Apple shows how diversification can work

Iby Ken McEwen, Ken McEwen Public Relations

t seems so obvious with hindsight, but as the new millennium dawned, few of us would have seen the logic of a computer manufacturer producing a mobile device for playing music. That, in those days, was the domain of Sony with their Walkman.

But, as we all now know, the iPod – first launched in 2001 – was an overnight and enduring success.

Looking back, now, we can now see the logic that was maybe not obvious to many of us at the time. Apple were the ones who ‘joined the dots’ and recognised the business connection of syncing music with a computer and selling music for download from an online store.

Apple iPad

So unlikely had it appeared that Apple Computers would ever become a player in the music industry, that there was the agreement with the Beatles Apple Corps that each would stick to its own business. The final act in the wrangles that followed, was the eventual appearance of the Beatles music on iTunes at the end of last year.

History repeated itself in 2007, when Apple Computers made another landmark diversification move. Yet again, as the rumours began to fly, it seemed illogical for a computer company to want to produce a phone. Now, of course, with the benefit of hindsight the iPhone is seen as such a logical extension to a digital lifestyle.

Next came the iPad and again there were those who predicted Apple would fall on its face. They couldn’t see the opportunity that Apple had spotted and that others are now scrambling to develop tablet computers to catch up.

At the launch of iPad 2, Steve Jobs underlined the success of this diversification when he explained that it is the new digital products that now make up the bulk of Apple’s business, not the computers. The business has, in many ways, been turned on its head.

The figures for Apple’s sales of these new digital products is phenomenal. But, in terms of building a relationship with potential buyers, it has also been an amazing success. At the iPad 2 launch, Steve Jobs suggested that Apple may even have more signed up credit card customers than Amazon.

Not bad for a computer company that some were gleefully writing out of computer history in the 1990s.

The lessons for business are obvious. Look for opportunities that will build on your core business and grow it in new ways. Then, of course, you need to pay almost obsessive attention to developing the brand through outstanding design, brilliant marketing and top flight PR.
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