That Time Apple Made an Inferior Product and You Bought it Anyway

Best product always wins? Think again...

Happy Thursday, y’all! In the last issue of Backstage Pass, we started drilling down into the concept of designing customer-centric marketing vs the product-centric marketing that most companies pursue. The idea is that since most marketing campaigns are launched to build awareness, those campaigns shouldn’t focus on the product, the campaigns should focus on how potential customers will use the product.

Yet most companies want to market the product to build awareness of the product. This is a big reason why most marketing is so bad, because it completely disconnects with its desired audience. If you aren’t aware of WHY you would want to buy a product, selling you on the technical aspects of said product is a total waste of your time.

But if the marketing sells you on how the product would fit into your life and improve it, then suddenly you will pay attention.

The birth of internet music, and why the inferior product kept winning.

In the late 1990s, the MP3 file format rose to popularity as a way to quickly and easily transfer and receive music files over the internet. Remember Napster and file-sharing? It was driven by music fans swapping music online via MP3 files.

In 1998, the world’s first MP3 player hit the market: The MP Man, Model F10.

You’ve never heard of it, have you?

MP Man was not only the first MP3 player on the market, it was also a superior product to its initial competitors. Its first real competition was the Rio PMP300 from Diamond, released later in 1998. Whereas the Rio PMP300 could only hold 32MB worth of MP3 files (roughly 8 3-minute songs), the MP Man offered up to 64MB of storage, double the Rio PMP300.

So which product was the sales winner? The Rio PMP300, despite being the technically inferior product, is rumored to have sold 10-20 times the number of units that the MP Man sold.

So why did customers buy the inferior product? Would you believe it came down to marketing?

The MP Man was marketed as ‘The world’s first MP3 player, in your pocket’.

Problem: The average customer didn’t know what an MP3 player was. So they didn’t understand why they would want to buy one, then stick it in their pocket.

The Rio PMP300 was marketed as ‘Internet music in the palm of your hand’.

See the difference? MP Man focused its marketing on the product, Rio focused on how the customer would be using its product. MP Man told you what its product was, Rio told you why you should want it.

The average customer didn’t know what an MP3 file was or why they needed a pocket-sized player for it. But they did know what listening to music on the internet was, and they understood why giving them the ability to take their internet music with them was a big deal.

Apple dives into digital music

So that was 1998, and superior marketing pushed an inferior product to the win. Ironically, a similar scenario would play out a few years later in the same space.

Over the next few years, customers became more accustomed to ripping and burning music from their CDs into MP3 files. As a result, many customers developed large collections of MP3 files, and typically stored them on their computers since hard drives typically had enough storage to handle even the more robust MP3 collections.

In 2000, Creative Labs would launch its Nomad Jukebox digital music player. The Nomad Jukebox offered many technological advancements over previous MP3 players, including a staggering 6GB of storage capacity. The Nomad was marketed as holding up to 150 albums worth of music. The product itself even resembled the shape of a portable CD player, to really drive home the point that this is about giving you a massive amount of portable digital music.

And over the next few years, this line of digital players from Creative won multiple design awards.

But the year after the Nomad Jukebox arrived on the market, Apple debuted the iPod. The iPod offered 5GB of storage, roughly 20% less than the Nomad Jukebox.

So which product sold more units?

The iPod was the clear winner, as it would sell 450 million units over 2 decades before finally being discontinued in 2022.

We remember how the MP Man lost the sales race to the PMP300 in great part due to faulty marketing and positioning. Did the same thing happen with the Nomad Jukebox vs the iPod?

Yes.

The Nomad Jukebox focused extensively on marketing the technical superiority of its product. Higher storage, faster transfer speeds, a product design that resembled the portable CD players that many customers were familiar with.

How did Apple market the iPod? As being ‘1000 songs in your pocket’.

See the difference? Apple made it dead-ass simple to understand why you would want, even NEED an iPod. Despite the fact that the Nomad was technically the superior product.

But Apple did a better job of understanding its customers and why they would want an iPod. 450 million units sold suggests they knew what they were doing.

This also reveals another fundamental truth: We tend to buy from brands who ‘get’ us. If I think your brand understands who I am and what I want, I will buy from you over a brand who I feel is talking at me and not to me.

Maybe there’s a reason why I think this customer engagement stuff is so important.

I hope you’ve been enjoying Backstage Pass, if so, please consider sharing it with others AND please check out the other substacks I recommend. Also please drop a Like and add a comment and let me know what you think of the issue!

Have a great weekend, everyone!

Mack