China + Gold = 9 Million iPhones Sold
I have two words for those who still think Apple's marketing genius died with Steve Jobs: China and gold.
In preparing the debut of its two new iPhone models, the 5s and 5c, Apple made the crucial decision to include China in the product launch, and to offer a gold-colored high-end phone. Voila, a sales record: 9 million iPhones sold in the opening weekend, up from 5 million for the original iPhone 5.
Bringing together China and gold is a recipe for success. A recent decline in the price of the yellow metal has revealed immense pent-up demand for shiny trinkets in Asia. The volume of gold jewelry sold in Hong Kong was up 66 percent year-on-year in the second quarter of 2013, according to the World Gold Council. Mainland China saw 50 percent growth. Apple did not need to read boring market reports to figure out it needed a gold-colored model for Asia. It would have been enough to walk the streets of Hong Kong and see the crowds in the jewelry stores.
Gold is a well-used marketing tool in the world of mobile devices. “Dumb” phone manufacturers have used the hue, especially in Asian markets and Russia, ever since color handsets came into existence in the early 2000s. Nokia made fun of the gold iPhone 5s, tweeting from its UK corporate account, “Real gangsters don't use gold phones.” The Finnish company itself, however, has produced a number of gold-colored models, including one that used genuine 18K gold plate.
By the end of the basic handset era, mobile phones were marketed as accessories rather than devices. The transition to smartphones brought back geeky discussions of processor architectures, battery types and operating systems. Apple, with characteristic aplomb, positioned a sophisticated smartphone as a fashion item. Now, everyone else who goes down this obvious path will be an Apple imitator, like HTC with its rumored gold model.
The Cupertino company profited by remembering what its competitors, with their boring black and white flagship smartphones, appear to have forgotten: Self-identification is the main reason people buy a particular cell phone. In 2005, Jiaquin Yang of Georgia College and State University and his collaborators researched phone purchase motivations in the U.S. and China. “Using the cell phone of a particular brand or model helps me show others who I am, or who I would like to be (such as a successful businessman, a female professional, etc.),” was the most popular statement on the researchers' questionnaire.
Another frequent reply: “To satisfy the expectations of classmates or fellow work associates, my decision to purchase a cell phone is influenced by their preferences." Now that a shortage of gold iPhones has been widely reported, people will want them even more -- for bragging rights if nothing else. And then the colleagues or classmates of those who obtain one will want one, too.
Well done, Apple. You were always a marketing company as much as a tech one.
(Leonid Bershidsky, an editor and novelist, is a Bloomberg View contributor. Follow him on Twitter.)