Avon B7 wrote:
In the end they finally 'got it' and opened their own stores (US only at first) but gradually things went worldwide and the rest is history. Without the stores we would not be where we are now.
Other factors also had a major influence in persuading people to splash out on Macs. The Halo effect was real. The switch to intel was necessary if PPC couldn't move fast enough. Office for Mac was another key factor.
But it doesn't matter what you have to offer if people just aren't seeing your product in stores and the old model of street stores in low traffic areas was killing any likelihood of getting into the domestic market.
The switch to Apple Retail was the real lifesaver for Apple until it could create its other pillars (iPod, iPhone, iPad).
Ironically this success has led us back to one of the original problems: overpriced hardware. The problem is that people lap it up so they won't bring prices down. Apple's margins are high again and now the middleman is basically gone. It's actually worse. Apple has such negotiating strength on components that it can now force its some competitors sit out of certain fights.
It took them far too long long but they got the retail thing sorted out in the end.
A very interesting thesis - thanks for that. I'd actually argue that the Stores and the iPod were contemporaneous (even though the Stores were planned earlier) and that the growing success of both were a kind of 'feedback reinforcement loop'; in other words the two had a symbiotic relationship which grew tenfold when the iPhone came along. Would the iPod and iPhone have been so successful without the Stores? Possibly, though not as much. Would the Stores have taken off with only computers as a focus? Probably not.
Apple has revisited its hardware prices since the dark days of the 90s, but nowhere near as much as its competitors. It seems content to sit on a mountain of cash rather than bring prices down. I suspect the real reason for that is that Apple still sees itself as the BMW or Jaguar of digital electronics, rather than a Ford or Nissan, and fears that upping its production considerably would erode that perspective. In other words, making massive margins on quality niche (but increasingly popular) products with a million imitators, beats being (yawn) taken for granted until no-one loves you, as happened to Microsoft.