Did Apple (AAPL) lose a big retail opportunity?

Posted Sep 17th 2007 10:23AM by Douglas McIntyre
Filed under: Consumer Experience, Competitive Strategy, Microsoft (MSFT), Apple Inc (AAPL), Dell (DELL), Hewlett-Packard (HPQ)

Was Apple (NASDAQ: AAPL) wrong not to offer its Mac across a broad range of retailers? Instead, the consumer electronics company has elected to sell the machine online and at its few Apple retail outlets.

In the meantime, market leader Hewlett-Packard (NYSE: HPQ) has long sold its PCs at retailers and Dell (NASDAQ: DELL) has made deals with companies like Wal-Mart (NYSE: WMT) an integral part of its turnaround.

The New York Times argues that Apple missed an opportunity. When Microsoft (NASDAQ: MSFT) Vista stumbled after its introduction due to bugs and reluctance of users to upgrade, Jobs & Co. should have sought the widest possible retail distribution for the Mac.

According to Roger L. Kay, president of Endpoint Technologies Associates, the Mac's worldwide market share was 3% as of June 2007. The Times also says that "based on the ratio of Windows and Macs actually in use, no gains can be seen for Apple." While Apple and some industry experts might dispute those figures, the Mac was not widely available at large numbers of retail locations.

Did Apple do the right thing? It might argue that part of its brand is the environment where it is sold. The company has complete control of how the machine is presented on its website. Employees at the ultra-clean Apple stores are experts on the Mac in a way that other retailers would find impossible to match. Apple may have been protecting the Mac brand by keeping it in the best hands.

What is true is that Apple still has only a small share of the market. Only so many people can get to an Apple store and not everyone will buy a computer online. So the company is fighting with one hand tied behind its back.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Tags: aapl, apple, inthenews, mac, macintosh, microsoft, msft, vista

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Reader Comments (Page 1 of 1)

9-17-2007 @ 10:53AM

PB said...

Apple's market share is improving. In addition, by the end of 2007, Apple is opening oer 300 additional stores within Best Buy stores. EU verdict also creates additional market share for Apple.

9-17-2007 @ 11:52AM

Scott said...

Apple is doing just fine... Theres enough garbage machines out there. And as far as buying online. I got the new imac bout a week after it was released. Im very happy with it and I would recommend buying online. I would never buy a machine from walmart or best buy or any of these large retailers because the service is horrendous. Nevermind their policies.

9-17-2007 @ 1:16PM

Jesse said...

Someone recently made the comment (it was either Fake Steve Jobs or John Gruber, but I can't find the quote) that this NYT article is assuming there was some small window in which Apple stood to gain market share which they have now missed. Why? Because Vista is set to take off in the near future?

Most likely, Vista adoption will be slow and steady as people buy new computers. During these next few years, Apple will have constant opportunities to gain new users as those users buy new computers (mostly laptops, where Apple's market share is growing tremendously). I don't understand why the NYT author thinks the moment has passed.

9-17-2007 @ 12:58PM

tom b said...

The Macs would just sit on a the shelves of a big box store, devaluating, because nobody on staff would have any clue about how to sell Macs. They don't comprehend PC's any better, but they THINK they do.

9-17-2007 @ 9:31PM

taojones said...

apple tried that and pc makers offering insentives to push machines that were inferior left the macs gathering dust with no balls in the mice the stores are what has turned apple around keep going apple !