How Siri Became Apple’s Bad Apple

Twelve years ago I fell in love with Siri, the virtual-assistant app that Apple had just added to the iPhone. Secretary 3.0, I called her. My feelings were widely shared. David Pogue gave her a rave review. Siri, Steve Rohr wrote in The New York Times, "represents the future of Apple as a business.”

Sure glad he was wrong about that!

Unlike like the smart young secretary who typed her way up, Siri never evolved. Now she’s a middle-aged drudge. Her cousins, Alexa and Google Assistant, aren't much better. (To be fair, Alexa will tell me the time of the next high tide when I ask her. Siri diffidently offers me a tide chart and expects me to figure it out myself.) 

Clunky coding (perhaps dating back to a Pentagon project in Siri’s case) and poor strategy doomed Siri and her ilk. See this new Times report. Now the enthusiasm once showered on these early attempts to make Artificial Intelligence useful is lavished on far more powerful A.I. tools, like chatbots.

What about it, Apple? Could you get it right this time?

One ‘Bad Apple’ Can Spoil a Metaphor

You're No Apple, You're a Bank

Happened on Heather Landy's last column for American Banker. Financial-services folks, she notes, seem fixated on emulating the success of Apple and Amazon.  That's not easy.

For example, while a focus on cross-selling makes perfectly good sense as a general business strategy, it doesn't hold up very well in an Apple business model context. Notice how when you visit an Apple store, nobody ever says, "Well, sir/ma'am, I see you have one of our phones. Have you considered trying one of our tablets?" There's no need to push products on us because we already know that we want them. We'll even line up around the block to get them. (Whereas a line around the block is never a good sign for a bank.)

Can banks develop a cross-buying culture? Can they give us new conveniences even more welcome than those smart credit cards the Europeans enjoy?

Can they create true wealth-management centers, units so innovative and quality-obsessed that customers clamor for the privilege of a referral?

We'll see.

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Landy is leaving her post as editor in chief of American Banker Magazine to join Quartz as global news editor.

Are Apples Collectible?

Christie's thinks so. First Bytes, an online auction, features this Apple-1 from 1976, the first product of the Apple Computer Company.

Also up for bid, and considerably cooler, this 20th anniversary Macintosh from 1997. Features include leather wrist-rests and a Bose sound system with external subwoofer.

The online auction ends July 9.

How Pigs Got Slaughtered

Why did people take money they couldn't afford to lose, and invest it in high-risk options strategies playing a single stock? Why did one person invest 50 million dollars in such strategies? And why did any of them trust a kid with no investing track record? It seems incomprehensible to me.

Felix Salmon can't figure it out, and neither can I.

 Wasn't the prospect of getting rich with Apple good enough? Why try for super-rich and lose your shirt, pants and undies?

Gold Is A Dumb Investment

Warren Buffett, in his letter to Berkshire-Hathaway shareholders:

Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion. Call this cube pile A. 

Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?

But . . .
The cost of a year at Yale College – tuition, room and board – is roughly the same as it was a century ago when measured in gold.

Interesting, though the chart doesn't disprove Buffett's point. If you had put your year-at-Yale money into farmland and Standard Oil a century ago, you could probably fund an entire Ivy League education today.

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Update: Christopher Goolgasian of State Street, speaking up on behalf of SPDR Gold Trust, says the Oracle of Omaha is wrong about gold's investment value.

"While he won’t own gold, he also never owned Apple (up around 1,500% since January of 2000) or Google (up 530% since August of 2004),” Goolgasian said of Buffett.

(Nothing gladdens the hearts of those of us who bought Apple cheap more than reminders of those who didn't.)

iPad Time – Faster Than a New York Minute

Remember a year ago? In early April Apple was scheduled to introduce a new tablet computer – what the world now knows as the iPad. Then production glitches caused a brief delay. Bearish commentators warned Apple wouldn't have time to achieve significant sales in 2010.

Actual iPad sales last year? Almost 15 million! The world hadn't known what an iPad was, but everybody in the world instantly seemed to want one. By summer tourists at the Eiffel Tower were taking their guided tours on iPads. By fall tourists were joined by kids, boomers, seniors, warehouse workers …

… and, of course, wealth managers.

How much of iPad's speedy success, one wonders, was due to digital word of mouth? Via texts, tweets and Facebook, news of the Next Big Thing could spread across continents in minutes. It's not a fair comparison ( Steve Jobs doesn't have brokers working on commission as competitors) but we'll make it anyway: in the last century it took no-load index funds, Jack Bogle's Next Big Thing, a generation and more to gain traction.

Don't you love the cover-converting-to-stand for the iPad 2?

How Well Do You Adapt?

Apple isn't perfect. (The balky Wi-Fi antenna in my refurbished iPod Touch no longer works at all.) Still, for anyone interested in marketing, the company is always worth watching.

This weekend Apple opens its 300th store, in Covent Garden, London. You know the look of Apple stores: white, bright, lots of glass. In Covent Garden Apple's designers had to forget the white and adapt to a traditional, historic setting, yet give it an Apple spin.

Did they succeed? Take a virtual tour and judge for yourself.

Can You Create a Halo?

While Jim Gust was keyboarding the post below, Apple was selling its one millionth iPad!

And that's not the best news for Apple. Buyers of iPhones and such are coming back to buy Macs, thanks to Apple's famous halo effect. They must be telling their brothers and their sisters and their cousins and their aunts to buy Macs as well. In Apple's last quarter, sales of Macs rose 33 percent. Sales of desktops (the kind nobody was supposed to be buying anymore) rose about 40 percent!

Halos are rare in the financial-services sector. More common, unfortunately, is the bad-odor effect. After a megabank repeatedly smacks Jane Q. Public with exorbitant late fees, obscene overdraft fees, etc., she may survive and even prosper. But when Jane does, I bet she won't hold her nose and turn to that megabank for help with investments or estate planning.

Smaller trust companies and advisory firms stand a better chance of creating a halo. Can you figure out a way to offer services meeting the standard set by Apple's Steve Jobs, "insanely great"? If you can, your clients will not only give you more of their wealth to manage, they'll also refer you to their brothers and their sisters and their uncles and their aunts.

Should Asset Managers Become Credit Counselors?

Consumers are maxed out. Businesses large and small founder because they can't borrow money as usual. Unless credit, a.k.a. liquidity, starts flowing again, everybody is done for.

Except . . . .

Apple sold almost 7 million iPhones last quarter, outselling Blackberries. Sales of Mac computers rose another 21 percent. But here are the truly amazing statistics:

Apple's debt at the end of this fiscal year: 0

Apple's cash: $25 billion.

Sounds like asset managers have a clear choice: Retrain as debt counselors or look for business from Steve Jobs and his crew.

Don't Bank on It; Have an Apple

From What a Difference a Year Can Make in today's Wall Street Journal:

In the crazy, mixed-up, upside-down, recession-fearing world, here is a startling development: The current adjusted market value of Citigroup is $110.6 billion, a scant billion dollars or so ahead of Apple, at $109 billion.

Last year at around this time Citigroup's market capitalization was around $264 billion and Apple's was at $73 billion, according to Capital IQ. Now, it is difficult to compare apples and oranges (or in this case, Apples and Citis). Still, it is worth taking a moment to pause and reflect on this tale of two market caps.

Apple has been racking up the good will of investors, while Citigroup has been losing it. [And] iPods are easier to understand than, say, collateralized mortgage obligations.

At least Citi's shareholders aren't the only ones suffering. Our pain is shared by Citigroup's top investment bankers, who "took as much as 20% more of their bonuses in restricted stock units this year."

Teaching Children How to Invest

To learn about money, says this New York Times story, kids need to handle money. Put them to work in a store or at yard sales. Or, like Tom Rogerson of BNY Mellon Wealth Management, give them money to invest:

Mr. Rogerson, 51, the father of two girls and two boys, has them off to an early start. Six years ago, when they ranged in age from 5 to 15, he and his wife decided to entrust them with $5,000 each year. The children were to invest the money, which would be used for the family’s summer vacation. If the fund prospered, they might “go to Disney World,” he said. “If it stayed flat, we would go around the country and visit family members,” he added. “If the investment fell, there was always a camping trip.”

* * *

Mr. Rogerson turned his kids into investing guinea pigs in 2001 — a bad year for the domestic stock market, as it turned out. “The kids knew nothing,” he recalled. “They bought stocks like Apple and Hasbro and all these penny stocks at high-tech and toy companies. Their pile went down from $5,000 to $2,000.” That year, he said, “we went camping.”

During the second year, the children were so nervous about “putting Mom and Dad back in a tent again that they eventually put all the money in money market accounts,” he said. “They made $50,” he added. “That year we drove down to Florida to visit family. “Since we were six people, we stayed at Holiday Inns along the way. We spent the money on motels, food and entertainment. My father lived in Daytona and my wife’s mother lives in Naples. Along the way, the kids made decisions about what kinds of restaurants we could go to.”

By the third year, the investing bug had bitten, and the children wondered, “How do we invest so maybe we can do something more fantastic?” he said. They had stocks that were more conservative: a diversified portfolio that included large-capitalization stocks. They also had fixed-income investments like bonds. The young investors earned $600 on their $5,000 that year, and the family rented a catamaran and went boating near Mystic, Conn. (choosing it over Disney World).

Presumably, Mr. Rogerson was teaching his kids how not to invest. (Surely he wouldn't have gambled a BNY Mellon client's money on stocks as a short-term investment.) With luck, they have learned that equities should be held for the long term.

Example: Look what would have happened if the family had skipped its 2001 vacation and held onto the shares of Apple:

“Lifestyle” Sells. What Can Fee-Based Advisers Learn?

Investment advisers and financial planners who work for fees rather than commissions can surely learn from these two Washington Post articles.

Learn what? You 'll have to figure that out yourself. The Senior Assistant Blogger is way too 20th century.

When You Need Another You:

Three years ago, [Ezra] Glass co-founded a lifestyle-management company in Rockville named Serenity Now, a name inspired by an episode of the television show "Seinfeld." It's modeled on similar lifestyle-management firms in vogue in Europe, where clients pay a membership fee for round-the-clock advisers who can cater to their every need, including entree into chic clubs and restaurants. Glass's clients pay a membership fee that ranges from $450 to $1,500 a month.

Apple Retail Stores Revamp:

It's not uncommon to find people dropping in to hang out, use the Internet or let their children play on the Macs on low-legged tables. Personal blog entries, complete with snapshots of the authors in the store, are sometimes written on the spot.

"We try to pattern the feeling to a 5-star hotel," said Apple's retail chief, Ron Johnson. "It's not about selling. It's about creating a place where you belong."

* * *

The "one-to-one" personal training service that Apple stores launched two years ago is also becoming more popular, Johnson said. He declined to give specific growth figures.

For $99 a year, a customer gets up to one hour a week to learn about a wide-range of subjects tailored to the customer's interest or abilities. The program is for beginners and experts alike and can cover how to set up computers, make movies, build Web sites or put together a scrapbook or family newsletter.

Need New Business? Take a Bite of the Apple

We know. You're a meat and potatoes guy. You don't care what your ads and collaterals look like. You think all this image stuff is for wimps. You just want your sales force to bring in the business.

You need visual therapy.

Start with a visit to Fortune's Grouchy Geek. He reminds us that yesterday was the 30th birthday of the Apple II computer.

Perhaps even more important in the long haul, it was the 30th birthday of Apple's "bitten-apple" logo.

The rainbow apple (the 21st-century version is an elegant white) replaced Apple's original logo, which featured Newton sitting under an apple tree. Looked like a 19th century illustration.

Compare and contrast the old and the new:




Looks count. And they count all the more when you're selling something as generic as financial services.

Sell People What They Want, or Sell Them What They'll Use?

A generation ago, Merrill Anderson's 401(k) plan offered investment choices limited to a couple of equity funds – one indexed, one managed – a fixed-income fund and a money market account.

In the 21st century, many 401(k) plans offer so many investment choices that employees are said to be too confused to participate.

This proliferation of choices mirrors the growing complexity of the wider world of investing. Where grandpa had dozens of mutual funds to consider, we have thousands and thousands. Separately managed accounts have proliferated. So have exchange traded funds (over 160 new ETFs started trading last year).

Has the proliferation made investors happier or richer? Probably not.

In a recent New Yorker column, James Surowiecki points to a similar trend to unsatisfying complexity on the tech front. Gadgets have to offer all the latest new features or they don't sell. But what buyers want isn't what users want:

The fact that buyers want bells and whistles but users want something clear and simple creates a peculiar problem for companies. A product that doesn’t have enough features may fail to catch our eye in the store. (A cell phone that doesn’t offer a Bluetooth connection, for instance, may be dismissed as underpowered, even though relatively few Americans use Bluetooth headsets.) But a product with too many features is likely to annoy consumers and generate bad word of mouth, as BMW’s original iDrive system did. Intended to give drivers unprecedented control over navigation, temperature, and entertainment through a single device, it was so hard to use that it has been described as “arguably the biggest corporate disaster” since New Coke.

Apple tries to solve the problem, Surowiecki observes, by making complexity user friendly:

This is clearly what Apple believes it will be offering with the iPhone: a device with a remarkable range of features, coupled with an uncluttered touch-screen interface. It won’t be surprising if the iPhone succeeds, but it would be understandable if it failed. The strange truth about feature creep is that even when you give consumers what they want they can still end up hating you for it.

Even the best efforts at simplifying the complex require more than good engineering and design. Most of the employees in Apple stores are in customer support, not sales.

Learning from Steve Jobs, part II

Despite its popularity in the business world, mediocrity isn't all it's cracked up to be.

To reinforce that lesson, turn to the auto feature in The New York Times this morning. Just reading about the cast of Pixar's new movie, "Cars," has got to be more entertaining than sitting through the entire film of the Da Vinci Code.

Seems that John Lassater, Pixar's (and now Disney's) animation genius, is a long-time car nut. "Cars" is his labor of love. If the movie, which opens in June, lives up to the cast descriptions, it will be HUGE!

The voice cast includes Paul Newman, retired race car driver, playing Doc Hudson, retired racer. That's how Doc got blue eyes.

Filmore, the VW only a flower child could love, is voiced by George Carlin.

Like Apple, Steve Jobs' first venture, Pixar was born of the desire to make stuff that is "insanely great." Apple has stumbled from time to time (firing Jobs didn't help) but Pixar' s output has ranged all the way from very good to really great.

How does Pixar do it? Two clues that financial-services marketers might find useful:

1. According to this earlier NY Times article ($$$), all employees are encouraged to learn animation at Pixar Univerity. All employees. According to the dean of the university, an ex Flying Karamazov Brother, "We're trying to create a culture of learning, filled with lifelong learners.

"Why teach drawing to accountants? Because drawing class doesn't just teach people to draw. It teaches them to be more observant. There's no company on earth that wouldn't benefit from having people become more observant."

Arguably, knowledge of investing and financial planning is at least as necessary as knowing how to draw and animate. Does your IT guy know a derivative from a debenture? Can your receptionist participate in a discussion of disclaimers? Steve Jobs might tell you that the answers should be "yes."

2. Today's Times story says John Lasseter and his group visited design studios for the Big Three automakers and particularly hit it off with J Mays, the Ford design chief.

Mr. Mays and Mr. Lasseter bonded and exchanged studio visits. Mr. Lasseter learned how real cars are designed. Mr. Mays was impressed with Pixar's obsessive attention to detail. "They want to get things right even if no one can tell," he said. "If it was wrong, they would know."

How obsessive? The Pixar team hunted down vintage Hudson Hornet paint chips to make sure Doc Hudson is the correct shade of blue!

The Steve Jobs Code: what can marketers learn?

May 19, 2006. A day that will live in conspiracy theory:

Item: On this day, The Da Vinci Code opened in movie complexes all across the land. The film's plot circles around the Louvre Museum. At the Louvre, a contemporary addition to the former royal palace features a large glass pyramid in a courtyard.

Item: On this day, at 6. p.m. EDT, Steve Jobs opened his new flagship store on Fifth Avenue in New York City, across from the French-looking Plaza Hotel. The new store, located below street level in the contemporary courtyard of the GM building,is topped by a giant glass cube.

Coincidence? We think not. Just one more illustration of Steve Job's marketing genius. You can check out a few photos of the cube's unwrapping here.

For an informative article on the man in charge of Apple's stores and the creative thinking that goes into them, see this NY Times article.

Note, for instance, that the size of Apple's stores relates to "the size of the brand," not the sizes of iPods or macBooks.

Designing "wealth-management stores" is a different challenge, but here, too, creativity could pay off. A few banks have picked up on the coffee-shop approach suggested on this blog last year.

Note also that Apple found it unexpectedly easy to recruit expert staff and Apple Geniuses from the community of Mac lovers.

How do you build a community among your clients and prospects? You might emulate Mac User Groups like Seacoastmac.org and start a discusssion board. Theirs draws over 150 participants from as far away as Australia.

Might work like this: Your clients, after logging in to your online facility, are able to join a discussion group. The group might also include a few friendly attorneys and CPAs. The professionals could chip in on taxes and such; clients would discuss the people side of financial planning for the affluent:

"Should I have a pre-mup before remarrying?"
"At what age should a trust for my daughter end? Or should it be for life?"
"Should affluent grandparents feel obliged to shell out for private schools?
"We're thinking of making a sizable donation to such-and-such local charity. Is it as worthy as we think?"

You get the idea. Got a better one? Go for it.

May The Steve Be With You!

Why Apple is golden

Last spring the first post on the Trust and Wealth Management Marketing blog concerned Apple computer. So it's none too soon to go slightly off-topic again.

For Christmas your Senior Assistant Blogger received an iPod. Not a video one, not even a Nano. Just a big, old, monochrome-screen iPod. I was expecting something clunky. Instead, there in my hand was a white-and-silver art object of surpassing beauty, demanding to be caressed and cherished. Wow!

Now I see why Apple's market value has soared past Dell's. And why Jonathan Ive, the London-born designer of the iPod, was just honored by his Queen.

The lesson of the iPod, I guess, is that sometimes form is function, and I'm not sure how that applies to marketing financial services. But I do detect a useful reminder in Steve Jobs’ successful marketing of Macintosh computers.

The new "Intel inside" iMacs Steve announced last week run twice as fast as the previous G5 model. The new MacBook laptop is said to run four or five times as fast as the G4 Powerbook it replaces. Yet it wasn't that long ago that Steve was tweaking test statistics to demonstrate that the old models were just as fast as Intel PCs for practical purposes. And the old models were so cool, so convenient and relatively reliable to use, that folks were willing to believe the hyperbole. Macs survived and began to prosper.

Reminds me of our old friend Knute Alphanot, at Lake Woebegone B&T. His trust department's investment performance is never more than mediocre (though rarely less than). But Knute has a winning way of adjusting his returns for volatility, currency fluctuations, and maybe even windage. By the time he's through, he can show his clients he's always above average. Top Quartile, usually.

OK, maybe most of the clients don't believe him. But as many a consultant has pointed out, you can get away with merely decent investment performance if you do the very best you can for your clients in all other respects. Knute's department runs like a Rolex, and client communications — from thoughtful notes and phone calls to newsletters and seminars — are never neglected.

Moral: You don't need great investment returns as long as you offer your clients insanely great service. Make them feel as cherished as . . . an iPod!

P.S. I hope your investment people bought Apple, not Dell!