Stylish iPhone to bear fruit for Apple

An ability to 'think different' is key to the company and its chief executive's success, writes Karlin Lillington

'But it's just a phone," must be the moan heard round the world this week from the people and rival companies that just don't get Apple or its chief executive, Steve Jobs.

Well, the iPhone is, and it isn't. Just as Apple is, and isn't "just" another technology company.

Like Apple or loathe it, the key to understanding the company's current success, the attention it garnered even in the downtimes, and its ability to draw the world's focus away from the annual mammoth geek gadgetfest of the Consumer Electronics Show in Las Vegas to hyperventilate over a tiny phone, is realising that this is a company and chief executive that - to use one of Apple's own marketing phrases - "think different".

In a world that tends to think the same, Apple regularly comes in and offers something that looks totally different, does new things or familiar things in a new way, and most importantly, looks amazing and works intuitively.

Witness the bland uniformity of computer design until Apple shook up that world with the see-through, multi-coloured iMac. Or the slow evolution of the digital music player until Apple created a mass market out of what had been primarily a geek-driven niche interest. Apple will sell its 100 millionth iPod this year, Jobs told his keynote audience at MacWorld on Tuesday.

Apple's iTunes music store, which created the first mass market for paid-for online music, recently sold its two billionth song, and 50 millionth TV episode download.

From the very first Macintosh computer, Apple set out its stall as a company that would find a slightly different market and niche than the norm and marketed itself heavily on that basis. It is the very essence of the Apple brand, and when it comes to branding, Apple has consistently been in the top 10 of the world's most recognisable brands on marketing surveys. Again, like it or loathe it, Apple has shown a tenacious ability to remain in the public's mind, with warm and fuzzy associations, even when hardly anyone was buying its products.

This is a real achievement for a design-led company like Apple, equalled in the tech sector perhaps only by Sony (a company going through its own doldrums after years of riding high). For some context, consider Bang & Olufsen, which markets beautiful, high-end electronic and digital equipment, but which has never had that people-friendly aura of Apple. Bang & Olufsen equals the cold beauty of the executive suite. Apple equals the warm friendliness of dancing while wearing an iPod, whether you are 7 or 70.

And the company achieves this despite often having higher price tags than the competition - the first iPods cost hundreds. But people who criticise Apple as always having higher prices haven't been watching the shift in the company in recent years. iPods come in a range of offerings and a range of prices, for as little as €79. The iMac desktop and the MacBook laptop are very competitive with rival products, matched across hardware specifications and software offerings.

The iPhone, Apple's star of the show this week, is the quintessential example of what Apple and Jobs do like no other company or chief executive.

Nobody can market a product, and make people ache to own it, quite like Jobs can during a keynote speech. Couple that with his, and Apple's, innate ability to capture the consumer imagination with a product and often, a significant market as well, and every now and then, you get a smash hit product like the multicoloured iMac or the iPod.

It hasn't always been this way, though. There was a long, cold winter in the Apple orchard when Jobs and Steve Wozniak, Apple's co-founders, had both left the company and a burgeoning portfolio of poorly differentiated products were primarily sold to the so-called "Mac Faithful" who loved the Mac operating system and intuitive look and feel and were loath to return to the Microsoft Windows camp.

So strong could the feelings be on both sides of the Windows/Mac divide that it was often referred to as "the religious wars". While that has mostly faded away, the divisiveness still makes for a powerful and lingering metaphor.

Cartoonist Aaron McGruder used it a year ago when characters in his popular "Boondocks" strip in America likened politics to computers - "The Republicans are Bill Gates. And the Dems are like Macintosh . . . they'll continue to offer token resistance." One character then asks, "What about Obama?" And the other replies: "He's like the iPod - clever, but not enough."

A year later, and an election later, it is looking like McGruder got it wrong on both counts. Reaction to the slender, web-surfing, touch-dial, music playing iPhone shows the iPod may have been the little product that could, and a clear indication that, had Apple continued to only make computers, there may not have been an Apple to offer resistance at all.

Indeed, a key Jobs announcement buried amid the iPhone hype - along with the extremely interesting Apple TV set-top box, which will likely only begin to get real attention when it comes on to the market next month (we'll be waiting until June for the first iPhones in the US, and the end of the year in Europe) - was the renaming of Apple Computer to Apple Inc.

Nothing sums up better how and why Apple are on the roll. Apple is only marginally a computer company now, with music a mainstay of the firm's fattening bottom line and stellar share growth and other digital media now on the agenda too.

And the architect of all this, and the clear marker for Apple's move from the so-called "Apple death watch", which went on in the technology media as a kind of annual pastime for years, is very clearly Jobs himself.

How valuable is Jobs to Apple? Since his return in the late 1990s, Apple shares have jumped 1,200 per cent. He is a wily operator and businessman, famously working for a one dollar annual salary (the board gives him rather nice gifts, though, such as his own helicopter, and he also gets share options). He's managed to parlay his animation company Pixar (Toy Story, Finding Nemo, Cars, The Incredibles) into the frontline of Hollywood production and cut juicy deals with Disney along the way, so that's a second line of income.

But his baby is clearly Apple, and the annual MacWorld San Francisco keynote in January is increasingly when all the world is his stage.

Jobs's keynotes - which every hopeful salesperson and chief executive should study for a pocket guide to charisma, carefully managed hype and channelling buyer desire - used to just interest the Mac Faithful. Now they get airtime across the world as people wait to see "what next after the iPod?"

Jobs's world is a little rickety at the moment, however. He is the highest-profile chief executive to have been entangled in a share backdating scandal sweeping about 200 American companies, almost 50 of which are technology companies in Silicon Valley. The Apple board has exonerated Jobs of individual culpability but as an internal report shows, he clearly knew some such shares were being granted, selected the dates on which some were rewarded, and benefited from some of those shares himself, albeit circuitously.

Some observers on the financial markets side wonder if he will remain unscathed. But others point out the market is not inclined to lose this particular company powerhouse. Apple is Jobs. If Martha Stewart could do time and still run her company and restore her brand, few fear that an SEC handslap will waylay Jobs or Apple. And who but Jobs could so stylishly drown that pesky shares problem by shifting the entire world's attention on to a phone that doesn't yet exist?