Saturday, February 18, 2012

Life as an Apple Authorized Reseller

There are 361 Apple Stores around the world, but not every city is big enough to have one. To bridge the gap, Apple has a network of “authorized resellers.” Dylan Love has written a profile of one of them.

A few interesting tidbits from the article...

  • They make only about 10% profit on Apple products.

  • They make most of their money selling services and third-party accessories.

  • Apple won't open a new store in a given market, unless it can do $30 million a year in sales.

If that last point is true, then you can calculate the lower bound of their sales in any city, by multiplying the number of Apple Stores there by $30 million.

Read the article for more.

Friday, February 17, 2012

Amazon shows us how to do a product video properly

The video Amazon did to demonstrate their new Kindle e-reader is incredibly well done...

Shown above, it's quite long, but doesn't feel long — like a series of bullet points, strung together. It flows almost like a slide presentation, but more upbeat and much more entertaining.

Large text emphasizes each benefit of the product, as the narrator concisely explains in more detail. The music gives it a casual, lighthearted feeling of comfort. It's viewable at any size.

Even the aspect ratio was given extra consideration. A hi-def 16:9 video is squashed when displayed vertically on a smartphone or tablet. You have to turn it sideways to view it properly. At 720x634 Amazon's video is almost square, so it doesn't matter which way you hold your device — it doesn't get squashed. Smart.

For a higher quality version of the video (or if you're on a mobile browser) here's a direct link to the 6.5 megabyte MP4 file.

Wednesday, February 15, 2012

Apple giveth and Apple taketh away

Yesterday's post discussed the benefits to Apple of cutting Best Buy and others out of selling the (rumoured) new Apple TV(s). This elicited a Twitter comment that led to an even better reason to cut them out...

For Apple to succeed in the TV market in a big way (or in their terminology, not as simply "a hobby") they need the cooperation of the cable providers more than they need Best Buy and Walmart. If fact, they probably don't need major retailers at all. Their own Apple Stores plus those of the cable providers are more than enough to start.

But, how would their valued retail partners react to this snub? Wouldn't they flip out?

Yes, they most definitely would.

Being shut out of the new game-changing Apple TV would be a major blow to them. Their TV sales are already in decline. How could they compete?

Apple's answer to that question is... the old Apple TV.

Bundling an Apple TV box with a selection from their wall-of-TVs would allow Best Buy and friends to compete for those otherwise unreachable Apple customers. They could offer more choice of sizes than Apple would, and they wouldn't have to change their selling practices much.

With this lifeboat of sorts, their snubbed retail partners would now be highly motivated to push these Apple TV bundles very aggressively.

This is really good for Apple, because it locks in these customers for future Apple TV purchases — some of which will be directly from Apple. Apple gains a new customer; the retailer potentially loses a future one. Strategically, it's ingenious.

Paradoxically, Best Buy might even prefer not having a TV from Apple to sell. With Apple's stingy margins, it would be a lot more profitable to continue selling other makers' TVs.

Tuesday, February 14, 2012

What if Apple sold TVs like they sell iPhones?

Apple started selling the iPhone exclusively through AT&T stores.  This made sense for many reasons, not the least of which is that there are several thousands of these stores, in short distance of every American.

What if they did the same thing for their (rumoured) new Apple TV?

Cutting out the usual retail middlemen has a number of benefits...

  • More profit for Apple and the cable providers.

  • Avoids the wall-of-TVs you get at Best Buy, Walmart, etc.  Theirs would be the only TV in the cable store.  No competition.

  • Ease of delivery & installation.  TVs are big, heavy, and a hassle to install.  By letting the cable operators do both, this simplifies the delivery logistics and provides a much better customer experience.  It also allows the cable operators to profit on the delivery/installation fees, and potentially sell lucrative accessories.

  • All of the above incentivizes the cable providers to play according to Apple's game plan.

Could this be what Steve Jobs meant when he said he'd "finally cracked it"?