Last update - 02:29 08/02/2007
The User Experience / iPhone, schmiPhone - Apple's real news
By Michael Matthews
Unless you've been vacationing on a desert island, you probably heard about Apple's second biggest announcement of 2007: the iPhone. A device that will let you search the Web, make phone calls and listen to music is finally available.
Wait - the second biggest announcement? This device is being hailed as a real game changer. Isn't it what everyone's been waiting for? If it's the second biggest thing, then what was the first?
Somewhere hidden in the hype around the iPhone was the fact that the company officially changed its name from Apple Computer to Apple.
Okay. So what? How could that be important?
It's the most significant move since the introduction of the Macintosh itself. You see, Apple knows it's not a computer company anymore. It is focusing on something else. Something bigger.
Right, like movies and music? Well, not exactly, but Apple has seen rapid growth in its entertainment businesses. Since it launched the service, Apple has sold more than 2 billion songs via iTunes - about 40 songs a second in 2006. In 2005, Apple was the fifth largest music retailer. In 2006, it was number four, surpassing Amazon. Only Target, Best Buy and Wal-Mart sell more music than Apple. And in the first four months since it started offering video services, the company sold downloads of more than 50 million TV shows and 1.3 million movies.
So, should Apple now be considered a retailer, like Wal-Mart? Or a content provider, like Disney? Well, neither is the "something bigger" I'm referring to. Neither defines Apple, nor explains how it can so rapidly dominate market sectors.
What does define Apple? The customer experience.
Apple doesn't sell iPods, music, movies or computers. It sells experiences. It understands that simplicity is the key to consumer adoption, and that a user's first, simple experience drives reuse and repurchase. Apple understands that customers value the experience, not just technology. It is the feeling they get from using the technology or listening to music that holds value.
Apple's focus is on providing an integrated, innovative and intentional customer experience at all points of service. It is embedded into everything the company does. Customers with the odd glitch can make a private appointment at an Apple store with a real person. They can download movies and watch them on their computer or TV, or take videos with them on their iPod. They can even create and share their own content. All this is via the sweet simplicity of the Apple user interface: the cherry (or apple?) on top of the Apple experience. Even Steve Jobs waxed poetic about it in his Macworld presentation, talking about the new iPhone's ease of use versus smartphones.
Apple has been able to change the game not only because it has great technology, but because it provides a compelling experience. In fact, Apple seems to think first about the end-user experience and then develop its products, from the outside in.
This is unlike the traditional, utility-minded communications industry. It is no secret that communications is not the first industry that comes to mind when you think of exemplary customer service. The customer experience, if considered at all, was typically a by-product of internal processes. In addition, the industry has mired itself in messages of mediocrity, like "fewer dropped calls" or "raising the bar." Imagine if Apple were to say its iPod worked "most of the time" or "more consistently" than the Microsoft Zune. Providers need to rethink their business and realize that focusing on the customer experience will drive growth and adoption.
Suddenly the customer experience is an issue for service providers, too. Clearly, we are observing a transformation. Business models are shifting, and new competitors are moving in on providers' territory. They should take a lesson from the Apple playbook and find ways to give their users a compelling experience. They must shake free from being voice, video or data service providers in order to become experience companies.
Michael Matthews is Amdocs' chief marketing officer.