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Think Different: The Decade of AppleHow Apple Changed the Rules of Consumer Electronics Marketing

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Today’s Presenters

Chris Collins, Director, Technology &

Entertainment at Compete

Alyssa Maine, Marketing

Coordinator, Marketing at Compete

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About Compete

Who We Are Who We Work With

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Today’s Agenda

• The Decade of Apple

• Marketing Mastery

• Brand Awareness

• Brand Engagement

• Product Consideration

• Online & Offline Conversion

• Looking Ahead

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The Decade of Apple

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$7.75 $10.36 $53.61 $153.47 $185.33 $412.14

2001 2003 2005 2007 2009 2011

Source: Yahoo Finance; average stock price for September of 2001-

2009, closing price on September 14 2011

A Decade of Apple: Products & Profits

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Brand Awareness

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MythApple doesn’t spend a lot on marketing

RealityApple spends a lot on marketing -

over $3 billion in the last five years

(They just spend it really well)Source: Apple 10-K Filings; Compete Estimates

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Big Ad $ = Great Brand Awareness (Part 1)

Website Traffic, By Unique VisitorJanuary 2008 – August 2011

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

apple.com dell.com hp.com

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Big Ad $ = Great Brand Awareness (Part 2)

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000

Goo

gle

Face

book

YouT

ube

Yaho

o

Gam

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t

Agg

rega

te A

dul

t

Twit

ter

ES

PN

Ph

oto

bu

cke

t

The

Wea

ther

Cha

nnel

CNN

Mic

roso

ft

Am

azon

.com

Wik

ipe

dia

MyS

pace

Turn

er

Rea

lNet

wo

rks

MSN

AO

L

eBay

Gro

up

on

Acc

uwea

ther

Myx

er

Fox

New

s

Wor

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ss

Blo

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App

le

Map

Que

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Frie

ndF

inde

r

Lim

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Air

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Wal

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An

swer

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ET

Mobile Website Traffic, By Unique VisitorJune 2011

Source: Groundtruth

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Brand Engagement

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But Awareness ≠ Engagement

$100+ million

Ad Campaign

6+ millionUnique Visitors to DroidDoes.com

in Q4 2009

~2 million

“Click & Bounce”

Unique Visitors

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Brand Engagement is Emotional

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Emotional Engagement = 2M Shoppers / Month

49%51%

43%

57%

Website Traffic DemographicsAugust 2011

Total Visitors

35.4 million

@ 49% Female:

17.4 million

@ 43% Female:

15.2 million

Net “Unaddressed”

Female Shoppers:

2.2 million

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Product Consideration

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Product Portfolio

The collection of

products and

services that make

up a company

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Portfolio Rationalization → Product Consideration

0

5

10

15

20

25

30

35

40

45

0%

5%

10%

15%

20%

25%

Apple Motorola

Phone Interest (L - bar) and # of Models (R - dot), By Brand June 2008 and April 2011

0

5

10

15

20

25

30

35

40

45

0%

5%

10%

15%

20%

25%

Apple Motorola

April 2011June 2008

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Online & Offline Conversion

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Apple Excels at Converting Product Consideration

100.0%

0.118

0.085

79.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Engaged Shoppers

Purchase Intent

Retailer Referral

Shopper Fallout?

iPhone (n= 288K Engaged Shoppers)Fascinate (n= 21K Engaged Shoppers)

Online Purchase Funnel FalloutAugust 2011

100.0%

0.46

0.047

49.3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Engaged Shoppers

Purchase Intent

Retailer Referral

Shopper Fallout?

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Looking Ahead

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Near Term: Strong Demand for Sprint iPhone 4S

5.8%

12.5%

5.4%

9.0%

AT&T (n=1280) Sprint (n=514) T-Mobile (n=534) Verizon Wireless (n=1893)

CellPhone Owners Waiting For Specific DeviceQ3 2010, Q4 2010, Q1 2011, Q2 2011

Q: Why is that you do not own a smartphone (a phone with advanced PC/email/Internet functionality)?

Percentage answering “I am waiting for my wireless service provider to offer a specific smartphone”

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Longer Term: Apple Dominance Will Slow

Strengths Threats

• Extending product

lifecycles

• Markets are still

growing; Apple has

small market share

• Legacy of Steve Jobs

• Law of large numbers

• Fickle consumer tastes

• New competitors

(i.e Amazon)

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Thank You.

•Christopher Collins•Director, Technology and Entertainment

•ccollins@compete.com

•617.933.5641