Enigmatic acqusition: Apple to buy Beats

Quote of the week

What are the key factors that make this acquisition of a headphone maker by the iPhone company so unusual?

"This would be the biggest ($3.2 billion) deal ever by Apple, the first significant acquisition by (its new CEO) Tim Cook, and the first where Apple would likely want to keep the brand going, rather than absorb it." 

- Jan Dawson, Jackdaw Chief Analyst 

Blackberry Marketing and Cash Value

Remember S&H and other store stamps that had a value other than cash, like "mills?"

Today companies still substitute benefits or free accessories that have some specific proprietary value, but little or no cash value. As long as the two are distinct, there's no problem. But intentionally or otherwise confusing some dollar value other than the real one for cash value is a big marketing mistake.

Blackberry has responded to its latest high-profile service outages by offering a consolation to their subscribers: for their inconvenience, they get $100 in free apps like poker and "Bejeweled." But wait, there's more. RIM also throws in free technical maintenance for a month, which is a value of, well, let's say it's not immediately obvious on their web site. (And just how much do Blackberry owners expect to call technical support next month in the event of a problem, say, another outage?)

The lesson to learn here, as RIM flounders in their marketing efforts, is that marketing is not a standalone entity. It needs to be integrated with the business. When the purposes of the marketing and accounting or other departments collide, you often get a solution that does badly for both.

In this situation, if RIM offered a second option for a discount on next month's phone bill for example, the dollar value would certainly be lower than the one for free apps and support. What would the value of a third option for getting a check in the mail from RIM be? My guess is about $10. That's the real value.

Does RIM really want to address the legitimate concern and inconvenience of their subscribers resulting from significant outages, even down to the phone's daily alarms and reminders not working, with a consolation that has a real value of $10? Of course not. But there's a left-hand, right-hand conflict going on between the business execs and the ones carrying on the dialog with the customer (marketing) that is deeper than this one incident. As the iPhone 4S and steady developments by Android encroach even further on Blackberry's base, RIM is pouring gasoline on the fire.

Do-not-call - sometimes

Did you sign up for the national do-not-call list when it came out a couple years ago? I can't say whether it really made a huge difference or not. My wife has always seemed to get most of the sales calls for some reason. Are you on any do-not-call lists you didn't even know about? Say, for example with prospective employers?

As much as the big tech companies are known to compete for and lure over competitors' top executives (i.e. Mark Hurd and Leo Apotheker), it's hard to believe that there is a need for the Department of Justice to eliminate gentlemen's agreements between them when it comes to poaching other companies' employees in general. But six of the biggest names in tech, including Apple, Google, Intel, Intuit, Adobe and Pixar, recently agreed, with a little encouragement from the DOJ, not to continue their no-cold-call-recruiting arrangements.

In times of record unemployment, this sort of collusion may sound like an urban myth (like Congressman Phil Hare considers the national debt). No, big companies really have been playing by these rules in their hiring. Contrary to the free market they esteem for their products and services, this defensive agreement has been considered a mutual advantage among the big players. It's an even bigger advantage to sit on boards of more than one of these companies, or have your CEO sitting on another firm's board, but that habit has come under scrutiny recently as well.

Along with the new corporate hiring glasnost, according to a new SIM survey in eWeek, most executives plan to increase IT salaries in 2011, with a specific focus on business intelligence.

Revolution in Words

The way we use words was revolutionized by Johannes Gutenberg. Replication and distribution of ideas took on a whole new meaning. But the process actually wasn't Gutenberg's idea. It was the Chinese who first had the idea of duplicating a pattern with a press, but limited its use to copying silks and not books.

Is the iPad a revolution, or is it just duplicating a pattern?

Interestingly, Gutenberg died a financial failure, the object of numerous lawsuits for the rights to use the press. But he was successful by all counts in changing the world. His first printed work, the Bible, is the number one bestseller of 2010 (and every year).

~ Game Changers in Presentation History

Johannes Gutenberg, movable type printing press - 1394-1468

Christmas Cheer and Marketing - Good, Bad and Ugly

In the early darkness of the morning after Thanksgiving it begins. The promotions leading up to Christmas are a harbinger of the general economy and the December campaign can bolster those lagging year-end figures, particularly in retail.

So effective marketing in the competition for those final discretionary dollars of the year is critical. Although the zeitgeist is one of generosity, the board of directors is looking up from the balance sheets and saying "You know that last dime? We need it." Are there marketers out there who are successful in appealing to both the rock and the hard place?

Some companies have seized the opportunity to be Christmas-friendly. In a recent survey of that category by John Stossel, the pole position is held by Bass Pro Shops, followed by Cabela's, Lands End, K-mart and Sears. Other businesses are more inclined to be snowy, frosty, wintry, festive, etc. in hopes of appealing to Obama's "no longer Christian" nation. Retailers will have all of January to figure out whether they offended the right people.

Here are some other pre-12/25 strategies you may be seeing out there lately - see if you think they're effective:

Good
- Megabus is giving away 100,000 free seats on their Facebook page on trips booked for 1/6-3/20.

- Apple has a free Christmas music download set (20 songs) on iTunes.

- ELF Cosmetics is offering free shipping on any purchase.

- Joseph A. Bank is offering $550 suits for $180.

- Cepia's hot new "Zhu Zhu Pets" are under $8.00 each (and the rumors of toxicity are false).

Bad
- Verizon doubled its early-termination fee for smartphones last month.

- Joseph A. Bank evidently clears at least $370 on its normally $550 suits.

- Today, stores sold out of Zhu Zhu Pets within minutes of getting a shipment, pushing the eBay price up to $35.00.

Ugly
- The girls in Gap's seasonal ad saucily tell their parents they won't wear that (old stuff) anymore, and if they don't like it, they can "talk to the moose." (The only sign of seasonal cheer at the brick-and-mortar store reads, "Do the moose. Shake your caboose.") The moose video has already generated some spoofs on YouTube.

- Mitsubishi is running ads with the jingle, "We wish you a Mitsubishi."


On that note, I want to wish all of you a very Merry Christmas. God bless us, every one.

______________________

Some of you have asked about the Discovery Channel's "Everest: Beyond the Limit" with John Golden's amazing summit climb described in my 10QatAtime interview with him in October. The update is that the episode was delayed but is now scheduled for Sunday 12/27 - see the link here.

Just Jott A Voicemail To My E-mail

When the iPhone came out, one of the spiffs Apple touted was the ability to organize your voicemails like e-mails.

But what if your voicemails came to your inbox and you could read them, hear them, forward them or archive them? That might be enough to switch to AT&T... or maybe not. Save that dilemma for another day - you can do it with Jott.

You can also transcribe a reminder to be sent to your phone or computer on a given date, or transcribe notes in the car on your phone as you're coming back from a meeting. In the messages I've sent so far the voice recognition works remarkably well, although I haven't used it long enough to be the poster child for Jott.

But maybe you will. Try it out here.

Video on Demand and a Worthy Competitor (Redbox)

Have an opinion on downloadable video? With the introduction of Apple's online video offering, Techdirt is running a poll for market input on how Netflix stacks up against the iPod company's foray into the growing market.

In the world of physical DVD's, the innovative folks at Redbox have offered to give you a free rental just to try them out. You can find their kiosks all over, from Walgreen's to Wal-Mart (parent company: McDonald's Ventures). As of late last year, they had over 6000 locations - more than Blockbuster - and you can return the disc at a different location than you rented it with no penalty.

Best thing about the Redbox business model - every rental is $1/night. Can't beat it - except free, which you can get by entering "dvdonme" when you check out.

If iWoz the CEO...

So if the other Steve (Wozniak) of Apple were the CEO, he says he wouldn't have dropped the price or offered the store credit rebate on the iPhone. Of course, he bought twenty of them that he's eventually planning to give away.

Actually some people are now more upset with the recent change to their AT&T bills to "simplify" them by taking off call detail (at no extra charge)! "Press one to continue in English..."

I think the marketing team at Apple could have done better.

Pour another cup of coffee for the other impending rollout -- Halo 3 hits the shelves at midnight tonight in the US after three years since the last version. Microsoft is expecting a $150 million return on their $25-40 million investment within the first 24 hours. A million copies are pre-ordered at $60. For reference, the iPhone went to 1 million units in two months and nine days. Stay tuned...

Help! My iPhone is Depreciating by the Minute

For all Steve Jobs genius in rolling out Apple's newest avatar, yesterday's discount announcement for the iPhone is his second misstep in as many months.

The first was lining the iPhone up with AT&T over Verizon and sparking a craze of hackers making headlines by "unlocking" it to work with other service providers.

Now for pricing strategy... Normally, a big price cut should put some wind in your sales as they begin to lag. But when you do it right on the heels of most of your most loyal customers jumping on your bandwagon, it could have the opposite effect. Dropping the iPhone's price by 30% yesterday looks strangely desperate. iPhoners are going to be dialing Apple off the hook with 30-day return questions.

Does Steve have an inside line on the rumors around the gPhone? If not, he's provoked enough suspicion in the minds of remaining prospective phone buyers around stability of the whole market to make them say, Whoa -- put on the brakes - I was hoping to get something for $600 that would be all-that for years, not weeks!

The Luddites are in high spirits today.

UPDATE: Steve Jobs issues an open letter and $100 credit (on another purchase) to iPhone owners today.

iOpener

This past week finished off on Friday with the "iOpener" event, one of the city's biggest annual technology executive events, hosted by ic stars at the Chicago Cultural Center downtown. Among the topics at the event was the need for creativity in technology, especially its value in the new high-tech workforce.

Peter Drucker said there are only two real functions of a business; marketing and innovation. Innovation is the point where creativity stops being a clever idea and starts showing a return on investment. But creativity is where the initial value lies in a world where access to technology resources is becoming increasingly ubiquitous.

Michael Krauss, President of Market Strategy Group and member of the Mayor's Council of Technology Advisors, moderated a collaborative discussion through the audience at Friday's event to create message points on why 18-25 year olds should choose IT as a career. The results of the discussion will be published in an upcoming paper entitled, "Move the Future," in response to the continuing decline in enrollments for technology-related education and the increasing difficulty in finding people for IT positions.

The tools to make the next facebook or a photobucket or a digg are out there for anyone with a laptop, and the value of creativity to see them in a new way is the new trump card. As an executive at Apple said a couple years ago (pre-iPod), "We want to be the ones who come up with new ideas -- not the ones who snap the pieces together..."

Orwellian Politics - Hillary in 1984

If you look back at my post of February 14, you'll see I anticipated a youtube video featuring Hillary Clinton. And just a little over a month later, courtesy of "parkridge47" here it is. OK, it's not exactly what I thought it would be, but the influence of video on the hyperindividualized culture is the next big thing in marketing (and political campaigns). There are already over 240,000 hits (update-make that 1 million) to the site. Careful, once you see this mash-up of the classic Apple 1984 commercial you may not be able to scrape it off your consciousness. You think I'm kidding...

Selling Technology at the Super Bowl

How about 'dem Bears? The flags are flying on the antennas down the Dan Ryan today and all the kids who aren't wearing Urlacher, Hester and Grossman jerseys to school at least have their blue and orange socks on.

And of course how about that holy grail (and last bastion) of TV advertising, 'da commercials? As Smith and Dungee run their strategies, you'll be seeing some of the biggest investments in annual marketing strategy unfolding in HD. For Americans, XLI shares the title of biggest sporting event and biggest marketing event. At $2.5 million for 30 seconds, and even allowing for a halo-effect of an entire quarter of reruns on youtube, advertisers will need to see a marginal profit of about $30,000 a day to break even.

That's a lot of ambivalent Pepsi-Coke railsitters being pushed one way or the other. And a lot of beer bought on the basis of horses playing football in the snow. And a lot of computer buyers being swayed in their next laptop purchase. Yup, HP breaks into the football-technology market with their Orange County Choppers-themed ad this year, following a long break since the top Super Bowl ad of all time, Apple's "1984" piece.

On Sunday, temperatures in Chicago will warm up to a balmy 7 degrees (from 5 at the moment), but Chicagoans who aren't in Miami in person will be there in spirit anyway -- where it should top out in the low 70's.