“The [Mac] Geniuses – tech support staffers clad in black, offering free advice from behind a sleek, barlike counter – were an afterthought when Apple expanded into retailing in 2001, another non-traditional tool to bring in shoppers and draw attention that Apple computers were not getting at traditional computer retailers,” Jefferson Graham reports for USA Today. “The concept has become so successful that 100,000 people visit the Geniuses every week. And the stores represent nearly 50% of Apple’s retail sales.”
“Thanks to brilliant marketing, savvy neighborhood locations and a revival of the company’s fortunes sparked by the hip iPod digital music player, Apple stores are hot. Walk into one in Los Angeles’ outdoor mall The Grove, in New York’s Soho district, on Chicago’s North Michigan Avenue or in Austin’s Barton Creek Mall, and it is likely to be jammed with customers. Saturday, Apple opened its first European store, in London’s West End district. Next month, the 100th store will open, in Bethesda, MD,” Graham reports. “Not bad for a company that serves just 3% of the computing public.”
“Longtime Apple analyst Charles Wolf, of Wall Street securities firm Needham & Co., calls the retail stores Apple’s ‘hidden secret,’ because they generate so much cash: $376 million of Apple’s record-setting $2.3 billion in fiscal fourth-quarter revenue, with store sales up 95% from the same period a year ago. Apple stores are on track to generate $1.2 billion this year. Apple’s fiscal 2004 revenue was $8.3 billion. ‘Half of the people who walk into the stores are Windows users,” Wolf says. “They come in not because they want to switch but because the stores are different and so inviting. Do they walk out with a Mac? Probably not. But they do leave with an iPod, which they might not have done otherwise.’ The Apple Store grew from a small idea to a large part of the corporate profile. The stores make money and draw crowds, but they haven’t reached their main goal: getting Windows users to switch to Macs,” Graham reports.
“‘Why that hasn’t happened is such a mystery to me,’ Wolf says. Apple’s overall market share is still 3%. Even if adjusted to include only the consumer segment, it’s just 3.5%, Wolf says. Johnson isn’t concerned. He says that 56 million computers are sold a year and that Apple’s annual supply of 2 million or more is healthy. ‘Computers are a big, diverse market, with consumer, corporate (and) education categories,’ he says. ‘You don’t need a lot of market share to be a big and profitable business,'” Graham reports.
Full article here.
MacDailyNews Take: Increased Mac market share hasn’t happened yet because it’s still too early. People holding onto their Windows boxes for the past 2 or 3 or more years may soon be in the market for a new computer. Hopefully, they’ll stumble into an Apple Store and learn about the Mac option to Wintel hell, because they sure won’t find out anything of value about Mac OS X from Apple via TV or print ads. Note to Apple, now would be a good time to tell the world about Mac OS X in major TV and print campaigns. Most “average” people we show Mac OS X to are completely surprised that it even exists. Showing them Exposé alone reduces them to awe. For some unknown reason, Mac OS X seems to be Apple’s real “hidden secret.”
Related MacDailyNews articles:
Top Ten things Apple needs to show the world about Macintosh – July 30, 2003
Apple opened its first European store, in London’s West End district. Next month, the 100th store will open, in Bethesda, MD,” Graham reports. “Not bad for a company that serves just 3% of the computing public.”
—
But a much larger slice of the CONSUMER MARKET..
Seet the word PUBLIC.. that doesn’t immediatly make me think of bank terminals and cash registers..
oops.. he says apple’s share of the consumer market is a pathetic 3.5%.. sources please….
Apple should billboard that, rather stuped, 10 points FAQ switch-list instead of the now well placed iPod ads ! After the X-mas shopping time…
Ads focusing on style and coolness will attract only
so many people. I have been disappointed that there
have not been enough Apple ads which have made a clear
case about the superior aspects of Macs and Mac OS X.
Why can’t some of the ads promote ease of use, more
efficient use, greater security for viruses and
spyware, lower overall costs for whatever reasons,
etc. Many people need to be educated about specific
use and financial reasons in order to convince them
to add or switch to a Mac. Soft ads are not enough.
Had a woman approach me at Starbucks on Saturday, I was working on my Al PowerBook, and asked me about my computer. She was looking to buy a computer for her daughter, who would be using it for photography and mainly artistic endeavors, but also wanted to use it for Excel spreadsheets and Microsoft Office software. I quickly opened up Excel and told her that was not a problem, she was amazed, and then I blew her mind when I told her I do not own any virus software, even though I have a .Mac account and I could get it for free. No spyware got her very excited about a Mac too and the fact that she could buy an iBook for the same price as a comparably featured Dell laptop. The Windows using public are not being sold the information they need to switch to Macs. APPLE NEEDS AN OSX AD CAMPAIGN! TIGER ANYONE!
I agree John. Apple appears to rely on style and as you say ‘soft ads’ rather than hard hitting promotion of why they are superior.
OS X is the best keep non-secret secret in the computing world.
Jay… I guess it is now part of our duty, if at all possible, to go out in the field with our iBooks, our Powerbooks… Go to the haunts of the people, especially where WiFi is free… Be seen, be cordial, and show what our Macs can do.
Jb
I’ve been complaining about the lack of OS X ads since Jaguar was released, but there really is something to be said about meeting demand with the G5s though. It stands to reason that most new mac users are going to want a new iMac since that’s what’s getting all the rave reviews right now, but if IBM can’t supply enough chips, advertising might well hurt apple instead of help.
I’m wondering if the computer industry has hit the ceiling that has been talked about for so long with regards to *hz speed. Intel has given up on making the Pentium at higher clock speeds, I haven’t heard anything about AMD making any strides with their chips, and we all know about the whole 3ghz G5 debacle. It seems like the next speed frontier is all about dual core chips. That may put all platforms on an even playing field.
Apple is having enough trouble meeting the demand for iMac’s right now, you have to remember, tons of companies make PC’s, but only a few make Mac’s.
So Apple has to control the demand, they are playing it smart and not burning our their brand name like Compaq and Gateway did.
This all came about when IBM opened it’s platform up to cloning and Apple didn’t. IBM clones drove for the extreme low end to gain market share and eliminated innovation.
Apple decided to stay out of the “low margin” and rely upon innovation.
Will Apple ever gain more market share than PC’s? most likely not, unless they can get the parts of high quality and low price.
Mac’s are appliance computers, once they get cheaper, they will rule the world for sure. It’s the parts are expensive, especially RAM.
So for a appliance computer concept to suceeed they have to stay out of the low end and make a profit.
I agree with No Crack…
Until IBM’s Fishkill ($4 Billion) Plant can turn out PPC 97X’s with optimal yields and high volume, Apple is going to keep a low key approach to marketing. They almost have no choice.
However, When that day comes or gets close, I would expect that you will see different, hard edged advertisements blasting Redmond and Dull for their lackluster products. (anyone remember the Burning Bunny-suit ads? Burn-baby-burn)
As much as I like the Mac, the truth is the market IS very small. Somewhere between 8-9 million pople use OS X worldwide and that is an Apple supplied figure (QuickTime Chief during a recent conference- video on Apple site). The 25 million figure includes OS9 and previous users- many of which have retired their Macs for PCs a long time ago.
Given IBM’s and FreeScale’s current capacity, one wonders how many Macs Apple could deliver if everyone walked in and wanted to buy a Mac. The Mac market is growing, but a slower rate than the worldwide PC market.
Pure Genius I tell you!
GrapeGraphics, lets do it, everyone,
IF YOU ARE ON AN IBOOK OR POWERBOOK WITH AIR PORT CARD, STOP DOING WHAT EVER YOU ARE DOING AND DO IT AT A PUBLIC WI FI NETWORK.
everyone try to swich a person by Jan 1.
” width=”19″ height=”19″ alt=”wink” style=”border:0;” />
don’t forget your ipods
>’Computers are a big, diverse market, with consumer, corporate (and) education categories,’ he says. ‘You don’t need a lot of market share to be a big and profitable business,'” Graham reports.
This is key. In the end, investors care about profits and Apple is a profitable company. Does it make as much as Dell? No. But I would argue that Apple and Dell have completely different goals, so there isn’t much to be gained by comparing them. Both are successful at what they do, but they define success differently.
I think (certainly hope) there may well be a run of teaser ads for both G5 iMacs and tiger in the run up to that OS release, especially with the potential to exploit the new technology it will introduce in marketing the package. By that time hopefully the production problems with IBM will be (mostly) resolved new G5s coming online and the iPod success there to be exploited in full. Probably better to hit hard then than to waste powder now however frustrating that may seem.
GrapeGraphics,
Thats how I got switched. Works every time:)
I went into an apple store. Did I walk out with one? No, but I got one later when I could afford it. I switched because of an Apple store. To see one in person is very different than seeing it online.
The marketshare numbers are cooked…
PC sales will always grow geometrically — because people will continue to replace their old PCs infected with viruses with new PCs at faster and faster rates… not to mention that PC sales include things like cash registers — which will always grow, too, since new stores are always being built in this country.
How can Apple, which makes machines that last *at least* twice as long in usefulness compete against a PC market where people are buying new machines every year? We should have a new metric — one that measures sales but also lifespan — taking into account how long the previous model was in use (or the current one is projected to be in use). If you multiply Apple
s marketshare by 2 or 3, I think you have a more accurate sense of the market now.
I think looking at market share numbers is like looking at birthrates. Is Sri Lanka really that much more successful a country than, say, Japan?
Heroin wrote:
> PC sales will always grow geometrically — because people will continue to
> replace their old PCs infected with viruses with new PCs at faster and faster rates.”
>How can Apple, which makes machines that last *at least* twice as long in
> usefulness compete against a PC market where people are buying new machines
> every year?
Look at the US auto industry. In the early 80’s the Big Three solidly dominated the market with COMPLETE JUNK. Less and less reliable, shorter and shorter life spans. People had enough, the competitors (esp. Japanese) got wise, and today GM enjoys less market share than Chevrolet alone once had.
Now, to their credit, the Big Three are building far better than in the bad old days, but it’s too late. Public opinion has been changed and many customers have been permanently lost. The entire PC-clone industry would do well to study this page of history.
mac
One day the stores of Apple will be their greatest asset.
In a few years they will be able to launch products like no other computer maker.