Economic Analysis: Has Apple Lost its Mojo?

Last week, Apple (AAPL: Nasdaq) announced their new iPhone 6, as well as a couple of wearable smart devices. It was a botched marketing effort that would have, if possible, made the late great Steve Jobs throw a fit. While, it was not a complete horror show, one must ask the following questions: Has Apple regained its innovation? In the process has it lost its marketing mojo?

At the very core of Apple Inc.’s iconic flagship brand and the reason for their huge success over the years was an unbelievable level of user experience coupled with highly innovative products and top notch customer service.

The good, the iPhone6 was what we expected. It has a bigger and sharper screen with a thinner and rounder design. Apple has significantly upgraded their camera and put a new A8 processor in the phone. It also comes out with a new operating system iOS8 that has more automation platforms, health software and other gadgets designed to regain market share lost to Android.

There is one game changer and that is Apple Pay.

The mobile payment industry is a huge service opportunity. It will rival iTunes. Tim Cook, said one thing in the launch that was 100% correct, and that is credit cards are as unsecure as they come.  They did Apple Pay right. It is a system that is easy to use, secure and it is a smart application. This allowed Apple to get all the major credit card companies to jump on board, including big banks and retail giants like McDonald’s (MCD: NYSE) to jump on the bandwagon. The only other competition Apple has in this arena is PayPal.

Apple also introduced the new Apple Watch. This is their first foray into the wearable smart market. It has a nice digital crown with a sleek user interface. It comes with Taptic Engine’s user interface. Also comes with touch messaging and a whole other nice applications including third party developers.

So far everything looks good, but the lack of actual hands on testing means only time will tell if these new brands are as good as they look and sound.

Apple triggered, as Tim Cook said, the “mother of all upgrades.” They have a device with a big screen now capable of competing with Samsung’s iconic Galaxy 5s. This is their one opportunity to get it right and regain lost market share from not only Samsung (005930.KS) but the rest of the android crowd. In order to this they must convince droid users to come onboard and leave their beloved android based phones with their beautiful customizable features, big beautiful screens and a plethora of third party applications. All of which drew them away from Apple in the first place. Please see the below chart on market share, as of first quarter 2014, from Dazeinfo.

The fact is, the new iPhone is very pricey, even more so in the overseas markets.

Apple does offer premium products and customer service, but no matter how you slice it, price will be an enormous barrier to gain a substantial slice of the market share. This means that Apple will have to go heads over heels and become innovative in its marketing strategy.

It has failed to do this.

Apple is one powerful behemoth of a brand. It creates a buzz like no other business on the planet but that is because of its products. Steve Jobs, was one of the biggest marketing gurus of the modern era, and with his loss, it is all about what Apple is failing to do. Aside from secrecy, it did not do much to wow the marketing side.

There were plusses and a lot of minuses. They used online messaging to deliver a solid message. They had really bad Java script coding which caused 30 minutes of their video to be unwatchable. This caused millions of users to check out and stop watching. Inexcusable for a company struggling to gain market share. Apple had excuses with why it failed, most of which is technical. Bottom line, they did not plan the event properly or allow for proper provisioning of such a grand brand launch. So we have a technical fail as well as a nearly irreparable public relations disaster.

The video was only available to Apple’s very own Safari and Quick Time. That is okay if you are in the Apple family, but what of those who are not? The very people you want to jump ship from Android into the iPhone family? What does this tell them? Maybe it tells those consumers who have androids or other operating systems, “okay we really do not want your business.” This does not help that price barrier and makes it harder to overcome.

Tim Cook did an admirable job with the launch. He proved to the world Apple can still deliver a rock solid, highly competitive, highly advanced technological piece of technology to the world. Where he went wrong was to convince Android users to want to jump ship. This was a huge marketing fail, which did not bring this company to the next level. Apple has been losing market share to the ever growing Droid crowd. They failed to even reach this highly lucrative segment. Apple is missing Steve Jobs, a man who paid attention to every little detail of a launch. Congratulations on an awesome product but you missed the golden opportunity to regain lost ground.