Memo to Cliff Edwards at BusinessWeek: Neener!

[thatcrazycajun]

Courtesy of Fake Steve Jobs: Back in 2001, a BusinessWeek columnist outlined here all the reasons why Apple Inc. couldn't possibly succeed with its own chain of retail stores, which it was then just launching. One market research type he quoted figured that Apple would need to move $12 million worth of merch a year per store just to pay for the space, while Gateway then sold around $8 million annually through its chain. Between that, building costs and overhead, the marketeer said, "I give them two years before they're turning out the lights on a very painful and expensive mistake."

That was six years ago. Less than two months ago, the Cupertino firm opened its 200th Apple Store, while Gateway closed every last one of its outlets three years ago. Apple Stores are now all over the US, the UK, Japan and Canada, and they've established a beachhead on the Continent with a store in Rome, Italy. Not bad for a chain that was supposed to have been shuttered since 2003.

Hey, Cliff, how's that plate of crow taste? Hee, hee, hee...

Comments

[scruffycritter.livejournal.com]

And the article was wrong about the location of that Tysons' store.

It isn't in the "Posh Tyson's Galleria". It's in Tyson's Corner Center. I'm sure rents there are a tad cheaper.

What the Wall Street article missed was that 1) Apple's profit margin per sale is higher than in the PC industry and 2) Gateway's product line was flawed.

We bought 2 machines from Gateway country stores between 1999 and 2001. We tried for a third in 2003. They just didn't have something aimed at us. You couldnt get a flat screen monitor on a machine with XP Pro unless you wanted to pay a fortune.

Build it right, sell it right

[sodyera.livejournal.com]

The paradigm (ooh, big word) that the statement's author came from ignored other single-brand retailers like automobile dealers. Based on that statement, all the motor car retailers in the world should have melded into a couple of big-chain Automart or CarUSA stores about 40 years ago, but exactly the opposite occurred. One must take into account the basic value of the product being sold and the company's ability to profitably operate and propogate its franchise along with the ability to manufacture and market a superior product and buyer/user experience.

In other words, Gateway failed because they couldn't advertise right and were selling crap. Apple has a decent product and knows how to sell it. That's why the first tanked and the second is still growing.

[filkferengi]

Careful; your schadenfreude's showing. ;)