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The iPod as business model
By John R. Graham

“The Internet changes everything it touches. It touches almost everything,” stated writer John Ellis several years ago. Such an audacious statement is an even more accurate description of the Apple iPod. Within the blink of an eye, it has become the most successful new product in history. Touching almost everything, it has literally taken the world by storm.
In a split second, it went from zero to 100 mph, so to speak. Even those who don’t own an iPod brand MP3 player make sure they have white earpieces, the pervasive iPod trademark. A recent poll of college campuses benchmarked the iPod’s success when students ranked it number one in popularity, beating out beer drinking for the first time.
But what does the iPod have to do with business? The answer is simple: just about everything.
A good place to begin is by acknowledging that what makes an iPod unique are not its component parts, many of which are reportedly off-the-shelf. What has made the iPod successful is a series of incredibly brilliant insights:
It’s the iPod’s design that sets it apart. The design is a combination of an irresistible sleek look, a compelling size and, most importantly, how it works.
At the very moment the world of gadgets has become incredibly complicated, the iPod offers the serenity of simplicity. TV “clickers” are incomprehensible. Who can program a microwave oven, let alone a DVR? Most of us use perhaps 5 percent of our cell phones’ capabilities.
Not the iPod. It’s brilliance rests in its intuitive simplicity. Product designer Bruce Claxton says, “People are seeking products that are not just simple to use, but also a joy to use.” That’s the iPod.
The iPod is the anti-gadget. Gadgets have buttons and switches that frustrate users, while the iPod’s simplicity allows it to become an extension of the self. This is what makes it so compelling and essential.
The iPod puts users in control. The revolt against the gnawing feeling of being controlled by economic and social forces came with the onset of free agency in professional sports in the mid-1990s. Today, most Americans like to think of themselves as free agents — as those who are in control of their own destinies.
There’s a well-known photo of a college co-ed holding her iPod. The look on her face suggests she has found nirvana. This is what the iPod is all about: freedom.
As we all know, it started with music. Every youth has his or her particular tastes in music. While tapes and then CDs were a precursor, it wasn’t until the iPod that we were given the power of total choice. We can listen to our music, when and where we choose. “You’re free” is the message of the iPod. We can be in our own private world wherever we happen to be at the moment.
To understand the attraction of the iPod, it helps to know why it is an unmitigated marketing success.
A total customer focus. While every business talks about meeting customer needs and expectations, most of it is hype. Can anyone be serious whose voicemail message says, “Your call is very important to me….” If they really believed the call was important, they might consider taking the call. Or what about all the blabber about “customer care” when the so-called helpers at the “help desk” merely read from a computer screen?
Unlike Microsoft and other technology companies, Apple is pure-and-simple a marketing organization. HP sells very good printers. Dell sells computers made to order. Yet, as someone pointed out, there is no “Cult of Dell.” There are, however, the numerous “Dell Hell” blogs cataloging thousands of customer service complaints.
Here’s the point: HP thinks about printers; Microsoft thinks about software; and Dell thinks about building computers. Apple thinks about customers. That’s the message behind the company’s “Think Different” campaign.
According to reports, Apple co-founder and CEO Steve Jobs is totally focused on the customers’ experience with Apple’s products.
An “I can’t live without it” approach. Try to take an iPod away from anyone who owns one, or more likely, several, and see what happens. Perhaps this is the point at which the genius of the iPod becomes apparent.
This may be why Matthew David wrote, “I’ve got just one thing to say. I love my iPod. Yes, I am that person, that soul, caught up in the marketing hype that Apple must love. I love you, Pod.”
Perhaps this is why iPods are everywhere. Business executives listen to audio books, podcasts — and, of course, music. Plug the iPod into your car’s MP3 port. Watch videos. Now, the tiny device may become the core of home entertainment.
The iPod is education-friendly, too. College professors are posting their lectures for downloading. At Georgia College and State University, they’ve created an iColony with iCitizens that’s built on an iPod foundation.
It has become essential because it works for people.
A work in progress. It may be no accident that the iPod is more like a Toyota Camry than anything else. While General Motors continued to turn out a string of nearly identical sedans, Toyota focused on one, the Camry. Seemingly dull in appearance, sales grew because of customer confidence in its quality and reliability.
Apple has taken this same highly focused approach with the iPod. About twice each year, the next iterations make their appearance. Now, the iPod product line offers an array of options to fit every lifestyle including incredibly brilliant video models.
What’s coming next is always the question. Will there be a phone? Internet connectivity? E-mail? Why not?
Who would have thought that the iPod would become the heart of the home sound system? Yet, it is exactly that.
Against this background, what does the iPod say about business? Although the list is long, here are a few possibilities:
Customers define the business. Some businesspeople talk about customers wanting to talk with “a live person,” while others say that customers expect “personal service.” Is this really what customers want? Or are they looking to have their needs met in ways that satisfy them?
With the iPod, Apple introduced a product that allows customers to define how the product is used. In his August column on the iPod in the Washington Post, Jose Antonio Vargas cites comments by Jason Berkowitz, project manager for a software company. At one point Berkowitz says of his iPod, “It becomes an extension of you…. It’s like a window to your soul.”
The key is letting the customer define the business.
Make it enjoyable. Kids are taught from the time they can walk not to touch the merchandise, to keep their hands to themselves when they’re in a store. At times, it seems as if store salespeople are there to enforce the “do not touch” rule.
Once again Apple stood the process on its head: They invited customers to play with the merchandise. There is a place for small children to use computers. The “Genius Bar” offers free advice and information. On top of all that, there’s a learning center. Apple is concerned with the customer’s experience.
Tear yourself away from the competition. Too many companies take their business plans from the competition’s playbook. It is safe to say that there would have been no Macintosh computer or iPod if Apple focused its future on the competition.
Even the most devoted member of the “Cult of Apple” admits that the company faltered badly for about a decade with its computer products, even though its operating system was unassailable. It was not until Steve Jobs returned as CEO and gave new life to the “Think Different” mission that change occurred.
When he introduced the iPod in 2001, Steve Jobs said, “Listening to music will never be the same.” It may have been more appropriate for him to say, “Life will never be the same.”
The headline on the column by Jose Antonio Vargas was accurate: “The iPod: a Love Story Between Man and Machine.” That’s the test for any business.


John R. Graham is president of Graham Communications, a marketing services and sales consulting firm. He is an author of several books, writes for a variety of publications and speaks at association meetings. He can be contacted by phone at (617) 328-0069. The company’s web site is www.grahamcomm.com.