Monday, April 9, 2007

Best Buy and Apple Mashup

I've been pondering over the depth of this joint venture and it is quite scary what the future prospects are for consumer PC vendors.

First of all, Apple's retail strategy is very strong but because they will only open stores in high rent districts, that still leaves a lot of areas uncovered. While someone on occasion may drive 80 miles to go to an Apple Store, that is not the ideal solution for most people.

Enter Best Buy. Before you remind me of the start/stop relationship that Apple and Best Buy have had over the years consider the fact that Apple has entered this having experienced incredible retail success so they know better what to ask for and demand to sell their products. Second, Best Buy is losing foot traffic from CD's and needs to increase foot traffic. The foot traffic from a Mac buyer is very welcome because they typically are willing to spend more to obtain a quality item. Third, seling PC's is a tired, me-too business. You need differentiation.

So the mashup between Best Buy and Apple seems at first glance to recreate the type of atmosphere, support, and quality buying experience that one has at an Apple Store, just on a smaller scale. With Best Buy's prowess, these types of stores could be opened up in all kinds of remote areas around the country where Apple can't justify a dedicated store front. Unlike previous efforts, Apple knows now how to train and develop staff to provide the kind of buying experience that they seek for the Macintosh.

If this is the case, you can walk into a clean, uncluttered, environment where someone is going to give you an informed presentation of Apple's products and their value proposition, instead of steering you to some low end PC box stuffed with trialware. Or confusing the customer by presenting a row of gray and black boxes and varying price points and no real way for the consumer to determine comparative value.

Done right, this parntership could be an extremely powerful combination. Certainly, Best Buy is touting this as the beginning of a change in their retail philosophy to match Apple's. Start with what the consumer really needs and then develop your products and services to solve that need. Apple's consumer driven approach has changed the music business, the retail computer business, potentially the cellular industry, and possibly the home media strategy. Why? Because it's apparent that they do things to benefit the customer. Competitors are often presented as doing things for purely profit or self-serving interests.

With the kind of reach that Best Buy has beyond Apple's own stores, we could see a significant ratchet in market share in the retail space by Christmas time. No other PC vendor can demand that kind of exclusive arrangement because they are perceived as offering a commodity item.

I just hope that my Best Buy is on the list.

Sea Change and Swatting Bugs

There seems to be a sea change in what is going on in the personal computer industry these days. The resurgence, scratch that, resurrection of Apple, Inc. is nothing short of phenomenal. Consider these confluence of independent events that is creating a momentous shift in the technology landscape.

From the top end, the technology industry elites are using Apple technology personally. These elites are often the trendsetters and forerunners that push down technology decisions. More and more companies are going through the exercise of considering Mac deployment - something that was very rare six years ago.

The iPod and Apple's educational success has contributed at the bottom end by creating a young class of Mac users that are very creative, energetic, and free spirited that are entering the work force and want to stay with the technology tools that they have become accustomed to using. This puts further pressure on businesses to accomodate these young, talented professionals. More than one business manager has been convinced to allow Macs in their organzation after seeing some of the creative results that Mac users produced using the standard tools that came with their Mac.

The middle thrust is the growth of Apple in the small to medium business market. Here, Apple has a much stronger presence than their overall 5% or 6% market share suggests. These businesses ask their software vendors for cross platform solutions. The software vendors not only have to build in Mac support, but also have to ask their integrated hardware devices for the same support. This also puts pressure on development tool suppliers to allow as much as possible, a single code-base for the core application with hooks for the various OS's that must be supported. Eventually, this may pull some developers from a Microsoft-only approach.

There are of course, deeper issues that have caused these market forces to exist in the first place. But I wanted to illustrate what is happening the marketplace. Being in a staunchly PC industry myself, I am witnessing business that used to swat the idea of Mac support like an irritating fly to actually creating and promoting Mac support.