Seth Godin is wrong. (Or: iPhones, scarcity and reality.)

My first meaty conversation of the work week was about the iPhone. (Apple launched a new one over the weekend...in case you've been trapped in a cellar somewhere).

The person I'd been talking with had been in Seattle over the weekend and noted that "lines where everywhere. The Apple Store. The AT&T Store." Everywhere. Then he reported that Apple had sold 1,000,000 iPhones and 10,000,000 apps over the weekend.

It is pretty clear this person felt that the lines and the sales were a pretty clear sign of Apple's successful launch of the new iPhone.

I nodded in agreement.

Later in the morning I cruised over to Seth's blog and found his post on how Apple had messed up royally. I'm mean, really blew it. (He used the word "abysmal.") They should have given their best customers preferential treatment and rewarded early adopters, for example. Basically treat your best customers best.

Again, I nodded in agreement.

Now that I've had a few moments to reflect, I think they were both right.

*** The lines my friend saw and experienced told a quick, pointed story: "everyone" wants an iPhone. ***

*** Treating your best customers special, as Seth suggested, makes them more loyal and more likely to spread positive word of mouth. ***

Thing is, I think Apple's goal was to do the former, not the latter. They succeeded.

They didn't chase any loyal Apple fans/fiends away. No way. They are actually the ones rooting for their favorite underdog brand. They WANT the lines. The lines make them happy. Excited. Giddy.

Apple managed the scarcity of the iPhone kinda old school. They didn't use any of the newer thinking or technology suggested by Seth (and others). And I think it worked. Not in the kind of linear, Apple makes me feel special, so I'm going to love them more sorta way -- but in the visceral, gut level, OMG this thing crazy cool and crazy popular and I gotta have one no matter what sorta way.

This success makes the earlier adopters look even smarter. That's their reward.

This is not to say that's Seth's ideas are bad ones. They're great. They are just not right for Apple right now.

Besides, when was the last time an internet queue got someone excited enough to talk or write about it?

[UPDATE:] This post by Jon Dale demonstrates my point perfectly. A quote: "the only real problem with the iPhone is AT&T." Apple fans still attribute all the good stuff with Apple...all the bad stuff is someone else's fault -- even though Apple chose AT&T.

Comments

[Seth Godin]

I was there (six times, actually). Unlike previous Apple queues, this one was notable for the grumbling, the lack of esprit de corps and the insanely dumb way the whole thing was handled.

A guy in my office ended up spending 8 hours.

No, that's not what Apple intended. At least I hope not.

[Jon Dale]

Hey Jeff, thanks for the mention. Keep up the good work.

Jon

[Jeff Reynolds]

8 hours? No. A few (2,3,4) hours? Evidently. At least that's how it was orchestrated.

My main point is that Apple understands that their customers love the hype and the hope. And they deliver.

Unfortunately, there are casualties. But the net effect seems to be working for them. Will Apple suffer in the long run? Perhaps. But I'm not seeing it yet.

-Jeff

[Terry_h]

Finally a fresh look at this issue. I'm tired of hearing peoplel bash Apple. Their strategy makes alot of sense: build kickbutt momentum once a year and focus on innovation.

[Jason D]

since when is Apple an underdog brand? If they ever were, that wore out before the first iPod Shuffle hit the market. Apple is just microsoft with better marketing, after all, Apple hasn't invented anything new in over a decade, they've just taken someone else's work, tweaked it, and marketed the crap out of it. Not to begrudge them their success, but an underdog? hardly.

[Jeff Reynolds]

Thanks for the comment, Jason.

Clearly your definition of underdog is different than mine.

The definition I use is:

A company that is...

Ranked number two or lower in their industry.

and

Uses ideas and action to outsmart vs. out-spend their competitors.

It can be tricky with brands like Apple. They seem SOOOOO successful. They're big. They dominate some categories. Heck, it can be difficult to figure out what industry to stick them in. None of the preclude them from their underdog status.

Since you compared Apple to MS, you should be aware of some facts (from Yahoo):

Market Cap:

MS = $237 billion
Apple = $141 billion

Revenue:

MS = $60 billion
Apple = $30 billion

By my criteria, Apple is clearly an underdog. A small one? Nope. I suggest reading "Eat the Big Fish" to get an overview of underdog/challenger brands.

-Jeff