Vitaly Demin Senior Strategy Consultant Read about Vitaly

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August 2010

Apple has never allowed sex and porn content apps into their AppStore. Many people have criticized them for that but there is a deep strategy logic in the world’s best marketing machine making this decision.

First, look at how the Apple brand is positioned in general and which demographics their products target. The brand of the Steve Jobs’ organization has been transformed into an absolute icon of the most innovative technology that exists today and their marketers do everything to preserve the reputation and the upscale level of the name.

While Apple sells their products to everyone who can afford them, they focus on upper income customers. A very basic demographic analysis tells us that statistically, the more money people have, the higher their level of education is. The age of this segment also tends to be higher. These two factors are very indicative of these people's values and the way they view the world. While sex and porn are universal concepts and can apply to any person on earth, it may not necessarily be well perceived by these affluent people who buy Apple products.

Not long ago when asked about this, Steve Jobs said "If you want porn, get an Android." In reality, what Apple does is protecting the brand of their AppStore and consequently that of the company and their products. This is much more expensive than all the money they could be making by selling adult content apps in their AppStore. When banning these apps, they are not worried about “disappointing” their buyers because in reality, any content on the web can be accessed through the Safari browser on the iPhone, iPod or iPad. So the access and the content are there, there’s just no app for that.

And finally – is there really a person in this world who wants to buy any of these three Apple devices but would not because of this restriction? Doubtful.

This eBook is a brief insight into the core of the executive management of Sony Corporation, the core that is unfortunately filled with one of the most perilous human qualities – arrogance.

For a very long time now Sony has been known as an organization permeated by arrogant attitude toward their suppliers, their distributors and now their customers. This culture is felt everywhere in the world. I remember having meetings with Sony people in Moscow Russia when I consulted the largest electronics retailer in the country. These meetings were very adversarial and not a most pleasant experience. Also, as I worked with electronics retailers in Kuwait, Emirates, India, England, US and other countries, the opinions I received about Sony were the same. Nobody liked them and nobody wanted to do business with them because it was just too painful. Obviously, they could not stop carrying Sony products in their stores but some of them did try to reduce the assortment. Sony rarely partners. They dictate.

This work is an attempt to show how corporate arrogance affected the decisions Sony made along the way, the decisions that led to mistakes, mistakes that got them dethroned from the position of being the best and the most admired consumer electronics company in the world.

I hope this eBook helps other companies see a bigger picture of how decisions that are made inside their organizations affect their brand, their customer loyalty and profitable business growth. Very often top managers do not realize that many of wrong decisions are made not due to the lack of knowledge about the problem but due to the mentioned above human flaw – arrogance.

The 2nd edition includes financial updates from 2010 as well as other recent events associated with the Sony organization.

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