Mr. Rogers’ Neighborhood: Brand loyalty

Like many Mac addicts out there, I sacrificed a few hours of my Tuesday morning to watch the live Web cast of Apple CEO Steve Jobs’s keynote address at the annual Macworld Expo in San Francisco. Each year, the biggest geeks in the industry come together for several days in a large showroom to meet with designers and engineers and drool over the latest technological advances. Fluorescent lights hum, camera flashes sparkle, and schwag is freely distributed while people discuss issues of speed and performance. Right — just like Interbike, only nerdier, if you can imagine that. But Jobs’s

By Neal Rogers

Now that is brand loyalty

Now that is brand loyalty

Photo: Courtesy of campyonly.com

Like many Mac addicts out there, I sacrificed a few hours of my Tuesday morning to watch the live Web cast of Apple CEO Steve Jobs’s keynote address at the annual Macworld Expo in San Francisco.

Each year, the biggest geeks in the industry come together for several days in a large showroom to meet with designers and engineers and drool over the latest technological advances. Fluorescent lights hum, camera flashes sparkle, and schwag is freely distributed while people discuss issues of speed and performance. Right — just like Interbike, only nerdier, if you can imagine that.

But Jobs’s charismatic keynote address is the event that really gets the “party” rockin’. It’s often said that there are few companies that inspire the level of brand loyalty that Apple does, and it’s never more apparent than at this opening sermon, where Jobs’s loyal followers — the same ones that launched a Web petition hoping to prod him to run for president last year — hang on his every sentence and applaud his every proclamation of “insanely great” products.

Apple aficionados — considered “cultish” to some — have even been known to go so far as to tattoo themselves with the company’s logo, so as to distinguish themselves from those who, willingly or not, inhabit the Microsoft Windows universe.

Sound ridiculous? Maybe. But consider this: In an August 2002 article on Wired.com, Leander Kahney writes, “Apple is one of the few companies that inspire tattoos through pure love of the product. There are perhaps only two other companies that enjoy similar devotion: Harley-Davidson and Campagnolo, an Italian bicycle parts company.”

Hmm, hits kind of close to home all of a sudden, eh? Campy diehards out there, I’m looking your way. A polished aluminum crankarm might be a thing of beauty, you say, but a computer? A bicycle is a vehicle, a means to exploration and freedom, you say. A computer is like a television, you might argue, only more frustrating. It keeps you indoors and, consequently, off the bike.

Maybe you’re right. But for those who spend eight hours a day, five or six days a week on their computers, they do develop a close, personal relationship with their operating system not so different from the relationship a cyclist develops with his or her machine. And maybe, just maybe, the two brands aren’t as far apart as it might first seem. Both companies once enjoyed dominance in their respective markets, only to see their competitors take control. Both companies have dedicated fan Web sites insisting on their favorite product’s superiority (for examples, check out www.campyonly.com and www.macrumors.com), and both companies continue to produce mainly high-end products for what remains of their share of the market.

(And you know, the titanium PowerBook I am using to write this really is a work of art. Mmm… titanium; thought that might get your attention.)

Let’s look back to twenty years ago, when Michael Jackson was all over the news for the right reasons, Campagnolo Record had been the it grouppo in the world of high-end road componentry for as long as anyone could remember, and Apple released the Macintosh, the first personal computer to feature a mouse and a graphical user interface (GUI).

“It was literally a decade ahead of anything else,” Jobs said in his address, describing the 1984 Apple Macintosh. “We had to go teach people what a mouse was, what pointing and clicking was, what cutting and pasting was.”

In 1984 Apple seemed poised to run away with the personal computer industry, while Campagnolo — with its beautiful hubs, elegant cranksets and seemingly frictionless bearings (each ball bearing matched within a micron in diameter) — sat unchallenged atop the road componentry world.

Just a year later, after SunTour’s patent on the slant-parallelogram derailleur had expired, Shimano introduced its index-shifting Dura-Ace line, and Campagnolo’s once untouchable position of power began to shift.

Until then, Shimano had been more of a mid-level player in road and mountain-bike componentry, respected for quality and value, but not generally regarded as a high-end contender. But in the mid-’80s, the company accelerated its product development and introduced a series of innovations in cassette freehub systems, Uniglide chains and clipless pedal design. A somewhat complacent Campagnolo took several years to respond to Dura-Ace’s indexed shifting, and to many, its first attempt at the technology was no better than the lower-priced Shimano design.

While Shimano continued to increase market share in both its high-end Dura-Ace and XT parts, Campagnolo failed to capitalize on the growing mountain-bike market. Campagnolo’s heavy, expensive Euclid mountain-bike group never gained traction, and was quietly discontinued a few years after its introduction.

Today, Shimano enjoys the majority market share both on- and off-road. A 2003 poll of 3686 VeloNews readers revealed that, on their most recently purchased road bike, 72.2 percent were equipped with Shimano parts, while just 23.5 percent were equipped with Campagnolo. The mountain-bike story is similar, with 72.2 percent of owners reporting their most recently purchased fat-tire ride came with Shimano, compared to 5.4 percent riding SRAM products.

Still, why no “Shimano Only” Web sites? Why no tattoos? Why no “Kozo Shimano for President” campaigns? The fact that Lance Armstrong has piloted Dura-Ace to five consecutive Tour de France victories must count for something, right?

Part of it is simple preference. Some of it is price. Campy Record remains the lightest — and most expensive — componentry group, and the fact that it is almost, but not quite, out of reach adds to its appeal for a certain kind of cyclist. And some of it is street cred; at the 2003 Tour de France, ten teams at the Tour used Shimano components, while 12 used Campagnolo. To fanatics, that slight tip of the scale might as well be a landslide.

Apple’s well-documented rise and fall in the personal computer industry runs a parallel, if accelerated, path to Campagnolo’s. The success of the Macintosh, particularly in the education market, propelled Rolling Stone to label Apple “Wall Street darlings.” Jobs was considered a visionary, a “whiz kid.”

But in 1985 the company posted its first quarterly loss and a new CEO saw Jobs forced out of the company he’d begun. At the same time, rival software company Microsoft, which to that point had been one of Apple’s primary software developers, had commenced in co-opting Apple’s GUI concept with its Windows operating system.

Okay, we get it. You are officially a 'geek.'

Okay, we get it. You are officially a ‘geek.’

Photo: Wired.com

Apple sued Microsoft over the “look and feel” of Windows, and eventually Microsoft’s Bill Gates agreed to sign a statement that his company would not use Mac technology in Windows 1.0. According to Apple history.com, the agreement said nothing of future versions of Windows, and Gates’ lawyers made sure it was airtight. And so in the same year that Shimano introduced its index-shifting Dura-Ace system, Apple effectively lost exclusive rights to its GUI design.

Many critics point not to Windows’ superiority but Apple’s reluctance to license its Macintosh operating system as the primary reason for Microsoft’s ascendancy to the throne of the software universe. While Windows would run on any of the numerous inexpensive PC-clones running an Intel processor, Apple insisted it remain the only company to develop both the hardware and software required to run the Mac.

A “too-little, too-late” venture into licensing the Mac OS on clones began in 1995, but proved disappointing and ended disastrously. And so, like the Betamax versus VHS debates of the early 1980’s, in the end it was the least expensive technology, not the finer product, that won out. By 1996 Apple held just 6.7 percent of the U.S. market; after announcing a $740 million loss for Q1 1996, its share had shrunk to 4.1 percent in 1997. Apple Computers and its “point and click” Macintosh operating system – the very one that Gates and Microsoft had blatantly copied – had lost the fight.

In late December 1996, Apple acquired NeXT, a company that the displaced Jobs had formed and developed around a next-generation UNIX-based operating system then called Rhapsody. Jobs came to Apple with NeXT, and before long he was back at Apple, eventually working his way back to the position of CEO. Rhapsody eventually became OS X, released January 2000 — the first new operating system at Apple since the Macintosh in 1984. And today, Microsoft — with its industry standard Office suite — is still an integral developer of Mac software.

With the advent of the visually stunning and simple-to-use iMac and iPod mp3 player, Jobs has brought innovation back to Apple, but for the fight over the market share of operating systems, the battle is long over. And looking forward, Apple is currently leading the market in legal music-downloading products with its iTunes store, but whether it will hold on to its lead remains to be seen.

For me, admittedly an avid Mac user, nothing announced during Jobs’s keynote address was either pressing or impressive. I was hoping to see an improved iPod line released; instead, Apple introduced a “mini-iPod” that runs on flash memory, providing 4GB, or 1,000 songs, of storage space for $249 — just $50 less than its 15GB hard drive model. Like Campagnolo, Apple has no real “low-end” offerings to speak of, but critics are already accusing the company of cannibalizing its own product line with the mini-iPod. You certainly wouldn’t expect to see Campagnolo adding some faux-carbon graphics to its Centaur groupset and then try to price it more closely to its race-quality Chorus group.

Mac geek that I am, I had hoped for greater incentive to buy an iPod with more storage than the 10GB second-generation model I currently own. Why? So I can commence use of the new Belkin iPod Voice Recorder, which only runs on third-generation iPods, but could turn the mp3 player into a digital audio recording device capable of documenting and storing hundreds of hours of interviews on my laptop via Apple’s iTunes software jukebox.

According to Belkin’s promotional literature, “Just like your music, your voice memos will sync automatically to iTunes for storage, editing, or sending to others via e-mail.”

Sending digital recordings to others via e-mail? Posting interview sound bites on the VeloNews Web site? The potential for less transcribing and easier manageability? Now this is something I need in my life. Not want, need.

I suppose that in an era when Microsoft and Shimano run the show, the loyalists out there that remain true to their chosen products have their reasons. For some, I assume it’s akin to that friend we all have who only listens to bands that aren’t mainstream. It’s not just a product preference, it’s a sense of identity. Apple, with its sleek designs and “Think Different” ad campaign of a few years back, tends to inspire images of individuality and creativity. Campagnolo’s rich history draws connections to champions like Fausto Coppi and Gino Bartali, with images of red wine and pasta after a long day in the saddle.

While I haven’t yet seen anyone with an Apple tattoo — nor do I wish to — my trusted bike mechanic here in Boulder sports a boss Campagnolo tattoo, and I have to admit, it does inspire a bit of confidence when I ask him to perform such tasks as converting my Chorus 9-speed shifters to 10-speed. You gotta figure, if a guy is willing to brand himself with, well, a “brand,” he’s probably going to do the ink justice when working on said product.

Now that, my friends, is brand loyalty

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