for Apple computers including the Macintosh; iPod, iPhone and iPad; iTunes; Apple Stores and the App Store; iCloud; plus Toy Story and other Pixar mega-hits.

As pointed out by Isaacson, "Steve Jobs thus became the greatest business executive of our era, the one most certain to be remembered a century from now. History will place him in the pantheon right next to Edison and Ford. More than anyone else of his time, he made products that were completely innovative, combining the power of poetry and processors. With a ferocity that could make working with him as unsettling as it was inspiring, he also built the world's most creative company. And he was able to infuse into its DNA the design sensibilities, perfectionism, and imagination that make it likely to be, even decades from now, the company that thrives best at the intersection of artistry and technology."

This description of Jobs also provides a broad overview of what defines Internet Natives and sets them apart. They are creatively inspired. They reward innovation and uniquely embrace the intersection of artistry and technology. Yet, unlike Jobs, they are sensitive toward the realities and needs of others and sensible about the realities of the issues they confront and the pressures they face.

They are, like Jobs, the 21^st-century generation most likely to be remembered and written about a century from now.

Chapter 23:: Marketing to Younger Millennials – the Misunderstood Consumers