Apple morphs into a Consumer Electronics Co


I’ve been meaning to put a post up on this subject for a while — the excellent research firm Faultline has been all over this.

He who hesitates is lost — the NYT beat me to it with a terrific piece on Apple in the biz section of the Sunday NYTimes:

“Since returning seven years ago to Apple, the computer maker he helped to establish in 1976, Mr. Jobs has created a fusion of fashion, brand, industrial design and computing. He has opened a chain of 78 retail stores to showcase Apple’s consumer-oriented designs and to surround the company’s computers with an array of digital consumer products. The stores themselves have become another billion-dollar business, a feat all the more impressive considering that one of Apple’s chief competitors, Gateway, failed with a similar retail strategy during the same period.

As a result, Apple is acting less like a computer company and more like brand-brandishing, multinational companies such as Nike and Virgin. The iPod’s success is also the clearest indication that Mr. Jobs, if he is to successfully revamp Apple, will ultimately win not by taking on PC rivals directly, but by changing the rules of the game.

The Apple that is starting to emerge may be a harbinger. The company’s growth may no longer be defined by its PC market share, now a declining sliver of the PC industry, but instead by Mr. Jobs’s ability to create consumer markets.”

That’s a huge shift in their model. The PC industry has been cutthroat, with Dell the only OEM winner on the Windows side of things.

Apple has further refined their niche — a BMW like 5% of the PC marketplace — but they did it by owning their machines operating system and software development. This has allowed Apple to carve out a unique, branded and highly profitable busines — right at the convergence of PCs and home entertainment:

jobsgraph“So will Apple eventually be overwhelmed by its bigger, better-heeled competitors? Throughout the technology world, there seems to be a simple, uniform answer to that question: Never underestimate Steve Jobs.

With roots both in Silicon Valley’s digital culture and the 1960’s counterculture, Mr. Jobs has long been an arbiter of what is cool in technology, much like a real-world version of a trend-spotting character from “Pattern Recognition,” one of the cyberpunk novels by William Gibson.

AND, helped by his growing prominence in Hollywood through his second company, Pixar Animation Studios, Mr. Jobs has attained a level of influence over how life is lived in the digital age that is unmatched by even his most powerful computer industry rivals. “He is the Henry J. Kaiser or Walt Disney of this era,” said Kevin Starr, a culture historian and the California state librarian.”

Now that the mainstream press has caught on, let’s see how this developes . . .

Oh, Yeah, He Also Sells Computers
New York Times, April 25, 2004

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  1. Mememomi commented on Sep 7

    Brand Apple

    Apple as consumer electronics merchant

  2. Mememomi commented on Sep 7

    Brand Apple

    Apple as consumer electronics merchant

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