Brandstand: Is the I-Phone a victim of demi-Moore's Law?

Apple has officially declared a dip in market performance, caused largely by I-Phone sales in Greater China. While the stock markets reacted with an instant 10% dip in valuation, analysts considered this to be the manifestation of a larger problem. The phones thrive on a constant funnel of repeat purchases, currently rendered suspect due to incremental technological advances post Version 8, strong Android competition, better battery life, high price points and patriotic considerations (China only). A definite case of demi-Moore’s law, a situation experienced by many high-tech peers over decades.

Most readers will be aware of Gordon Moore’s Law, the processing power of microchips doubling every 18 months, a surrogate for most forms of technological innovation. More recently, Professor Bhaskar Chakravarti of Tufts University suggested a variation of this thinking, focussing on the processing power of the consumer market that will determine how quickly such expectations will be realised. He opined that technology’s impact in the market will most likely proceed at only half the speed predicted by Moore, thus the coinage of demi-Moore’s Law, creating its own sustainable equilibrium, factoring both manufacturer impetus and consumer appetite. In the case of Apple, the annual resurgence of the I-Phone suffering at both ends — insufficient experience upgradation and, of course, customer reticence due to the reasons mentioned above.

So, how can the I-Phone learn from demi-Moore’s Law to re-establish a continuance of demand? It must begin with an understanding of the changing technology customer, the gradual shift from feature-based ‘incremental’ to outcome-based ‘experiential’. Where the innovations in the ‘app’ eco-system are increasingly influencing the expectations from a device, as opposed to its stand-alone abilities. So, quite honestly, if the popular apps are running perfectly on existing equipment, then the performance-based reasons for upgradation stay limited, imagery the sole attraction. Solo strengths like camera power also reach their optimal peaks, competitive products delivering arguably superior solutions at better prices. The pure-play usage-edge was always the hero behind the Apple revolution, across products, when this diminishes all else gets questioned, including the much-revered user imagery.

A quick diversion to the airline industry may lead to some useful learnings, especially in the field of genuine co-creation. Every new aircraft that has been recently conceived by Airbus or Boeing is an outcome of experiential collaborations, from softer indulgences to the prediction of routes and traffic. The Airbus A 380 in the last decade was the solution to a Hub-and-Spoke world, moving forward from the MCLR (Medium Capacity Long Range) thinking of the Boing 777 or the Airbus A 330. Today, due to emerging Point-Point passenger preferences, an outcome of many factors, the focus is back on the A 350 and the Dreamliner Series, threatening to terminate the production of the Super-Jumbo. Seat-makers have devised new-age Premium Economy seating, especially for the Singapore Airlines 18-hour haul to Newark, a format not profitable for other sectors. While entertainment systems and amenities constantly keep pace with expectations of end-users and the airline customers, the unprovoked innovation doomed for failure. Absolute costs, in terms of ATF, naturally play a major part in the decision, from carbon-composite materials to optimal dimensions. A fine example of demi-Moore’s Law being the Concorde, a superior technology incapable of addressing the necessities of the socio-economic eco-systems.

The sustainability formula for the I-Phone will thus emerge from its deepest historical strengths, the intuitive nurturing of customer behaviour.  For starters, a deeper collaboration with the consumer ‘app’ universe, designing features that will make navigation more enriching. Being at the forefront of innovations in user expectations, customised across regions, while investing in AI research to successfully predict the next levels of usage. This leads to more-realistic upgradation cycles, driven by a culture of innovation calendars and not date calendars. Micro-segmentation strategies in Product Development and not the one-size-fits-all that’s worked so well till now, acknowledging the surge in individuality among not just the millennials. Finally, some best practices in pricing from other luxury categories, leading to multi-level portfolios in a continuum of affordable features. A lesson this time from luxury automobiles or even fashion, customers across price points comfortable with concept of range, a higher-end or lower-end peer an acceptable reality and not an aspirational pain-point. What helps in this thinking is the democratisation of the digital world — Facebook, Instagram and Twitter the very same across socio-economic layers, even Linked Premium a small price for multiple advantages.

Once a platinum member of Moore’s Law, Apple is today gingerly treading the path of demi-Moore’s law, seeking the equilibrium between technological ability and customer capacity. What has happened in China today may well be replicated in India, and other parts of the world. A renewed surge towards growth, the truest test for the brand’s legendary credentials in innovation.  

(Shivaji Dasgupta is the Founder of INEXGRO Brand Advisory and can be reached at: shivajidasgupta@inexgro.com)

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