“Apple Computer Inc. generates buzz for its new products by obsessively enforcing a strict secrecy policy. But the policy can sometimes leave partners, big customers and even employees in the dark,” Nick Wingfield reports for The Wall Street Journal.
“Apple, based in Cupertino, mostly keeps its plans for new products to itself. It rigidly compartmentalizes itself so that even its own employees do not find out about coming products. It has fired and later sued workers who leaked information about unannounced products. More recently, it has filed suits against Apple-enthusiast Web sites that publish tidbits about the company,” Wingfield reports.
“While many tech companies assign internal code names to products, Apple goes a step further. It often gives different departments dissimilar code names for the same product, current and former employees say. If a code name leaks, Apple can more easily track down the department from which the leak originated,” Wingfield reports.
“This closed-lips approach is a key underpinning of Apple’s marketing strategy. To the envy of many in the tech industry, co-founder and Chief Executive Steve Jobs uses secrecy expertly to amplify interest in Apple’s products. Regis McKenna, a veteran Silicon Valley marketing executive who worked on some of Apple’s earliest product introductions, says he marvels at how Apple continues to stimulate so much public curiosity about its coming products,” Wingfield reports. “‘There’s a great deal of mystery and speculation about what it will be,’ said McKenna. ‘That’s created a marketing aura for them.'”
Wingfield reports, “The mystery helps Apple attract crowds at its retail stores and generally garner much more visibility than its relatively modest advertising budget would suggest. Apple spent $287 million on advertising last fiscal year, compared with $995 million for Microsoft and $1.1 billion for HP, according to the companies’ filings with securities regulators. While new wares from Dell Inc. or HP rarely get front-page treatment, Jobs has repeatedly appeared on the covers of Time, Newsweek and Fortune showing off a new iPod or Macintosh computer.”
Full article, including behind-the-scenes info on the “Apple iPod by HP” fiasco, how Apple’s secrecy negatively impacts corporate customers and other big technology purchasers, and much more, here.
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Related article:
Apple acknowledges corporate IT workers’ frustration over secretive product roadmap – June 20, 2006
“Apple spent $287 million on advertising last fiscal year, compared with $995 million for Microsoft and $1.1 billion for HP”
Apple needs to be spending $1.1 billion in advertising each year! They’ve got over $8 billion in the bank and are a totally debt-free company. Come on! What are you waiting for?!?!
AAPL up over 5% at the time of writing.
About bloody time to!
(I know, it’s quite off the subject.)
Why does Apple get so much more interest and press on its new products than Dell?
Maybe it’s the products.
Apple’s current strategy is brilliant and has generated huge sales thus far. However, unless Apple changes, it will never see significant gains in computer sales. Big businesses simply put cannot work with a company that announces everything last minute. it’s just bad business
Ford is taking the heat for promised R&D and innovation on the hybrid front because of broken promises.
Microsoft does the same thing. They think they have this bitchin idea, they get all excited, and then they figure out, no one cares, it can’t be done (idea exceeds reality and enginereeing posibilities) and there is no market – hence Vaporware.
If you never say anything peoples expections are lower and are always exceeded at the time the magical words exit his Steveness’ lips:”Available today”
This is bunk. The number of people that give a crap about the secrecy factor is relatively small. This is nothing more than trying to prevent their competition from knowing what they are doing.
Furthermore, Pennypacker is right. Correctly setting people’s expectations is a great way to do business, and especially for Apple when you consider there may be no group that has loftier (and many times unreasonable) expectations than Mac users.
Yeah…so that´s why Apple has a humongous 2% computer market share – secrecy!
Keep up your secrets Apple and soon you will have a 1% market share.
Apple gets so much free publicity because its products surprise, and don’t disappoint. They arrive on time, because their arrival was never pre-announced.
Apple does the exact same thing during its earnings conference calls. For the past 8 quarters Apple has exceeded earnings estimates 8 times (sometimes by as much as 50%).
Management’s revenue guidance for this quarter is virtually the same as Apple reported last quarter. Yet, Apple didn’t have a full lineup (excepting PowerMacs) of Intel powered computers last quarter. One of the computers that wasn’t Intel powered last quarter was the MacBook, Apple’s highest volume computer.
Look for Apple to soundly beat the Street’s earnings estimateswhen they report on July 19.
Secrecy is good.
I agree with what’s been said already, but don’t forget about announcements affecting sales. For instance, who would pay three or four hundred dollars for a 5G iPod if Apple announced it was coming out with the new 6G true video iPod in sixty days? Otherwise, Apple would have to markdown the prior revisions across the board, not just at the refurbed section at the apple store website. Apple’s secrecy ensures that people are buying its existing products right up to the time that Steve tells an audience that there is ‘one more thing’.
Bull – everybody knows don´t buy any Apple products starting 3 months before January Apple fest and (now) August Dev meeting.
If you buy an Apple product prior to those meet ups you know you will be kicking yourself in the head when those two dates roll around and something bigger and better is released.
The unwashed have identified themselves yet again.
Yeah…so that´s why Apple has a humongous 2% computer market share – secrecy!
Keep up your secrets Apple and soon you will have a 1% market share.
Two years ago Mac share was 1.7% (worldwide). Today it is almost double that. Agreed 3.4% isn’t very much, but don’t be so naive as to think it will stay there.
Each 1% increase in Mac share cost someone else 2,000,000+ computer sales – THAT YEAR. If Apple increases Mac share 1% for each of the next 3 years, it will cost someone 8.400,000 computer sales. The thing is, most analysts are projecting Mac share growth faster than that.
I’m amazed by the article. I mean, who is this old man who’s never heard of security badges? He writes for the Journal, but has he ever visited a Fortune 500 company?
It just seems really out of touch to me.
Gregg – check your facts I think you are confusing US market with world market. World market for Apple is around 2% and dropping.
“Each 1% increase in Mac share cost someone else 2,000,000+ computer sales”
Not necessarily. If total market sales rise others don´t have to be effected.
It´s like Apple has sold more computers, but its market share has dropped.
And a “1% increase in Mac share” – would mean a 100% increase in Mac sales. Unrealistic, impossible.
Hey, Wally, Dell’s share of the World market isn’t all that high either.
Let’s discuss Apple’s share of the education market or the newspaper business or the graphics market or the MP3 player market.
You found a lower number, I found several higher numbers.
What’s your point? HP has a higher share and they are losing money on their PC sales. IBM had a higher share and they got out of a money losing situation. Dell’s growth has stopped and their once low profit margins are being lowered even further.
Let’s look at profit as a percentage of sales. There’s a number no other computer company can match.
Don’t pull Microsoft out of a hat either, Wally. They lose money on the only computers (X Box) that they make.
Big Al – we´re talking Apple market share, Big Al, and facts are facts, I let you do the twisting and adjusting and fudging to suit your ego.
This is all BS, ‘Swift Boating’ of Apple one might say. HP don’t announce new consumer products three months before they launch, Dell change their products every day without announcing it all according to what parts they can get for the lowest prices on the spot market and what they have in stock.
Sure some computer companies announce what they are going to do in advance, these are mostly software companies like Microsoft and Oracle and such, they sell software for other peoples’ hardware – APPLE DOESN’T. Some hardware makers announce things in advance, not many but some, these are generally server products that exist solely to run software by other people, that can’t exist without software made by other people. Apple doesn’t really play in that game.
And all this “spend more on advertising”, go away already. If I see a product that is advertised widely I DON’T BUY IT. Why, because I’ve been in business all of my life and I know advertising is real expensive. Just today I was reading an article saying cell phone carriers spend $275 – $450 to attract each new customer. You know what, cell phones are crap. The one I had twenty years ago worked better than the one I’ve got today. It was bigger, it didn’t have a camera but I could hear what peeps were saying and they could hear me.
If Apple spends a billion a year more on advertising that’s a billion less on making good stuff and more winkers buying it and whinging about quality, that’s called a viscious circle. Steve Jobs contributions are maybe worth $200M in advertising dollars, Time magazine cover etc. All those product placements that just happen are worth plenty of bucks, if those store fronts were hoardings they cost megabucks. It’s clever stuff, just like the kit they make and software they write, so clever no one else can do it for the price.
Funny thing is it seems to me that Apple is doing just fine. They are doing the good deal, happy suppliers, happy staff, happy shareholders and happy customers. Let’s keep it that way.
Gandalf: “You know what, cell phones are crap. The one I had twenty years ago worked better than the one I’ve got today.”
Right you are. That’s why I still have my old Motorola analog cell phone which reliably gets better reception than my friend’s digital phones and offers better audio quality.
Steven here –
I see you are equating popularity as good or superior… That is, you are implying that because M$ dominates market share, it is a good or great product.
I’d like to point out that the Spice Girls, Mili Vanilli and Britney Spears were all popular and dominated their markets. But just because they dominated their markets does not mean they were good – they all blow, and still do.
M$ may have massive market share, but I would step lightly with that fact… For the majority, people buy computers in large part based on price, not value, and not due to a better OS, best service, least hardware failures (all places Apple ranks #1), etc…
Apple sells value and a great/efficient computing experience. To repeat a much known analogy, Lexus, Mercedes or BMW do not have as much car market share as Apple has in the computer industry in the U.S. (3.6% according to IDC’s last quarter check).
If you think Lexus and it’s GS300 sucks because Lexus only has 2.7% market share, well, that’s not even logical, not even close.
Equally, if you think Macs are lame because they hold a small market share, you are more than bias, and not coming to the table with an equitable argument.
I more than welcome a rebuttal, provided it isn’t the angry PC flamer-type guy, but something in the range of convincing and thought out would be nice.
“Lexus, Mercedes or BMW do not have as much car market share as Apple has in the computer industry in the U.S. (3.6% according to IDC’s last quarter check).”
So you are agreeing that Apple is an overpriced luxury item? Cool – glad to see you appleheads admit it.
The car thing is such a stupid analogy.
The car market is broke up into lots of segments -economyn, mid size, luxury, truck, etc. each competing for their share of that particular market. A computer is a computer when it comes to counting market share.
All this makes his Steveness sound more and more like Willy Wonka.
What is wrong with that?
Do you have a problem with Willy Wonka!!!!!!
Remember Steven – Lexus is owned by Toyota which has a huge market share.
Mercedes owns Chrylser, Smart and parts of other car companies – which adds up to a very large share of the auto market.
BMW also owns Mini. (Plus more?)
Apple owns Apple.
Le European – “The car market is broke up into lots of segments -economyn, mid size, luxury, truck, etc. each competing for their share of that particular market. A computer is a computer when it comes to counting market share.”
There are different computer product segments as there are different car segments. The xServe is not like the MacMini. The statistics are shown as total sales per manufacturer in the overall car sales number, I believe.
Car boy – “Mercedes owns Chrylser, Smart and parts of other car companies – which adds up to a very large share of the auto market.”
Apple owns iPod, arguably a computer product; Apple owns FileMaker, Shake, FinalCut Pro, … not exactly like your car manufacturers. Then again, the car manufacturers don’t stick to cars, either. GM has GMAC, a chain of Retirement communities in Florida, … To be lawerly about it, you’re correct; but the example is illustrative of the flagship products from those companies. Only recently did Mercedes merge with Chrysler, for example.