"The Brand Split: Apple Computer Vs. Apple Entertainment..."

Continuing from my last post below and to further speculate: what are the implications of the brand split; Apple Computer Vs. Apple Entertainment?

When you consider Apple's dominant position in the portable music player market (still holding over 80% of market share) and subsequent leadership in the downloadable music segment of the entertainment industry, it doesn't take much of a leap in marketing common sense to see the potential, or even probable threat to; video/DVD rental outlets, netflix, and other business models dependant on entertainment distribution that can be digitized and piped via the Internet.

Once Apple's brand split occurs and they can clearly articulate Apple Entertainment to the marketplace -- so long Blockbuster.

Peter

Comments

[jfutral]

Ok. I can't for the life of me see what benefit splitting into two brands what Apple is already doing successfully as a single brand. And it would seem to be counter to the "Apple controls the entire experience from beginning to end" philosophy.

There is already clear articulation. Such a split would only create confusion in the market place. Splitting would only dilute the brand. IMHO

Joe

[Copywriter, Kevin Francis]

Well, it all depends what the consumer thinks the "Apple" brand is. Used to be that "Apple" meant groovy, easy-to-use cult computer (that unfortunately got totally trashed in the market place by the "Wintel" standard). Now, I'd suggest, it means "iPod" (plus all the stuff that goes with it).

If you're a follower of Al Ries and Jack Trout and their concept of positioning, then you'll agree with Peter's suggestion. If you accept Ries and Trout's concept, a "brand" can only occupy one position in the mind of the consumer. "Apple" can't be both a computer and an iPod. In fact, I'd go further and suggest that one part might even have to change it's name completely (otherwise there's continuing confusion over what an "Apple" is).

I doubt if Apple will actually go ahead with a split because they'll continue to believe in "synergy" and that somehow the "halo" effect from iPod will rescue the computer business. If they don't the likely result is that the computer side will continue to lose ground.

One potential opportunity for the computer side will be the introduction of the new models using Intel chips. This will mean existing PC users can migrate across without having to replace all their software (I think) as the new machines will be able to run Windows without clunky emulation software, is my understanding. Apples are certainly a lot easier to use to create Audio Visual products and some Internet Marketers (and unabashed Apple fans) think this will be the killer ap that revives the computer side. I'm not convinced that the mainstream consumer will be that excited, however, so that the computer biz will remain a niche player. Still leaves the problem of "What is an Apple?"