* Record sales pace expected as blanketing more countries
* Looking farther ahead, Cook must ponder options
* Reviewers rave about Siri, but otherwise no revolution
* Sales begin Oct. 14
By Edwin Chan and Supantha Mukherjee
Oct 12 Apple Inc debuts its fifth
generation iPhone this week minus its visionary leader for the
first time. But CEO Tim Cook may already be thinking ahead to
his greatest challenge: repositioning the company's fabled
marketing apparatus to safeguard the brand.
With Google Inc Android phones gaining momentum,
Cook is likely sticking to established battle plans at this
critical juncture. But longer term, he may be better off moving
the company out from under Jobs' gargantuan shadow. The Apple
co-founder bequeathed a mystique and cachet to the brand that
will be near-impossible to replace, cultivating a community of
fans hooked on ease of use and rich content.
It's those perceptions Cook -- who in two months on the job
has already shown Wall Street and Silicon Valley glimpses of
what an Apple without Steve Jobs might look like --- must focus
on preserving rather than the inimitable aura of the co-founder
who died last week at the age of 56.
"There's no question Apple is going to go through a time of
transformation. There's a lot of risk around the brand," said
Tim Calkins, a marketing professor at Northwestern University's
Kellogg School of Management who has advised clients like Eli
Lilly & Co . "A lot of pressure will fall on Tim Cook to
step up. The hard part is, he's not Steve Jobs, nor can he try
Cook has the luxury of time to ponder his next step.
Advanced sales of the iPhone 4S -- despite disappointing
fanboys and pundits hoping for more than an enhanced iPhone 4
-- surpassed one million in its first 24 hours globally,
smashing the 600,000 for the iPhone 4, though that model was
sold in fewer countries.
Sales in stores begin Oct. 14 in Japan, Australia, France,
UK, Germany, Canada and the United States.
Some analysts expect fourth-quarter iPhone shipments of as
much as 30 million or more, almost double from a year ago.
The fifth iteration of the iconic smartphone comes with a
faster processor and a better and more light-sensitive camera,
but little else to separate it from its predecessor. But tech
experts say the real gems lie beneath the phone's familiar
Influential reviewers Walt Mossberg and David Pogue raved
about "Siri" -- a voice-command activated assistant that
understands and responds to spoken commands and questions in
context, such as queries about the weather or a friend's phone
number. Pogue called it "crazy good, transformative,
category-redefining speech recognition."
"Despite Siri, the iPhone 4S isn't a dramatic game-changer.
Some new features are catch-ups to competitors," Mossberg wrote
in the Wall Street Journal. "It isn't perfect, and is labeled a
beta, but it has great potential and worked pretty well for me,
despite some glitches."
Both reviewers marveled at Siri's ability to hold
conversations, from basic "give me directions to ..." to
"When I asked it, 'What's the best phone,' it said, 'Wait
... there are other phones?'" Mossberg wrote.
BLAST FROM THE PAST
Cook now faces the monumental task of not only preserving,
but also advancing Apple's lofty status in the industry and
among fickle gadget consumers. Moreover, he must do that while
honoring his former boss and mentor, a master showman who time
and again displayed an uncanny instinct for driving consumer
"Things for the next two years are pretty much set in stone
in terms of what they want to achieve, and the new kind of
product focus they are putting out. After three years, the new
management is going to make its mark," said Jack Salzman,
principal and founding member of Kings Point Capital
Management. "If there is any pressure on the new Apple
management, its probably going to be self-imposed, because of
the void that was left by Steve Jobs."
The product pipeline is where Cook needs to stamp his own
authority on the company. He can stick to script only so long
before he risks stagnation and damaging the brand. Apple needs
to find a formula divorced from Jobs' persona, observers say.
Indeed, during the iPhone 4S' media launch last week, Cook
stepped back and allowed the supporting cast -- such as
marketing chief Phil Schiller, software head Scott Forstall and
design guru Jonathan Ive -- to tout the device, something Jobs
would have sought to control from start to finish.
"They've got to find a new voice in the market. Steve Jobs
was so much the face of Apple," Calkins said. "Protect the core
elements of the brand, but at the same time, move forward."
"You can't turn Apple into a memorial for Steve Jobs," he
added. Cook shouldn't "be afraid to make changes in the way the
company communicates and reaches out to consumers."
Branding and marketing aside, ultimately Apple's products
-- not their hype -- need to be judged on their own merits.
Apple's meticulously scripted marketing blasts are the
stuff of Silicon Valley legend. After rumor and speculation
builds across the Internet, the company sends out a cryptic
email invitation to tease the product. That, in turn, is
typically followed by a splashy extravaganza that culminates in
a global first-day sales event across the globe that often has
people lining up around the block days in advance.
"Past this launch, there isn't really a killer new launch.
I am sure they have got a number of products in development,"
said Pat Becker, a portfolio manager at Becker Capital
Management. "But once the phone is out, you will have all the
price points covered, you have got the different carriers
covered. To me, that's' a start toward reaching saturation in
the phone market."