“At this week’s Macworld Expo, Apple rolled out its first Intel Macintoshes and a few new software packages while bragging about the great success of the iPod device along with iTunes,” John C. Dvorak writes for MarketWatch. “Amongst the successes is the somewhat overlooked locomotive that pulls the Apple train: the Apple Store.
“Apple has proven, hopefully once and for all, that the branded retail specialty store is the key to success in high margin design-oriented high technology sales. It works with cars; it works with clothes; it works with shoes. Why not computers? And unlike generalized computer stores such as CompUSA the vendor can control their own sales pitch,” Dvorak writes. “I have personally been baffled by two things over the 30-year era of desktop computing. The first is why every brand name computer-maker never realized that they needed their own storefronts. The second was why Apple took so long to do theirs. Now look at them.”
“According to Steve Jobs in his keynote at MacWorld Expo, the company’s 135 retail stores just had their first $1 billion quarter with 26 million people visiting during the past three months,” Dvorak writes. “At this point it is becoming obvious that the other players in the computer game (Toshiba, Dell, HP, Lenovo and others) will have to consider this model in the years ahead. They’d better.”
Full article here.
Only Apple has Mac OS X. All of the others rely on Microsoft Windows which makes it pretty tough to differentiate your product from your competitors. Toshiba, Dell, HP, Lenovo, and others basically all offer the same hardware stuck with the same old mediocre user experience. All they really have to differentiate themselves from each other is price. Apple’s retail strategy works because Apple and their products are unique and innovative, not just another Windows box assembler (or WMA-based MP3 player maker) like all the rest.
Funny flashback quote: David Goldstein, president of the Channel Marketing Corp., on Apple’s retail store launch, July 16, 2001, “It’s completely flawed. They’ll shut it down and write off the huge losses in two years.” (Source: Taipei Times)
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Touché
Dvorak must have been drunk.
If I recall… others have already tried this and have failed misserably. Who wants to go in a ‘dull’ little store to see ‘dull’ little boxes?
*game over*
The stores are not ‘the locomotive’ that drive Apple’s sales… what drives it is mouth to mouth recomendations and its great products…
Sounds good in the headline though..
I was in the Apple Store in NE Atlanta on Sunday afternoon, and it was packed with customers. I was amazed that there were people in front of every Mac in the store. Kids were sitting around the low table trying out the educational and game software. And all of this was happening just 30 minutes before the mall was closing. I had no idea that the Apple stores were so popular.
So many so-called experts thought the stores would fail. Like the iPod.
OK, given the MDN take on this, which I can’t really argue with, what would be the lesson learned by Toshiba, Lenovo, Dell, etc. Probably that, as Apple becomes more and more the BMW of computer companies, if they want to attack that market, they will need to use some of the winning ideas that Apple has demonstrated, including showroom stores. The question, though, is whether those makers can truly differentiate their PCs (by tweaking the OS? by adding extra added built-in hardware? who knows?) enough so that they can truly compete against BMW, or will they all end up looking like a Chevy with a fancy paint job. I have a feeling it will be the latter.
But don’t underestimate the power of competitive forces. As soon as those players really start to hurt from Apple’s success, they will not hesitate to jetison Microsoft from at least parts of their product lines, if that’s the only way they can gain street cred.
You mean me saying “Dude, you’re getting a Dell” isn’t enough?
Bummer man. Hey, the walls are starting to move! Now the picture on the walls are melting! I’m hungry…
While I agree overall w/ Tergenev’s comments, the BMW analogy goes a little far…
My Macs are WAY better than BMW!!!! My BMW, in excellent shape w/ low mileage and not even a ding in the doors did not exactly hold it’s value well….
And after taking it in for it’s annual check-up, I was advised by my BMW dealer that it needed $4300 worth of general maintenance work!
I dumped that turkey! What a rip!!!
Meanwhile, my Macs have always been an outstanding value in terms of ownership experience and total operating costs in direct contrast w/ the Bimmer experience!
The tech support at the Apple stores is another key element. I have used a Mac since 1984 but I had a corrupted internal drive on an Ibook that I couldn’t retrieve data from. I had to join their pro service ($99) but then they worked on the disk on Sunday for hours and retrieved all the data. Have serious problems with a Dell on a Sunday? Good luck!!
MDN: you are so on it!
The other hardware manufacturers can open a storefront BUT there really isn’t anything that can ultimately differentiate their product from each other.
Even if one manufacturer comes out with a great design (not) the others will copy it and there goes the competitive advantage.
So they finally go after the lowest common denominator: Price.
And they won’t be able to make money to continue to support their R&D, which will be copied by the rest of the bunch anyway.
A good example is Creative – they come out with a 99% copy of the iPod down to the color but they can’t win because they don’t have the software differential to make it unique. Then they go to lowering the price to compete. But Apple still is unique with its total package.
My two cents.
I somewhat disagree with MDN’s take. Dell, HP and others could use their own store to separate the buying experience from say Best Buy. If you went into an HP store they might be able to make it seem less confusing to the average buyer.
In keeping with the auto analogies, HP/Dell/Sony could do a new brand for their high-end products. When Honda created Acura people thought they were crazy but they and Lexus and Infiniti have all done well. I’m not saying the guys at HP/Dell/Sony could pull this off but if they did it might serve them well and it would be a better buying experience.
Sony has stores, albeit not many. Is it helping them?
What ever became of the rumors of Microsoft opening the “Microsoft Experience” store on Times Square in New York City? (yeah, I know – viruses, spyware,and the BSOD were determined to be integral parts of the Microsoft experience. Maybe that’s what killed it.)
as for stores..let’s look at what available..
Gateway = gone asta la bye bye!
Dell kiosks = ummm, now there’s a expierence! (NOT)
Sony Style = hangin on by a thread…if they are not careful, the Sony stores will go the way of the Dinosaurs..
Apple Store = user experience is key…product availability…equals, Unprecedented.
Dvorak was one of the guys on the now defunct ZDTV that proclaimed what a bad idea it was for Apple to open retail stores.
Other analysts were quoted as saying that Apple would be boarding up the last of the retail stores after a mere 2 years.
Yeah, Dvorak is often wrong but rarely uncertain. Actually, he reminds me a great deal of most of the people who post on sites such as this one. Doesn’t really know anything more than anybody else, but at lease he is paying attention to what is going on and comes up with interesting takes on what might happen next.
And besides, He gets no Spam!
“Microsoft Experience” Store – Here’s the scoop!
Upon entering, you will be required to sign a statement swearing that you won’t sue MS, the store, or any employee ever or you can’t go in. Then, they’ll cough in your face constantly to guarantee you’ll get sick. A store clerk then will follow you throughout your visit and toss junk mail into your shopping basket. Every few seconds a mentally challenged teenager dressed as a wizard will get in your face and spit out inane advice in very slow steps on things you don’t want or need. It will be awkward and embarassing. Halfway through your visit, a clerk will demand your credit card and charge you a fee if you want to continue your shopping. None of the store demos work but demonstrators will drone on about how a product is better than anything ever invented. Hidden cameras are everywhere but the feeds go to secret remote locations. Random products on shelves are booby trapped to explode. The store exit is marked enter and no one knows why.
Ampar – brilliant, man! That’s one of the funniest postings here yet and the competition’s pretty stiff. Ever see Terry Gilliam’s Brazil? That’s the flick about the distopian future society where everything looks kinda modern but nothing really works. That’s the MS Experience!
Cheers, all
Thanks, R Badger! BTW, loved Brazil. There’s also a bit of George Orwell wrapped into the MS eXPerience.