This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

What Ever Happened to Apple's Halo Effect?

NEW YORK ( TheStreet) -- Those of us who harp on the perceived need for Apple (AAPL - Get Report) to release a new product might be missing something.

We don't talk much about Apple's halo effect anymore. That's the notion that you buy one Apple product and love the experience so much you buy another and maybe another and so on.

We observe the halo effect from several standpoints, however, the earliest, most common and most powerful illustration involved iPod buyers going on to purchase a Mac computer. Customer service and overall superiority of Apple products drive the halo effect, but it also has something to do with seamless organization of everyday life. When you connect an Apple gadget to a Macbook, it's easy to use and situate everything from music collections to appointments to contacts.

As PC sales continue to fall, Mac sales keep going up. That says as much about Apple's halo effect as it does the increasing irrelevance of companies such as Microsoft (MSFT - Get Report), Dell (DELL) and Hewlett-Packard (HPQ - Get Report).

At some point, however, this synergy -- for want of a better buzzword -- will fade. If Apple continues to merely refresh existing products or make expected cosmetic changes, it makes it less likely that the halo effect grows stronger and the overall ecosystem wider.

Consider what Jeff Bezos is doing at Amazon.com (AMZN - Get Report). He has the company in areas it probably has no business being in, however, it's all about extending Amazon's reach. Amazon has no idea what it's doing -- relatively speaking -- with something like original programming, but it's in the space to further Instant Video, which pumps Prime and, thereby, helps increase core e-commerce sales. Same type of logic applies to the slightly-expanded Amazon Prime.

While I'm not saying Apple should go quite as willy-nilly as Amazon -- the companies have very different core goals -- it absolutely needs to find a way to infiltrate more/other aspects of its customers' lives.

For example, if you have an iPhone and love it, you might be more likely to stick with it -- even if it doesn't see revolutionary changes -- if that iPhone works in concert with some sort of living room technology, preferably a television set. Same goes for iPad. Historically, Apple has done a great job making it easy for you to own just one Apple product, but establishing the allure of owning more than one and getting them to easily and efficiently work together.

Nearly every single rumor I hear about Apple's plans doesn't sound like Apple at all. A "cheap" iPhone. Copying others by going with multiple colors or a larger screen size. Getting involved in expensive content deals with big media companies. None of this makes much sense.

When I think of Apple and world domination, I don't think of marketshare; rather, I think of the most sticky and aspirational ecosystem in consumer electronics.

-- Written by Rocco Pendola in Santa Monica, Calif.
Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
DELL $0.00 0.00%
AAPL $121.30 0.00%
AMZN $536.15 0.00%
HPQ $30.52 0.00%
MSFT $46.70 0.00%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs