Apple Stores: Tactical Success, Strategic Failure?

from the good,-but-different-results dept

While all the straightforward evidence suggests that Apple’s retail story strategy is doing great, Business Week takes a closer look at some of the numbers and begins to question whether or not it’s making the strategic impact that Apple had hoped for. While Apple initially claimed that the stores were only designed to be showcases (just like Sony’s stores), they’re actually selling quite a bit of product, and have become something of a cultural landmark. Still, one of the main strategic reasons that Apple launched the stores was to win over non-Macheads and convince them to make the big switch. While there are some anecdotal stories about people switching, the overall numbers don’t support the idea that Apple is really convincing all that many people to leave the PC world. So, while the stores may be a great tactical success, they may have missed out on what was expected to be a strategic win.

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Comments on “Apple Stores: Tactical Success, Strategic Failure?”

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Jeff says:

Switch to what?

Apple has released almost no new computers since last September. I’m ready to purchase a PowerMac, but I am not buying the current line which is now outdated. And why would anybody buy anything with a G4 in it? PowerBooks are painfully out of date. iMacs are woefully underpowered and overpriced. Apple seems more interested in selling iPods than computers anymore. I’m starting to seriously think about purchasing an Opteron based system instead of a dual G5 PowerMac.

auMooseCowherdRoadkilld (user link) says:

Re: Switch to what?

while it also annoys me that apple is slower in hw updates, cpu’s, memory & disk are fast / big enough that incremental increases arent noticable or justified by the $$. making them smaller & less power hungry is an emerging market ie mini-ipods.
thou a vary fast ‘gaming’ laptop would be nice 🙂

i have an ibook & several x86 boxes including one win2k that is mainly for (latest) games, an area that apple is poor in.

one of the reasons i have an ibook, is that its unix and its not micro$oft. it also works. it very rarely ‘bsods’. it doesnt get viruses. it does updates easily. i dont spend hours f*king around with trying various combinations of drivers or rebooting because the mouse moved.

i think this is a marketing strategy that apple dont get. how many hours/$$ is wasted in corp workplaces due to m$ viruses ??

while a dual opteron will be really nice, what os (& apps) are you going to use on it ?

Agusut Jackson (user link) says:

Switch strategy is so three years ago

Anybody who is talking about the Apple Store as a strategy to get people to switch from PCs to Macs has failed to catch on to Apple’s strategy change from two-plus or even three years ago. The computer really is no longer the core of the Apple strategy really is the iPod. The other respondents to this string seem to acknowledge that. More specifically the iPod is the entry point to a new strategy for Apple. This strategy seems to recognise how customers are using their PCs today.

I wouldn’t be surprised to see Apple push the notion of the digital media hub further and further to step on the toes of Sony, TiVo and other consumer electronics providers by launching some sort of non-computer “hub” at some point. Others have tried with little success, but Apple have shown some savvy in spaces where others before them have failed. On the digital media front Apple seem to be the only brand out there that appeals to wide segments of the population, encompassing concepts of cool, easy (or at least easier) to use and even a little geeky in a good way, and all the time being both populist and exclusive at once. The stores play right to those strengths and that strategy.

(Before you say it, yes, I am familiar with the Newton and how Apple failed while others succeeded. They’ve come a long way since then.)

Jason Mazzotta says:

Re: Switch strategy is so three years ago

Apple can’t afford to switch its focus from its computers. Its computers are where most of its profits come from, but that sector of its business is not growing (negligibly according to their SEC filings, check the 10-K’s)
If they fail to convince people that the iPod is part of the experience of using a Mac, they either have to sell (at least) 3 iPods for ever Mac they fail to sell, or lose profits. Their marketing campaign for the iPod certainly has not made this commnection. You can’t GROW to a $10 billion/year company (as Fred Anderson said they wanted to do), with their current strategy.

George says:


The problem with Business Week and Wallstreet in general is that if something doesn’t produce immediate results they declare it a failure or “tactical” rather than “strategic”. They are short-term thinkers.
People just don’t switch overnight. They don’t upgrade overnight. Strategic changes take time, most times years. Strategic is long-term, tactical is short.

KenC says:

Just because Apple marketshare is declining does n

…that there are not many switchers. In a growing PC market, one could have both more switchers and a declining Apple share. This is often overlooked, and is the same concept as Apple could sell more computers and still have a declining share, as the overall PC market is growing faster.

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