Way back in 1997, Apple was very nearly history.
I remember back then that I seriously thought of getting out of the graphic design business for good, I could not face a career having to use, what was then, Windows 95/NT.
I decided to hold on and hope for the best, but even I never thought that Apple could go this far.
If there’s one thing that defines Apple, since 1997, since Steve Jobs came back, it is that everything they do, and I mean everything they do, MAKES THEM MONEY.
A sh*tload of money.
Profit margins on their hardware that others can only dream of (around 40% for the Mac).
Software – since Steve Jobs returned, Apple makes the best software in their target markets (please Apple, take on Adobe!)
Content – the iTunes store makes profit on music, movies and apps.
Apple Stores – have the best profit per square foot of any retailer.
Next we have the tablet, and with the rumours of more content deals and that huge data centre built for some as yet unannounced reason, we can expect that to rake in even more cash.
But as the MacDailyNews/Businessweek articles states, what is it for?
Apple have spent a little here and there, acquiring one or two businesses that make strategic sense.
But there’s a lot of money left and it’s looking very unlikely that Apple are going to give that money to their shareholders (with a dividend), or it’s users (by reducing that profit margin).
So what’s it for?
Take a look at the graph at the top of the page – I’ll let you draw your own conclusions.
Via Mac Daily News (‘cos I aint linking to Enderle).
It seems that The Tyrell Corporation, sorry, Google went to great lengths to create an iPhone competitor, and worked very hard on their GUI, partnering with HTC for the hardware and even went to generous lengths by screwing over Philip K. Dick’s Estate, but forgot the after sales service.
It seems that they really thought that they could use the same strategy that they used for almost all of their other technological efforts, like GMail for instance; just release it, and when something goes wrong, say it’s a beta.
They completely ignored the lesson learnt many, many times by Apple, that if you want to convince someone to part with cash for a new technology, you’d better have a damn good infrastructure in place if that person wants some support.
And they do – the Apple Stores are the crown jewel in their business plan, and is one of the reasons people switch to the Mac – the safety net of a real, trained, intelligent genius to talk to.
What do users of the Nexus One have? Email support with a promise of an answer within 2 days. Come on Google.
If Google thinks that the Nexus One is giving them trouble, imagine the support calls they’ll get on revision six, when the phone jumps a shuttle off-world, killing the crew and passengers, and then seeks out it’s creator and murders him, all the while being hunted down by Google’s next prototype phone.
(Anyone who doesn’t get the Bladerunner comparisons in this post, please read the book, or see the film).
Oh yeah, and Google, just give Phil’s estate some licensing fees and stop ripping off his legacy.
I’ve posted previously about the viewpoint of certain Mac-gurus (Inak-cough!-hto), that Apple’s over zealous closed system for the iPhone is something they should abandon and allow the users to decide whether or not they can run ‘x’ software on ‘their’ phone.
Apple have stated previously that a phone is not like a computer and you shouldn’t be allowed to just run anything on it – I agree.
Along comes Google with their ‘open-and-not-like-the-horrible-closed-iPhone’ GooglePhone, and this is the result, and as if to add insult to injury you have to do this:
If you did download the Droid09 app, please remove it from your phone and take it to your mobile provider to ensure it’s completely removed.
Not only do you have to delete it, you have to take it to your mobile provider to ensure it’s totally gone.
Take note of my emphasis – not only can you not be sure it’s gone by deleting in the UI, but you have to take it into the place you bought it to sort this problem out.
If something went wrong with an iPhone, you’d take it to an Apple Store, who’d be briefed on the problem and be able to sort it out there and then. Can you imagine taking your phone back into a high street phone provider and asking the untrained, minimum-wage spotty teenager to help you?
Ah, but at least you have an open phone… can’t use it reliably because it’s full of malware, but at least you haven’t got one of those ‘closed’ iPhones…
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Upon thinking about Microsoft entry into the retail space, a few thoughts occur.
Microsoft have a really deep seated envy of everything that Apple does. Now, they’ve always had this from the very first meeting about Windows 1.0, and in the past they could get away with it.
After all, despite all Apple’s efforts, they were not a mainstream company. Microsoft and their partners dominated and no-one outside Apple’s niche had ever heard of them.
All the great unwashed saw was ever greater ‘innovation’ coming from Redmond. They did not know that this innovation was a photocopied, me-too agenda based upon what Apple did.
This approach works fine, as long as Apple remains a niche.
Can you really say that Apple Inc. is at this current moment ‘a niche player’?
Group together everything that Apple does, the Mac, iPod, iPhone etc, and their approaching 10% market share (and even greater mind-share), I think not.
Why does this make a difference? Well, Microsoft can keep up the pretense of being an ‘innovator’ as long as no-one (or at least the majority) knows that Apple exists.
This is all the more difficult, and one very good reason this is getting harder, is because of those pesky Apple Retail Stores.
People used to listen to their ‘geeky friend’ on what computer to purchase, which was usually, if not always Windows.
That’s not the case now, they see an Apple Store, go in, and more often than not, purchase. I don’t know what their footfall conversion rate is (the % of customer who enter a store and either do or do not purchase something), but according to Apple 50% of those purchases are to Windows users.
So what is Microsoft to do? Well there’s only one thing to do, fight fire with fire.
But Microsoft has a problem, and it’s a problem that cannot be got around. The PC model is proprietary OS on open hardware. Apple’s model is open OS (sort, parts of etc), on proprietary hardware.
Now I don’t care what people say, Apple’s model gives us more reliable computers, Microsoft’s model gives problems – lot of them, with more chances to go wrong.
Apple’s model is naturally fits the retail environment. People enter Apple Stores for an experience. Yes, they take their computers in to be fixed, and Apple manages that quite well, as their model keeps those fixes down to an acceptable level.
Microsoft? Their model invites problems, how the hell are they going to manage all those PC users with viruses, spam, malware and faulty hardware because their ‘geeky friend’ made their computer?
This should be interesting to watch…
This is going to be fun to watch…
Imagine the scene: Microsoft opens it’s store, hoping that people will walk through the door and fully grasp that Microsoft software can help their digital life and will be wowed by everything they have to offer and they won’t go to that funny fruit store down the street.
However what will happen is that Joe Sixpack will walk through the door walk up to the counter and say, “Ug! Computer not work, you fix!” (Along with the 20 people behind them with similar complaints).
The patient (and butt-ugly) Microsoft genius with say, “I’m very sorry sir, but your issue is a hardware issue and I’m afraid Microsoft only deal with software, I can give you the number of the Dell support-line?”
Mr Sixpack will then say, “Ug! Dellman say your software got virus, you fix!”
The Genius eyes will then light up and say, “Aaaah, yes sir then we can help you, we sell virus killing software starting at $59.95 per month for our basic package.” He then hands him a leaflet.
Mr Sixpack numbly hands over his credit card, “just make computer work – me want pr0n!”
At the end of the month Microsoft will say that their software stores are a great success, having sold millions of software packages that help their customer get more from their computer purchase.
If anything, this will force more consumers into Apple stores because for the first time, Microsoft will meet the great-unwashed PC buying public – and their problems. I really don’t think Microsoft realise that aspect at all – they really are that arrogant and full of themselves.
The will not be able to cope – it will be a PR disaster. All Apple needs to do is air a well-timed Mac vs PC add that targets this sh*t storm, and watch them come through the doors.
Microsoft, please, please, please – carry on.