Should the Apple Store be forced to sell lemons?
Apple has spent extraordinary amounts of money building strategic placed Apple Stores around the world. Who should benefit most from Apple's work: Microsoft, Google or maybe Sony?
University Village Apple Store, Seattle
Given Apple's success in building retail stores that customers love and which have contributed significantly to its own efforts to initially launch new Macs and iPods, then to debut the new iPhone and iPad, and now show off the upcoming Vision Pro, is it now time for the world's governments to seize control of these outlets and force Apple to work just as hard selling the products of its competitors?
Rise of the Apple Store
The initial work of launching its own Apple Stores was initiated in 1997 by Steve Jobs as one of the first problems that needed to be fixed at the then-struggling Apple Computer. Macs were at the time sitting disheveled in department stores or in a corner "store within a store" inside CompUSA discounters.
After hiring an experienced retailer, Apple Retail set to work to create and built its own idea of how to introduce new products to customers, how to support them with a friendly help desk, and how to create shelves of enticing products that would make buyers feel comfortable about dropping serious coin on premium technology products.
Steve Jobs opens the first Apple Store in 2001
Starting in 2001, Apple began opening new retail stores across the United States just in time to have an inviting place to demonstrate its brand new Mac OS X and the new iPod. It also provided a way for Apple to help create a retail platform to show off software and accessories built by third parties.
They scoff... then they copy
Apple Stores were initially scoffed at by so-called experts. Many technology companies had already made efforts to do something similar and had largely failed. Cow themed PC maker Gateway 2000 had just built out hundreds of stores only to find itself in big trouble ahead of its precipitous decline.
Sony, which in 1999 was living the dream as the Apple of its day, had embarked on a concept of building "urban entertainment centers," notably including San Francisco's Metreon, as well as retail flagships in Tokyo and in Berlin's glitzy new Potsdamer Platz project.
One of the San Francisco Metreon's key tenants beyond Sony itself was Microsoft, hoping to excite technology enthusiasts with its Windows PCs and the ill fated WebTV Network for browsing on your television. Microsoft gave up and shuttered that early experiment in retail by 2001.
Microsoft first retail store had a shorter lifespan than Zune
Given those retail flops, it's not surprising that consultant David Goldstein of Channel Marketing Corp said of Apple's retail plans at the time, "It makes absolutely no sense whatsoever for them to open retail stores."
Goldstein claimed Apple's retail strategy wasn't going to work because consumers "haven't indicated that they're having trouble finding outlets that sell Macs," adding, "It's another case of Apple being Jobs driven and not consumer driven."
Yet while Sony and Microsoft both failed at selling their technology at Metreon, just a couple blocks away Apple opened its own flagship retail store in the same neighborhood to markedly different results. By 2007, Sony and Microsoft were gone but Apple had customers lined up around the block waiting to buy the new iPhone.
Year after year, I remained one of them!
The only reason Apple isn't still there is because it built a larger, fancier flagship a few blocks away at Union Square. Once Apple had built a series of globe-encircling its retail stores to roaring success, many of its competitors again tried to start over and copy its winning strategy.
Apple didn't abandon retail, it built a larger store
The Microsoft world's Apple Stores
At its headquarters in Redmond, Washington, Microsoft initially tried to come up with its own original ideas to help the public buy its products at retail. At first it imagined that would "deliver targeted, real-time information to a shopping cart or a consumer's mobile phone to help impact buying decisions," some truly dystopian horror that it couldn't ultimately deliver, thankfully.
Microsoft began renewed efforts in retail 2009
But ongoing Apple's success in retail forced Microsoft to instead initiate a very expensive effort to build its own new network of retail stores that appeared to be straight up copies of Apple's work. That should surprise no one. Yet despite being almost confusingly similar in visual design and layout, Microsoft found itself unable to maintain its consistently unprofitable, often largely empty retail stores.
Microsoft Stores were often built near a strategically functional Apple Store. They were hailed as a way for the Windows company to launch its own new hardware efforts, including Windows Phones, Surface PCs and tablets, Band watches and other gear. Yet these fancy retail outlets repeatedly failed to prevent Microsoft from blundering through a series of embarrassing flops.
Microsoft's shameless copying still couldn't duplicate Apple
In 2020, Microsoft used Covid-19 as an excuse to shutter its global retail store efforts. Retailing was too difficult and too expensive to figure out, even when apparently lifting all the answers from Apple's work. The strategy that had seemly worked for Windows 95 wasn't working this time around.
Making an expensive copy of Apple Stores was as difficult and as unsuccessful as Microsoft's efforts to make expensive copies of Macs, iPods, iPhones, iPads, and the other gear Apple had no problem creating and selling. The real problem must have been Microsoft's corporate culture, which also led it to shamelessly copy other's work in the first place.
The Google world's Apple Stores
Microsoft wasn't the only company to dabble at ineffectually copying Apple's retail efforts. Rather than working to fully duplicate Apple's long term, strategic retail efforts and build out actual retail stores with lavish details in prime locations just like Apple, Google did what Google could be expected to do.
Google half-assedly rolled out some "store within a store" outlets in 2015 in the model of Apple's own limited-benefit, limited rewards efforts of the late '90s. It then made low cost efforts to open mall kiosks with the hope that these cheap outlets would help it launch Nexus phones, Chromecast dongles, Daydream and Cardboard VR headsets, Pixelbooks, Stadia gaming, Duo, Nest, Fitbit and other billion dollar brands with shorter lifespan than a Nexus 5 Replicant from Bladerunner.
Google Shop let people try on a Daydream to see how bad VR could be
Google's efforts at rolling out some popup retail spots, along with retail shops in a few of its office locations, have been copied by other Android makers with a similar degree of success. Traveling in China, I was overwhelmed by how many phone-related shops there are in the area where Apple's hardware partners build lots of its products. Many were glitzy and large, but virtually all of them seemed to be mostly empty all of the time.
In the United States and throughout Europe, there are also lots of mall stores and even some dedicated shops operated by Samsung, Huawei and other Android licensees, as well as the throngs of mobile carriers selling every product they carry. Yet none of these companies are making significant money from their sales of high end smartphones, and few are selling any large number of tablets or computers or any of the other things Apple is selling in volume at retail. The majority of the products they do sell are not really being sold through retail outlets.
Do the world's governments need to stop this imbalance of retail power?
Should the U.S. Congress, the EU, and perhaps the PRC all jump in an enact legislation that forces the Apple Store to devote its store shelves equal space to Microsoft, Google, perhaps Sony and all the other makers and marketers who couldn't figure out how to do their own retail sales?
Should Apple be forced to sell Surface and Chromebooks and Sony VAIOs next to its own Macs, perhaps with rules that Apple's sales staff give unbiased recommendations based on guidelines drafted by Microsoft and Google and Sony?
Before you buy an iPhone, should you have to read through a booklet created by the Android Alliance explaining how an Android phone might be right for you, and look its way cheaper, and malware doesn't really exist, and you have customization options. And messaging is a bit of a mess but we're also working on forcing Apple to fix that for us as well.
According to the Green Bubbles replacement theory, as extolled by Android Enthusiasts, Apple's Messages server infrastructure must be forced to accommodate equal access, specifically in the color Apple Blue, to infected and insecure Android devices and to enable unencrypted communications with them. And deliver other features of Messages to Android, at Apple's expense, because Google's messaging system doesn't work well and Android users don't like to pay for things.
It all makes as much sense as if your neighbor builds themselves an addition to their home, but you can't afford to and don't know how to. The solution, obviously, would be for the government to force your neighbor to build you one, probably for free because you don't want to pay for it.
Who even owns the App Store?
Happy holidays for 2023
I'm allowing myself to be facetious here because it's the festive winter season. I'm also already a couple days late in publishing my weekly column for AppleInsider. I've been aiming for Monday, but I'm on a trip halfway around the world and got busy over the weekend and, well, it's looking like Wednesday will be the solution for this week and next, so enjoy your holidays, friends!
It's been a lot harder to meet New York City's east coast publishing deadlines from here in Seattle than it is from hours earlier in Berlin. Next week I'll be in Bangkok, so I'm not sure if I'll be more behind or even more ahead. I honestly also don't have a full plan of what I'll be doing there. I tend to figure things out by the seat of my pants. There are Apple Stores to visit, but I hear a lot else to do as well.
And of course, this article wasn't about the Apple Store at all. It was a minor aside about how bad world governments are at making commercial decisions that don't involve things like health care, defense, and transportation.
Remember when Congress tried to solve email spam but it turned out they had industry lobbyists just draft them a bill of rights for spammers instead? Or when the EU decided to fix web cookie privacy issues by making browsing the web a dystopian nightmare?
And if you haven't already gathered, what this article was really was about, of course, was the App Store, which I'll dive more directly in an upcoming article.
Read on AppleInsider
Comments
I have yet to see a cogent explanation of what sort of monopoly(yes) Apple enjoys. The most frequent target is the App Store. But just because it's the sole means by which Apple allows apps to be bought and distributed to iPhones doesn't make it monopoly. It's simply how Apple chose to design app distribution. for iPhones - and that's clearly a private company's prerogative. This design worked well for both developers (they had a much cheaper way of distributing software than the traditional store model) and customers (they had a convenient AND trusted source from which to buy applications) - so iPhone sales soared. But now, developers of the most successful applications balk at the 15-30% fee they have to pay to Apple - and claim that without the government's help in breaking Apple's "monopoly", customers are paying too much for apps. Never mind that customers never complained. The only ones who really have a beef with Apple's model are the corporate/successful app developer and wanna-be-Apple customers who are really jealous of the integrated Apple ecosystem but are philosophically or financially opposed to Apple's closed garden.
Even if the App Store were a monopoly, monopolies aren't even illegal! They only become illegal if the owner of it abuses that monopoly. AT&T had that issue: it had a natural monopoly on the wires going into people's houses (google how towns looked likewhen every company tried to string their own wires). It artificially kept phone service high because it didn't have competition. So it was eventually broken up by the government. Back to the App Store: sure, developers who want to sell to Apple iPhone customers need to go through its App Store. But there's no proof Apple has ever abused its 'monopoly' - fees have never gone up, only down, over the years. And, of course, unlike with telephone wires, there are literally dozens of choices consumers can make, if they don't like the cost of Apple apps. Most don't take advantage of this choice because they think apps aren't more expensive on the Apple App Store and, even if they were, it would be worth it because they enjoy higher levels of security and convenience in the overall Apple ecosystem.
Every Monday? I must have been missing your articles as hadn’t seen one of this quality for quite a while..
Much prefer the honest opinions of DED over the articles that are clearly just catering to the anti-Apple crowd that insist on habitually frequenting Apple centric websites and forums.. Or worse, obviously written just to encourage arguments in the comments.
Poor third party support at the retail level was only reason Apple opened the Apple stores in the first place, and that is no different than creating the iPod, iPhone. iPad, iMessage, Apple Maps, Apple Watch, or the Apple Vision Pro, third party support was not coming to Apple platform unless Apple rolled up it's sleeves and helped themselves. (coincidentally this is no different than the current AAA game situation)
Apple is a global company. Understanding the challenges affecting Apple and the direction it must take, require a bit more from columnists than "EU and US will force Apple to sell lemons".
Apple Retail Stores have nothing to do with the situation surrounding its iOS App Store.
I was pushing Apple for literally years for two huge things: retail stores and OS language support for Catalán.
They were key to the future of Apple here which was in free fall at the time.
All I got was resistance and excuses, even when things went public and got escalated to Apple Europe.
The biggest retail impediment was a fear of treading on Apple Authorised Dealers' turf and taking business away from them.
The problem was though that many authorised dealers were having a hard time keeping their heads above water and giving a mostly awful service to customers. They were also well out of the way of high foot traffic areas. Price was another issue.
By the time the (already underpowered) original iMac arrived (well after the US release) with literally one printer and one external higher capacity disk storage system, it was priced above the psychological price limit. It was available in select department stores though.
The same old problems were repeating themselves and the fight for Apple retail stores continued.
Stubbornly refusing to localise for Catalán meant not being elegible for sales to government run schools in an area with over seven million inhabitants. At the time I was advising in education.
The excuses continued until, finally, Apple decided to bite the bullet and push ahead with the retail store initiative (although it didn't reach my neck of the woods until later). Users now had direct access to the mothership and everything changed, for the better.
The stores themselves were very similar what the French retail outlet FNAC had been pushing for years, just more bare and cold. In fact Apple's stores within stores used FNAC probably for that reason. FNAC was a hub for culture and technology products for the target audience of Apple. Great customer service and its sales assistants were mostly knowledgeable and didn't receive commissions.
1. this weekly stuff is back? Unlucky. Was great without it.
2. then lots of not so subtle brags. No one likes a braggart.
While we’re at it, I think we should also be able to rule the EU and break up that monopoly as well.