Apple retail stores ushered in the post-commodity era

“Yesterday, May 19, marked the 15th anniversary of the first Apple retail stores, opened in Virginia and California,” Mark Hibben writes for Seeking Alpha. “At the time, as is so often the case with an Apple initiative, the stores were pre-declared to be a failure.”

“What the pundits didn’t get about the stores is what they still don’t get about Apple,” Hibben writes. “The tide of commodity PC hardware that was supposed to engulf Apple is now receding in a multi-year decline. We live in a post-commodity era, in which quality and value, rather than mere low cost, are the deciding factors for most consumers.”

“As the wealth and disposable income of consumers increased in the late 20th century, they became more discriminating. Middle class consumers especially were no longer content with the lowest cost options for many of the goods they purchased,” Hibben writes. “This can be seen in automobiles, the quality of which improved tremendously in the late 20th and early 21st centuries. If you look at cars built in the early 70s, compared to today, the build quality and reliability are deplorable. Cars today are also more expensive, in real terms, but arguably a better value. The reason that higher quality, yet more expensive cars have become the norm is because that’s what won in the marketplace.

Hibben write, “Apple’s bet on its stores was essentially a bet that the same process was occurring in personal computers and electronics.”

Read more in the full article here.

MacDailyNews Take: People en masse finally recognized that ROI trumps sticker price. (Mac users knew that fact all along.)

It’s time again, of course, for one of our all-time favs:

I give [Apple] two years before they’re turning out the lights on a very painful and expensive mistake.David Goldstein, Channel Marketing Corp. President, commenting on Apple’s opening of retail stores, May 21, 2001

How the Apple Retail Store took over the world – July 22, 2015
Overall sales at shopping malls with an Apple Store are 10% higher – March 11, 2015
Apple Stores dominate retail with double the sales per sq. ft. of nearest rival, Tiffany & Co. – November 13, 2012
Why authorities waive rents and taxes to land Apple Retail Stores – May 20, 2012


  1. On the contrary, we seem to be entering a total commodity era. As the latest Apple devices lack the features and performance found in competitors’ models, Apple’s devices become simple commodities.

    1. Goldstein had little to be ashamed of, any more than did the rest of the market analysts, for applying conventional wisdom. At the time, other PC makers like Gateway were shuttering their stores, and no one ever really believed that Apple was shrewd or inventive enough to breathe life into a failed retail model. But conventional wisdom is not wisdom if it does not learn and change. The Apple doom narrative is a dog-eared, discredited belief that, sadly, persists like a suppurating lesion on a shambling beggar who has no escape from his lot in life.

      1. The built some good laptops. My Gateway laptop is still running strong with original equipment.. Been over 13 years since I bought it with WinXP. 😀

    1. Not “sold off” my friend he said “shut it down and give the money back to the shareholders” – how about it MDN one more time for old times sake…

  2. Nice article but I don’t think they understand the Apple Store concept at all. First, Steve simply wanted a place where Apple’s products were up front, not hidden behind shelves and shelves of pc’s. Second, he wanted people familiar with Apple products to work the stores, not someone who never touched a Mac before as was common before the first Apple Store. There were other things. The Apple stores were and still are a kind of perpetual Macworld expo showing APple’s newest and best. They sold Apple products at SRP to protect Apple’s margins. The Genius Bar and the Apple theater (stores came with theatre seats and performance spaces) gave each store a mission to educate, something the stores do not do as well today.

    The Apple stores were in their own way as revolutionary as, if not more, than their other breakthrough products, the Mac, the iPod, the iPhone, the iPad and the laser printer. The stores just showed how different and better Apple products were, and still are.

    1. “The stores just showed how different and better Apple products were, and still are.” I would agree with that statement with the Apple stores were in their early days. I would go into on and see the new and revolutionary products AND the vast majority of the employees were old Apple fans who had been using Apple products for many years — many even through the Dark Days.

      I cannot agree with that statement as it applies to today, specifically the “and still are” part. Today, there are virtually no world changing products to show AND the vast majority of Apple store employees know **SIGNIFICANTLY** less about Apple’s products than I do!

      The Apple stores are flashier and more stylized than they were a half a decade ago, and the products shown there are less noteworthy than they were then too.

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