He says that critics call Apple’s new retail-outlet strategy crazy, but Charles Haddad, who writes the “Byte of the Apple” column for BusinessWeek Online, thinks it’s a “brilliant way for the faithful to spread the word to newcomers.”
latest column, Haddad denounces the “common myth” that Apple can’t hook new users. Various surveys, by both Apple and independent consultants such as IDC, have shown that the Mac remains alluring to lots of folks, he says.
“A few undisputed findings: About 43 percent of iMac buyers are newbies to the platform,” Haddad writes. “In total, nearly 30 percent of all Mac sales are to first timers, with 15 percent sold to Windows expatriates. Why, then, is Apple’s U.S. market share stuck at about 5 percent? Because the company is not attracting enough first-time buyers to completely offset defections by existing customers. While the number of Mac users continually rises, Apple’s share of the PC market is shrinking in percentage terms.”
Some people may actually leave the Mac platform because they prefer Windows, but many others are coerced to abandon the platform to conform with PC networks at school or in the office, Haddad opines. But that doesn’t have to be the case and that’s why Apple has launched its US$85 million investment to build a chain of 25 Apple-branded retail stores, he writes. What’s more, Charles R. Wolf, an analyst who covers Apple at Needham & Co., believes Jobs may open up to 100 stores by 2003.
Some industry analysts think it’s a foolish move. However, others (with whom Haddad agrees) think the stores can potentially help Apple increase its marketshare. How? By showing non-Apple users the Mac’s “unique ease of use” and outstanding hardware-software integration.
“Who’s going to point it out to them, some clerk at a computer superstore who’s better acquainted with the components of a combo meal than that of a PC, let alone a Mac?” Haddad says. “Apple can no longer tolerate such ignorance. It’s repositioning the Mac as the ultimate creative tool, able to make everything from Web pages to novels to music to movies. This is not intuitive stuff. People need to be educated, shown how you can edit a home movie on your Mac with iMovie software. And that’s exactly what Apple plans to do in its stores.”
The columnist also doesn’t feel that Apple is risking that much financially. He points out that, according to Wolf, “who has built a complex spreadsheet to pinpoint just how well the stores must do to turn a profit,” Apple must sell 71 units per week to break even, “a number well within reach if the 3,000 weekly visitors show up as expected.” And every new store has been mobbed with, on average 5,000 visitors, although that’s certainly a number sure to decline in coming weeks as the novelty wears off.
“The stores represent a campaign in which every Mac user can help out,” Haddad says. “No one wants to eat at an empty restaurant. Ditto for a computer store. So go visit any Apple store that has opened in your area. You don’t have to buy anything. Just look busy and happy to passersby — help shatter the myth that newbies won’t use a Mac.”