September 20, 2005

All signs point to iPod’s nascent Nano becoming a huge hit. Apple’s iPod is a divergence brand if I ever saw one. And the new Nano enhances Apple’s reputation as the country’s most brilliant exploiter of divergence concepts.

Divergence products create a new category, have a new name, and perform a single function. Example: Gameboy in handheld games, Palm in handheld computers, Nokia in cellphones, Lexus in luxury Japanese cars, BlackBerry in wireless email.

Diamond Rio pioneered a new category, the MP3 player. Then Apple introduced the iPod, the first MP3 player with a hard drive. Now there were two categories of MP3 players: flash memory and hard-drive players.

The Nano makes it three categories. Instead of the 20 or so songs a traditional flash memory device can hold, the Nano has a high-capacity flash memory that can hold up to a thousand songs.

Apple is also making a wise move my discontinuing the iPod Mini which would have become a product in the mushy middle between the mega storage of the iPod and the small size of the Nano. The marketplace, just like nature, favors the extremes.

Unlike divergence devices, convergence products try to bring two categories together. Most companies are chasing this dream with products like interactive television, the tablet computer, the TV computer, and the smart phone.

But even Apple made the error of partnering with Motorola for the ROKR phone which can play iTunes. The early reviews were mostly negative and sales have been dismal. Yet critics still insist that Apple needs to hurry up with a true iPod/phone combo. And that they face a big risk by not going after the iPod-phone market quickly. Even though the ROKR is a failure, critics don’t ever question the validity of the convergence theory but rather insist that product execution is at fault.

Wrong. What iPod needs to do is stay away from phones all together. Animal species don’t combine and neither do product categories. While flying cars, auto boats, interactive television and smart phones capture the imagination of the public, they seldom do well in the marketplace. Think about it. An auto boat at best will only float like a car and drive like a boat.

A Nano will beat the combo device every time.

Apple’s iPod is not going to be a monster brand because it took a great idea and looked for ways to move it into phones. Apple’s iPod is a monster brand because it took a great idea and made it even better. Nano is another step in the right direction.

Divergence is the key to branding success.