Apple’s a very secretive company, but it’s a good guess that there’s no playbook in its Cupertino headquarters for incorporating an existing consumer brand into its portfolio.
That’s because Apple has never done anything remotely close in its 38-year history. The company has made more than 50 major acquisitions, but they’ve all been technology companies with little or no profile with consumers. One exception: Apple’s $400 million purchase of NeXT in 1997. NeXT, you may recall, was run by Steve Jobs, Apple’s co-founder.
Luckily for Apple, some consumer brands are much more acquisitive. They have left behind three major options:
Often when a bigger brand takes another one over, it keeps the new affiliation stealth. Example: Go to Skype’s website right now and look for the Microsoft brand name. There it is, way at the bottom in small type. There’s no mention above the fold.
Similarly, the name “Amazon” appears nowhere on Zappos’ website. As a Zappos user you’re only aware of the affiliation when you make a purchase and are invited to “login with Amazon.”
With Microsoft, there’s a case to be made the company’s divisive image in the tech community could scare away new users. In Amazon’s case, there’s a similar issue at play. Until Amazon bought the company in 2009, it had been an alternative to the increasingly monopolistic e-commerce giant. Though the Amazon affiliation is no secret, the brands apparently decided it was best not to beat consumers over the head with it.
For Apple, taking a similar approach with Beats could also make sense. Until now, Beats hadn’t taken sides in the tech wars. Now it could become an Apple company, giving fandroids and Apple haters a reason not to buy the brand.
In tech, Intel pioneered ingredient branding with its “Intel Inside” campaign in 1991. With Beats, Apple might take a similar approach, perhaps adding a small Apple logo to Beats’ headphones and Pill speakers. The same small logo might appear in the Beats Music app.
A good example of how this works in the packaged goods world is Fuze, an iced tea brand that Coca-Cola bought in 2007. Coke isn’t mentioned anywhere on Fuze’s packaging, but the Coke bottle logo is prominently above the fold on Fuze’s website. The link leads to Coca-Cola’s My Coke Rewards:
A third, unlikely option is that Apple will eventually do away with the Beats brand. From a financial standpoint, this makes some sense. As Allen Adamson, managing director of branding firm Landor Associates’ New York office, notes, supporting just one brand in the market — as Apple has always done — is generally cheaper than supporting two.
Though this is a common route after acquisitions — anybody remember Kinko’s, Dean Witter or Amoco before they were absorbed by FedEx, Morgan Stanley and BP, respectively — it’s unlikely in this case, Adamson says.
“From the sidelines, there’s a strong case to keep Apple separate,” he says. For one thing, Beats’ brand and packaging appear to have been strongly influenced by Apple anyway. Now Beats has carved out a niche in the market that Apple doesn’t own. “Apple doesn’t own the richness of sound experience and it fits with their backbone offerings,” Adamson says.
Russ Napolitano, COO of CoreBrand, agrees: “They need to retain the Beats brand because of how well that brand is known in delivery of high-quality sound and music.”
By Todd Wasserman