Apple plots new strategy to target small businesses through retail stores

Posted:
in General Discussion edited January 2014
Apple has begun to focus on small, local businesses as part of a newly evolved strategy that aims to expand the company's sales past the consumer market.



The company is currently looking to hire engineers in a handful of retail stores in the U.S., and those employees would specialize in assembling Mac-based computer systems for small businesses. People familiar with the company's strategy told The Wall Street Journal that the hires are part of a greater focus on small business clients.



Apple is said to have at least one salesperson dedicated to managing accounts with local businesses, and has also recently begun recruiting within its sales staff to create a team that negotiates leasing and pricing terms for business clients. People familiar with the company's plans said the strategy has proven successful, as some stores have seen their revenue more than double after implementing the program.



The company has also begun an incentive program that will assign business-centered sales staff based on revenue targets for each store. And some of Apple's newer retail locations include specialized conference rooms, designed specifically for meetings between the sales staff and business executives.



The company's new focus is meant to take Apple beyond its market of consumers and niche businesses, like design and media firms, the Journal said. Apple hopes to leverage the popularity of the iPhone and iPad, both of which have found broad adoption in the enterprise market. The company hopes that familiarity with those products will lead businesses to pursue Apple's Mac computers and servers.



"Apple has had mixed results trying to crack the business market in the past. Its computers are generally more expensive than comparable PCs, prompting cost-conscious companies to look for cheaper alternatives," the report said. "Apple's retail staff historically hasn't provided the hand-holding and on-site support that many businesses expect. Instead, it has cultivated a network of authorized consultants, many of whose customers are referrals from Apple's retail employees."



The new strategy could prove lucrative: The Journal noted that North American businesses with less than 1,000 employees are expected to spend $310.8 billion on information technology this year, according to Gartner. That number is expected to increase by 6 percent, to $328.3 billion, in 2011.



During Apple's quarterly earnings conference call on Tuesday, Chief Operating Officer Tim Cook revealed that more than 80 percent of the Fortune 100 are deploying or piloting the iPhone, while more than 50 percent are using or testing the iPad. Mac hardware, however, has not yet seen as great of an embrace from the enterprise market.



"In terms of the Macintosh, you can see the Mac had an incredible quarter," Cook said, referring to record sales of 3.47 million Macs. "We're still selling principally to consumer and education, but we are seeing businesses with increasing interest in the Mac. It's more difficult to measure because many of those sales are filled through the channel. But we're obviously thrilled with growing 33 percent year on year."
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Comments

  • Reply 1 of 75
    solipsismsolipsism Posts: 25,726member
    There is so much ground they can tackle, even on this front. I still wish they would have bought Sun and made a version of Mac OS X that was specifically for business machines in a casing that resembled, more or less, NeXT and Sparc Workstations to clearly differentiate them from the Mac line.
  • Reply 2 of 75
    mstonemstone Posts: 11,510member
    Quote:
    Originally Posted by AppleInsider View Post


    During Apple's quarterly earnings conference call on Tuesay,





    Good article, one typo, should be "Tuesday".
  • Reply 3 of 75
    quinneyquinney Posts: 2,528member
    They are going to sell a lot of minis and mini servers.
  • Reply 4 of 75
    charlitunacharlituna Posts: 7,217member
    Quote:
    Originally Posted by quinney View Post


    They are going to sell a lot of minis and mini servers.



    Plus everything else. Between internal needs and things like gifts, businesses can have cause to buy anything and everything Apple sells
  • Reply 5 of 75
    cgc0202cgc0202 Posts: 624member
    It is not just technology that is needed to be addressed. They also need people who understand the needs of specific sectors -- retail, service, health (this is a big area with various categories, e.g., hospitals, clinics, health care agencies, doctors, etc.), biotech, and many others. Each has specific business needs that must be addressed in a more holistic manner.



    I was talking to the business rep of Apple in the Bolyston Apple Store in Boston, and he was not really as well-versed with the "trends" in some of the healthcare categories. This is big in the metro Boston area.





    It is unlikely that Apple could really hire any signle or a few employees attached to an Apple Store to be an expert in all business sectors though. However, in each metro-area, there are small businesses that focus on Apple products (although not limited to Apple sometimes) that attempt to provide similar services to specific sectors in the metro area.



    I understand from previous reports that Apple has not been cultivating or strengthening its ties to these local resources. For example, when force to choose between Best Buy, Walmart and these small businesses (providing Apple-centric technical and business support to local businesses), Apple tended to favor the big retail outlets when it comes to the release of new products. This is misguided because it is these local Apple-centric technical and business support centers that truly knows the needs of the local target business sectors. It is these local support centers that the small business sectors are likely to turn to for advise.



    Thus, while Apple should indeed continue to develop its local Apple Store based group to address the needs of local businesses, it must strnegthen its ties with existing local Apple-centric technical and business support centers. The other advantage of this collaboration is that Apple need not have to establish a huge sales division to reach out to the specific needs within each metro area.



    CGC
  • Reply 6 of 75
    tundraboytundraboy Posts: 1,768member
    Just curious, is the whole suite of business software (with comparable functionality as their Windows counterparts) already available in OS-X? Doesn't have to be the direct OS-X port of the PC software, just something that offers the same functions. No, I don't know what makes up the 'whole suite' that's why I ask.



    I thought rather than cost, it's software availability that is holding back Macs for biz.
  • Reply 7 of 75
    razorpitrazorpit Posts: 1,796member
    This could be a BIG opportunity for Apple. Currently my local store is clueless when it comes to answering questions about OSX Server. While that might have been acceptable in the past in a retail environment, the new Mini Server pretty much requires you to have a few members of the staff on hand able to answer questions other than, "Can I sync my iPod/iPhone/iPad with this?"
  • Reply 8 of 75
    MacProMacPro Posts: 19,379member
    In many cases the PCs in business simply run Outlook Express and Internet Explorer (6) and they could easily be replaced. However, there are many PCs running XP and some specialized software, e.g. dental systems and the like. I wonder if Apple could come up with some super smart software that would allow a developer to recompile their code to run on a Mac (and perhaps even iPad) allowing say the dentist to convert painlessly (I am avoiding any jokes there lol) to an Apple hardware based solution and still run the same software (I specifically mean avoiding VMs).
  • Reply 9 of 75
    dr millmossdr millmoss Posts: 5,403member
    Apple has a big opportunity in small business. Typically small businesses don't have IT support on staff and when they are forced to contract outside IT support, it can be very expensive. The value of the Mac to small business is that most of the tech support can be done in-house by one fairly knowledgable person already working for that business. As part of their outreach to small business, Apple should start programs to train up a part-time support person.
  • Reply 10 of 75
    daharderdaharder Posts: 1,580member
    I can see them making small gains in the server business, but the reality is that current Macs can't seem to compete with PC's on pricing and MS Office integration, which happens to be the industry standard for office application suites.



    If a small business can equip their office with 4 reliable PCs running Win7/MS Office2010, along with a suitably powerful server for less than US 2500.00, why would they spend considerably more just to have Apple wares?



    It's probably going to be a tough sell...
  • Reply 11 of 75
    cgc0202cgc0202 Posts: 624member
    Quote:
    Originally Posted by tundraboy View Post


    Just curious, is the whole suite of business software (with comparable functionality as their Windows counterparts) already available in OS-X? Doesn't have to be the direct OS-X port of the PC software, just something that offers the same functions. No, I don't know what makes up the 'whole suite' that's why I ask.



    I thought rather than cost, it's software availability that is holding back Macs for biz.



    From what I can discern, various developers (both big and small are addressing the issue differently from the Microsoft approach. Developers are creating specific business suite tailored to each business sector. [Some big companies are doing it on their own to address their specific needs.]



    What Apple should do is to have a more business-centric resource center for Apps, separate from the generic Apps Store. This will serve as Apps database if the categories are fine tuned into more distinct categories and subcategories, not simply generic categories -- technology, health, education, etc. as they appear now in the Apps Store.



    How does this help? I may know what I need for my business but I may not be as knowledgeable as to what sort of Apps are already out there. And if there are several choices, which would be best sutied for my needs.



    Maybe Apple (or specific local Apple-centric service companies) could even have recommended starter business suite kits depending on the specific business sector. I would prefer this over the generic kits that meant to cover all sorts of businesses.



    CGC
  • Reply 12 of 75
    Another half-hearted attempt by Apple to woo small business that will be underfunded and disappear in six months when it doesn't pan out according to their timetable.



    Combined with their lack of dedication and their inexplicable gift of somehow finding people with zero charisma at the retail level at this task, I'm not holding my breath.
  • Reply 13 of 75
    joe hsjoe hs Posts: 488member
    Quote:
    Originally Posted by Dr Millmoss View Post


    Apple has a big opportunity in small business. Typically small businesses don't have IT support on staff and when they are forced to contract outside IT support, it can be very expensive. The value of the Mac to small business is that most of the tech support can be done in-house by one fairly knowledgable person already working for that business. As part of their outreach to small business, Apple should start programs to train up a part-time support person.



    I second that. My school could have done with switching to macs and using OS X server
  • Reply 14 of 75
    dr millmossdr millmoss Posts: 5,403member
    Quote:
    Originally Posted by NomadMac View Post


    Another half-hearted attempt by Apple to woo small business that will be underfunded and disappear in six months when it doesn't pan out according to their timetable.



    Combined with their lack of dedication and their inexplicable gift of somehow finding people with zero charisma at the retail level at this task, I'm not holding my breath.



    True, which is why I'll believe it when I see it.
  • Reply 15 of 75
    bageljoeybageljoey Posts: 1,937member
    Quote:
    Originally Posted by tundraboy View Post


    Just curious, is the whole suite of business software (with comparable functionality as their Windows counterparts) already available in OS-X? Doesn't have to be the direct OS-X port of the PC software, just something that offers the same functions. No, I don't know what makes up the 'whole suite' that's why I ask.



    I thought rather than cost, it's software availability that is holding back Macs for biz.



    Good question. I notices 2 of the last three medical offices I visited were running Macs. At the oral surgeon, I started up a conversation with a secretary who said they had switched over all their record keeping and scheduling to Macs (using OSX) but that they kept one Dell for billing because there was no available software (or software that didn't involve changing everything).

    The final word was that everyone was happy with the switch!



    There is serious money to be made here...
  • Reply 16 of 75
    kibitzerkibitzer Posts: 1,114member
    Yesterday I saw my doctor for a routine checkup. For several years he and his partner have been using Panasonic touchscreen laptops tied into the local hospital network for patient records. He hadn't had time to check out iPads and was fascinated by the one I brought with me. It took him all of 30 seconds to realize that he and his fellow physicians probably will be migrating to iPads within the next year or two.
  • Reply 17 of 75
    kibitzerkibitzer Posts: 1,114member
    Quote:
    Originally Posted by NomadMac View Post


    Another half-hearted attempt by Apple to woo small business that will be underfunded and disappear in six months when it doesn't pan out according to their timetable.



    Combined with their lack of dedication and their inexplicable gift of somehow finding people with zero charisma at the retail level at this task, I'm not holding my breath.



    A classic case of looking through the wrong end of the telescope. You have no idea about the growing number of small business people out there - doctors, consultants, real estate agents - who are realizing that there are a universe of apps out there to help them become more productive and profitable, and that it comes with a hardware and software ecosystem that they can use with minimal support, crashes and other traditional afflictions. This is a sales process that will be customer-driven. Providing engineering and installation support at the retail level supplies the missing link for local businesses. Compare it to the effectiveness that Best Buy has achieved with Geek Squad in home entertainment system installation. Haven't heard anybody extolling the sterling charisma among Geek Squad staffers. In fact, Best Buy gains a marketing bonus with its tongue-in-cheek deprecating name for the service.
  • Reply 18 of 75
    cvaldes1831cvaldes1831 Posts: 1,832member
    Quote:
    Originally Posted by tundraboy View Post


    Just curious, is the whole suite of business software (with comparable functionality as their Windows counterparts) already available in OS-X? Doesn't have to be the direct OS-X port of the PC software, just something that offers the same functions. No, I don't know what makes up the 'whole suite' that's why I ask.



    I thought rather than cost, it's software availability that is holding back Macs for biz.



    There is no official definition of this "whole suite of business software" that you mention. However, most people accept Microsoft Office as the de facto standard for a desktop productivity suite. There is indeed a Mac version of Microsoft Office, Apple's own iWork (word processor, spreadsheet, and presentation applications), and other options like NeoOffice or OpenOffice (both freeware).



    Snow Leopard Server has a lot of small business server functionality: address book server, calendar server, mail server, web server (basically like Microsoft Exchange), instant message serving, as well as tools for creating podcasts and wikis. Basic server functionality like web site hosting, file sharing, and printer serving are all there too. Naturally, you can use all, some or none of these features.



    There are many industry specific applications these days for OS X as well as general purpose business software (like QuickBooks), and with the Mac's ability to run Windows via Parallels, etc., the barriers to using Mac in a small office environment are falling.



    As noted by others above, many smaller businesses like medical groups, real estate offices, etc. are moving to the Mac platform.
  • Reply 19 of 75
    mstonemstone Posts: 11,510member
    Apple has made it easy to manage an OS-X server with the interface tools but it is still pretty complex, especially for a regular non-IT person. Setting up VPN, iCal and mail on an in-house server is beyond what you would expect an average office manager to do, but those are the sorts of tasks commonly needed by small businesses.



    I think there is still a need for outside IT consultants in most instances, however, this move by Apple could potentially cut into their margin a bit by selling the hardware directly to the small business. Of course there has never been much profit margin in reselling Apple hardware to begin with. I suppose the new strategy might bring some added awareness that Apple is an an alternative for certain types of businesses, at least the ones that don't have to be word for word compatible with Windows.
  • Reply 20 of 75
    Small business is probably the only place they can start. Kind of like getting in on the ground floor strategy. However Apple faces a huge uphill battle as opposed to the consumer market.



    The economic landscape is terrible and getting worse. Next year on Jan 1 the Bush tax cuts end. Taxes are going to increase across the board and consumers and businesses are going to cut back on spending and hiring. Double-dip recession here we come.



    Also it is one thing to have employees use iPhones/iPads that sync fine on Windows machines. It is something entirely different to change workstation PCs and servers over to Mac. Especially for a large firm highly entrenched in Windows machines. When you consider it takes some companies five years or more just to change OS versions it will dawn on you that these companies are not going to change to Mac overnight simply because they have a few iPhones/iPads. Also support for Windows is much greater than support for Mac unless Apple plans to give each small business (and large) a specific client liaison to help with tech problems. Apple has the money but are they willing to do what it takes to make businesses feel very secure in moving from Windows to a Mac way of life.



    Now small businesses is where they can get some traction. A small firm with few employees can probably change over much faster and easier than say a Fortune 100 company. Problem is again this economy. Small businesses are dying and large mismanaged companies that have been around for decades are also going the way of the Dodo. The remaining large companies are going to want to keep costs down, lay off more, and change full time employees to part time all in order to save on expenses.



    Apple has a very very long sell and they won't see adoption rates anywhere near what they have seen with the iPhone/iPad. They are just two totally different beasts.
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