The first Apple Store was opened way back in May ‘01. I still remember Steve Jobs giving a video sneak peak of what it would look like from the inside, and from the gleam in his eyes, you could easily figure out that this was something he was very proud and excited about. And why wouldn’t he be? He and people at Apple had worked hard to create an experience that reflected everything Apple, into something that was probably as un-Apple as it could ever get. And they had succeeded. No electronics company before, and definitely nobody since, has been able to duplicate the success that Apple has had with its Apple Stores; let’s face it, electronics companies don’t have or bother with the infrastructure to sell. They are more concerned with the infrastructure to make and (hopefully) innovate in their field. But Apple had to do things differently, and to do that, they had to break convention yet again.⌘

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Apple’s belief in and perception of itself would not allow its products to rest on the same shelf as other hardware makers. Showcasing the Macs next to cheap Dells and HPs brought them down to their level when people began comparing, and obviously, the value of Apple’s superior hardware and software design wasn’t immediately clear to the buyers. When on someone else’s stage, Apple could not decide how and where its products would be showcased, when they were the ones who best knew what the products were really meant for.⌘

Further Reading: Apple: America’s best retailer⌘

“I started to get scared,” says Jobs … describing what he saw circa 2000. The company was increasingly dependent on mega-retailers - companies that had little incentive, never mind training, to position Apple’s products as anything unique. “It was like, ‘We have to do something, or we’re going to be a victim of the plate tectonics. And we have to think different about this. We have to innovate here.’”

Apple is one of those companies which knows exactly what it has made its products for, and where their value lies for the common man. It has always portrayed and sold an uncompromisingly high value for its products. Apple deliberately arranged music players, digital cameras and camcorders with its computers, because it knew that that’s what people wanted to do with their computers — to use their computers as digital media hubs, and it knew that that’s what the Mac was built to do best compared to anybody else. When you believe in yourself, people believe in you too. And that’s why Apple holds 91% share of the market for PCs priced $1000 and above in the United States. It just doesn’t compete in the lower segment, because it wants to create something useful, not something that is cheap. It believes, and hence, proceeds on the single-minded path of showcasing value in every product. But those numbers aren’t all its doing, of course. Just put a Dell next to a Macbook Pro, and the fact of the matter becomes clear enough.⌘

Netbook • A small portable laptop computer designed for wireless communication and access to the Internet (from Wikipedia).⌘

Apple has never compromised on its bottom line. No company wants to. What’s amazing is that it has managed to do so without significant compromises to quality. While the rest of industry moves to cheaper netbooks¹ to tide over people suddenly becoming thrifty, they are doing so by trading in quality and value for volume. Sure, they might benefit ever so slightly in the current economic downturn, but the damage to their image will be much more permanent. As these manufacturers become the face of the masses, Apple continues to remain (and grow) as the face of the enthusiast and connoisseur. John Gruber put it nicely in his piece about Microsoft’s Long, Slow Decline, and the same thing can be said about pretty much every big hardware and software maker in the industry today:⌘

People who love computers overwhelmingly prefer to use a Mac today. Microsoft’s core problem is that they have lost the hearts of computer enthusiasts. Regular people don’t think about their choice of computer platform in detail and with passion like nerds do because, duh, they are not nerds.

Cheaper doesn’t mean better. And people know that. Cheaper is what you buy to make do for now. Quality, is what you really want, and the first thing you’re going for the moment you can. My father uses a Sony Vaio. Not a Lenovo ThinkPad, or an HP laptop. He’s not computer savvy, not at all. But even he understands the power of the brand and what it stands for. He knows that ThinkPads are for clerks and people who wear a tie to work. He knows HPs are for 14 year olds who want a computer but are too young to be given something expensive and meaningful. He uses a Vaio now, but has his eyes on the Macbook Pro 13”, delaying it only in anticipation of Snow Leopard².⌘

“Form is temporary, but class is permanent.”⌘

These other manufacturers are either losing, or have lost the perception of value. The downturn is temporary. Perception is long term. Apple rarely brings down price points for its products — usually replacing a product with a better product at the same price. And it does this for a reason, because it is harder to raise the entry price without making customers uncomfortable. Now that the price of the entire Macbook Pro line has been reduced (which they could do because of the success of the iPhone 3GS), I don’t think the lowest price will rise for a long time. Newer models may be introduced at higher prices, but the lower most price will remain the same. And just like that, they’ve increased the perception of value for their price, without taking a revenue hit. Which way do you think the tide is going to turn when people again have the money to spend on computers? The people who have been saving up, have been watching their richer colleagues and neighbours go out and buy Macs (and I know this because the previous quarter, they sold 2.6 million computers). It’s pretty easy to guesstimate which way their loyalty is going to sway.⌘

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There is a lot of truth in the saying “Once you go Mac, you never go back”. That is because once people get used to the way Apple’s ecosystem (at least, its PC ecosystem), its synergy of hardware and software coupled with a beautiful and productive UI works, it becomes very hard to look at anything else, never mind thinking about switching. It’s a one time investment, that pays for itself many times over. Holding and using something beautiful is always a much more rewarding experience. This is where Apple has excelled, and will continue to excel. It is because of Apple’s vision and “taste”, its ability to grasp what people want and need, that it will remain a quality act. And I say Apple, not Steve Jobs, because Tim Cook and co. have more than proven to us (the enthusiasts and admirers), the fanatics as well as the stock holders, that they can handle the reigns in Jobs’ absence. Apple is in good hands.⌘

While Microsoft continues to harp on about the “Apple Tax” and offers money to people pick products that it doesn’t even make, Apple continues to build amazing value into its products. They have usability and productivity value — it’s nice to be able to do what you want to do, in the fastest way possible, and without having to think about “how” to do it. They have design value — not only do the products look and feel nice, they are tough and able to take a decent amount of banging around as well. They have longevity value — Apple computers have always outlasted their regular PC counterparts by years, both in terms of hardware and software. Of course, the hardware needs some looking after (because face it, it’s a computer, not a punching bag), but even a 4-5 year old Mac OS beats the pants off the latest Windows. And finally when a Mac does come to the end of its power-use life, it has amazing resale value, because people know that a dying Mac is still better (for its price) than what they can get in a new PC. That’s because Macs come with pretty high specifications for their time. It’s not that Apple is limiting choice, but it’s giving us a quality computer that’s worth something (I come a full circle back to my netbook argument at this point). The Apple Tax is not a tax. It’s a premium one pays for quality.⌘

As it has always said “Think Different”, Apple has stuck to its motto. It dares to be different, and does so with confidence. We may call Apple a lot of things. Arrogant, smug or downright evil. I don’t agree with them and/or their policies all the time either. But one thing that neither you, nor I can deny, is that Apple very much knows how the game is played.⌘