“Can you pass me my iPhone?” a friend recently asked me when we were out together.
What is noteworthy about this sentence is that she referred to her mobile by brand – have you ever heard anyone say ‘can you pass me my Samsung?’

Apple doesn’t produce phones. It produces iPhones. You don’t own a phone, you own an iPhone.

Substituting a brand name for a product is not uncommon – think Coke or Glad. However, the difference here lies in the fact that Coke can refer to any type of cola drink, and Glad to any type of cling wrap. Only phones produced by Apple are iPhones. The iPhone exists within a category of its own.

Now, it’s no news that Apple has been able to achieve massive brand presence and a strong loyalty base. So, what can we learn from Apple’s marketing victory? And can it be replicated?

Most Apple loyalists will tell you that Apple offer functionally superior products, and are thus a more successful company. However, when consumers pay double for white Apple headphones, something other than functionality is at work. In marketing terms, reducing the success of a brand to the products it creates is a simplistic view. Products can be imitated. It is the brand that holds the unique relationship with their consumers – whether they acknowledge it or not.

It is about building something bigger than your product. Something people can use to connect to each other. Red Bull connects its customers through a common interest of extreme sports. Blackmore’s is currently building an online community dedicated to health and well being. Like Apple these brands are creating tribes – where emphasis is on people, not product.

What do you think of this tribe mentality? Can it work across all categories?

Latitude Insight’s case study of iPhone users uncovered just what consumers find so fascinating about the iPhone, why they use that four-letter word – LOVE, and how brands can become part of this ‘affair’.

The study revealed that Smartphones change user’s lives. Initially thinking they are getting a new phone, with email and web capabilities, they find iPhone gives them so much more.

It helps them communicate. It makes them more connected because of its web capabilities. But going even further, the real benefits are about being more entertained, more efficient in what they do, having more freedom because they are not stuck to a computer, and having more ability do things away from home and work. It’s a whole new world where users can do things anywhere, anytime.

Smartphone users also admit to relying less on their computer now they have a mobile device. With predictions that by 2011, 85% of handsets will have some sort of browser, it’s important brands recognise the opportunity mobile devices gives them in terms of another distribution channel to engage with their customers.

Furthermore, with over 100,000 apps available, many free, it’s important apps have lasting traction. They need to ‘do’ something and have a tangible impact on time or convenience to be worthwhile and valued by users.

How many take away coffees do you buy a day? Even if it’s only one, that’s probably $3.50 out of your pocket that you spend without a second thought.

So what about spending  $2.99 on an iPhone app – maybe a game to use in your spare time, or a utility designed to save you time. Or how does $1.19 sound, because that seems to be a common price point? Why you could even get three apps for little more than a latte.

You wouldn’t think that it would be an agonising decision, but we were surprised to find that price is a sensitive issue when it comes to buying apps. And iPhone users themselves don’t understand why they waiver over spending less than $3 on something lasts so much longer than a hot drink. Here’s a taste of some of the comments from our iPhone Online Research Community:

“I am dancing around the idea of a $6 app at the moment that I really want (but not rushing in). Weird psychology really since I have no problem throwing far more than that away on far more frivolous things”

“I only pay for stuff with a lot of good reviews and things I know I’ll like. Otherwise it’s free. Even if it’s an app I’m not sure about and it only costs $1.19 I’ll think twice, three times.. sometimes four times”

“I don’t feel like I should be paying any more than I already am/have for the iPhone considering I use it mostly for communication purposes. I don’t think I will ever pay for an app, but I’m waiting for something to prove me wrong!”

Our frugal friends were a bit bemused at their own behaviour, and put it down to both the intangible nature of apps, and the predomiance of free apps which create a mindset that all apps should be free or so cheap that purchasing doesn’t require a second thought.

There are people who are willing to spend ‘big’ money on apps, whether it’s a $9.99 Jamie Oliver recipe collection or a $69 navigation system. But the apps they pay more money for have to do something - they’re rarely games or time wasters. Even so, our ’spenders’ were more likely to trial a ‘lite’ version before downloading the full paid-for version. Try before you buy matters even more in appland, where the refund policy is non-existent.

There’s no doubting that apps are what makes the iPhone eminently attractive and indispensible, but iPhone users are cautious with their money, and while so many apps are free, many users are happy to dabble in app-lite. This may have interesting consequences for iPad, both in terms of users’ propensity to purchase 3rd party content and apps, and the pricing strategies employed by content providers and app developers. And once big brands with big development budgets cotton on to creating new (free) brand experiences via apps, maybe we’ll become even more reluctant to open our wallets.

The last couple of days, all we have heard is iPad, iPad, iPad.  While I’m not sure iPad will be as revolutionary as the iPod or iPhone, what I do know is that Apple will make a lot of revenue from their iTunes store.  Did you know that in 2009, Apple accounted for 99.4% of all mobile app sales?

According to the Gartner report that’s a big chunk of the $4.2 billion in mobile app revenue that Apple scored in 2009 alone.  Apps are growing by the minute with the market estimated to almost double in the next year, to 4.5 billion apps.

For marketers this creates a number of interesting questions and opportunities:
- What makes a good App?
- What are consumers willing to pay for?
- How does the market learn about Apps?
- How do I make sure I get my Apps noticed ?

Over the coming months Latitude hopes to answer some of these questions with their iPhone user research community.  Not only will we ask members to ’show us your Apps’ we want to drill down to understand how they find, choose and interact with their Apps.  Which ones can’t they live without and most importantly, which ones add to their brand experience.

So what Apps can’t you live without?