“I was saddened by the timeline announced for shutting down CompUSA, but wasn’t in the least surprised,” John Dvorak writes for MarketWatch.
“As I have said in columns here and elsewhere, the idea of a computer megastore working is sketchy. Investors in Apple Inc. should pay attention,” Dvorak writes.
MacDailyNews Take: Thanks, but we’ll pass on advice from the world’s preeminent bloated gas bag who once stated, “The Macintosh uses an experimental pointing device called a mouse. There is no evidence that people want to use these things.”
Regardless of the complete uselessness of his advice and his total lack of integrity, Mr. “I Bait Mac Users For Hits” plods on with, “I have been to CompUSA dozens of times and rarely found what I needed. The store cannot carry enough weird cables or esoteric tanks of printer ink; no one can.”
MacDailyNews Take: Apple obviously can, you oaf.
Dvorak continues, “Competing with the Internet. Most savvy computer users shop for much of their hardware online. The Net works like a mall in a way that makes it hard to compete. Say you have some random item you need to find. A search engine will locate the one merchant that has it.”
MacDailyNews Take: Yes, John, and for Apple, 9 times out of 10, that would be Apple Store Online. How will Apple ever manage to compete?
Dvorak’s not done yet, “My concern is that the Apple stores are getting too big… It began these high-end stores with the spectacular glass-cube place in New York — an architectural delight on very expensive 5th Avenue real estate — and now has fancy new digs in the meatpacking district, incorporating a stunning, three-story glass staircase. While things are all working out for Apple during the iPod era, if there is any sort of slump the company will have to deal with what could be a herd of white elephants. It’s something investors need to monitor.”
Full article, Think Before You Click™, here.
[Thanks to MacDailyNews Readers too numerous to mention for the heads up.]
Surely Apple investors are hanging upon John Dvorak’s every utterance. After all, this is the man who said in 1998, “Folks, the Mac platform is through – totally,” which, of course, means that AAPL has only multiplied about 25 times since John delivered his sage advice. Yes, Apple investors, especially those who listened to him in 1998, simply must love John Dvorak. More recently, the Round Mound of Unsound advised Apple to “Pull the plug on iPhone.” More great advice, John.
Newsflash: Apple knows what they’re doing and John C. Dvorak, as usual, knows nothing about Apple.
A few flagship stores in large cities is hardly “getting too big” and Apple’s retail store network is nothing at all like CompUSA’s was. Was. Apple’s stores generate over four times the sales per square foot of Best Buy, over seven times those of Neiman Marcus, and 66% more than Tiffany’s! CompUSA stores are currently generating liquidation sales; probably their best sales in years.
If John Dvorak is as astute as he claims to be, he would be writing about the gutting of the retail market. NPR even did the initial leg work and got the ball rolling.
Last summer NPR carried a story examining how Walmart’s “ultra-low profit margin strategy” was effecting other retailers. A traditional retail store uses a strategies that rely on profit high margin at the introduction of a new model to make up for smaller profits in the middle and end of a model cycle. Walmart does not adhere to that strategy, they are large enough to sacrifice profits at the start of a new model cycle if it allows them to dominate that market. For example, if they can take a loss and kill off a competitor by doing so, they will! Remind you of Microsoft?
How does this effect CompUSA and Apple? CompUSA relied on those “front-end” profits from high-end entertainment systems to stay profitable. Last year at Christmas, Walmart undercut them and others by sacrificing their initial profits on new 42″ high-definition televisions. (Remember how quickly the price dropped on those new models? Remember how your local volume electronic retail went out of business?)
Apple on the other hand has not competed on price alone for over a decade. Apple has not commoditized their products. Apple is very select in what they produce and what they sell in their retail stores. Apple is profitable.
Currently, no one can compete with Walmart on price! (It will be interesting to see if Walmart can survive their own success, given that it has been at the price of gutting our low cost manufacturing sector.)
Our little corner of the economy does not drive the larger and longer established sectors of the economy like retail. Retail drives us. Adapting to economic and market realities or the retail market has served Apple well. Not adapting sunk CompUSA. If John Dvorak can make a living distributing his distorted world view regarding the tech sector, it says more about his inconsequentialness that anything else.