Unless you live under a gargantuan luddite rock, you already know Apple will launch the Apple Watch on Monday, March 9th. And everybody is handicapping how good it’ll be, how many Apple will sell (projections range from 10-30 million, but some are saying even up to 50 million). There was a rumor last week that I saw at daringfireball.net that Apple would wind up consuming nearly one quarter of the world’s gold supply, in order to make the high end Apple Watch Edition, which of course will come in solid 18k gold.
All of this got me thinking… What if Apple is a lot more than a technology company? Asked another way, if the ‘internet of things’ gets going, can Apple become much more than a computer and phone company and profitably produce watches, shirts, couches, desks, kitchen appliances, toys and who knows what else?
What if Apple is the next Hermes?
Hermes was not always a scarf and tie and beautiful $20,000 ‘Birkin’ bag company. Hermes was founded in 1837 by Thierry Hermès. In the middle 1800s, they created high-quality wrought harnesses and bridles for the carriage trade and they ‘branched out’ into horse saddles in the 1880s. In fact, the first piece of luggage they made was to transport riding saddles. They were a company of utilitarian luxury, part of the everyday life, and I assume, capturing a good portion of the high-end of the horse bridle market.
Doing research for this little thought experiment, I also uncovered that Hermes was a technological leader. The company saw (on a trip to visit Henry Ford’s factory) the zipper in the U.S. and bought an exclusive european license for the technology. Hermes was the creator of the world’s first leather jacket with a zipper, which was custom made for the Prince of Wales see Wikipedia. Only much later did they start on couture, scarves, ties and expensive leather handbags.
Hermes, like Apple, also stayed true to its real differentiator: quality. “We don’t have a policy of image, we have a policy of product.” said former Hermes CEO Jean-Louis Dumas (cite) That's a spitting image to the oft-quoted Steve Jobs-ism: “Design isn’t how it looks, design is how it works.”
Returning to Apple, I’d like to leave you with the following evidence for their desire to be much more than a computer company: Apple retail has the highest earnings per square foot of any retailer. Apple’s 250 stores (that’s US, there are around 425 globally) are often described as excellent in terms of operations, aesthetics and customer satisfaction. Part of that success because Apple poached Burberry’s CEO Hannah Ahrendts (that required a big investment: $73 million including a $33 million signing bonus and of Apple stock to replace her Burberry stock she lost. When Apple hires Marc Newson as a designer (part time only and now it’s obvious what he was working on) and is rumored to be raiding Tesla’s engineering ranks, you do have to wonder what kind of brand they’ll be in 175 years. Could they be Hermes?