Random thoughts on Facebook, Apple
Why I think Apple is better positioned than Facebook to capture young consumers
I listened to the Jan 7 episode of the Pivot podcast, featuring Kara Swisher - one of the best known and feared / liked journalist in Silicon Valley - and NYU Professor Scott Galloway. In this episode, Galloway spoke pessimistically about the potential of Facebook's Oculus VR headset and, by extension, Facebook's metaverse ambition overall. He views Apple to be a formidable competitor who would likely gain a considerable edge over Facebook on VR (or Metaverse in general) - and I tend to agree.
Hers's what I think:
Two things young consumers demand - novelty and identity. Apple is better positioned than Facebook to satisfy both. Below is why.
- Apple could launch new iPhone or electronics models, and that is considered "new" enough to generate significant interest, hence satisfying novelty.
- In contrast, there isn't really much you could do to innovate a social media platform like Facebook - at least I think it's hard for Facebook to launch new features that generate the same wave of interest as a new iPhone model release. Increasingly, what generates interest in the social media space is a brand new platform - not just new features - such as Instagram as a stand apart application from Facebook. Interestingly, Facebook has been trying to copy competitors' features (e.g., YouTube, Instagram) and self-develop similar features themselves, as part of Facebook, but it never took off somehow.
- The above explains why Mark Zuckerberg is going on a buying spree, e.g., buying Instagram and WhatsApp, to fend off competition in the social media space and maintain Facebook's dominant position.
- Apple is a hardware company that earns software margins, because people think of the brand and the products as "cool". Young consumers love Apple products, because they think using them is a status of being "techy" and techy is the new trendy. That's why some say young high-net-worth individuals may increasingly opt for an Apple Watch over a Rolex.
- Facebook is seen as something for the millennials, and it is not surprising to see Gen-Z say it is something for their parent's generation (and too "old" or "not cool enough" for themselves). Hence, Facebook is in trouble of being left behind by the young generation, as it is not seen to match young people's identity.
- Not to mention in recent years, the Facebook brand is tarnished. There have been numerous scandals, accusations, regulatory inquiries etc., and the public have lost trust in the brand. By rebranding itself to Meta and focusing on the metaverse corporate ambition, Mark Zuckerberg is both placing his bets on an area with disruptive potential (although Facebook's chances of coming up on top is a separate topic), as well as staying away from a somewhat-damaged Facebook brand.