Sunday, May 27, 2007

Randall Stross just doesn't get it: a computer is just a box

I was amused by an article in The New York Times by Randall Stross entitled "Apple's Lesson for Sony's Stores: Just Connect" which convinced me that poor Randall simple doesn't get it. Apple is in a completely separate market space, or alternative universe, if you will. Whatever Apple's "lessons" might be, they have no relevance to the distinctly separate market for Sony's products and those of a myriad of other "PC vendors."

To most of us (normal people), a computer is plain and simply just a box, a commodity, an appliance, actually an information applicance, that does some useful functions, but we have no more desire to form an "emotional bond" with this box than with a blender, stove, or refrigerator. Frankly, most of us reserve "emotional bonds" for more animate objects.

By all means give Apple credit for the cult it has created and the support environment that it offers its cult, but spare us the stupidity of suggesting that these cultish "lessons" should be inflicted on "the rest of us" who have no interest in annointing Steve Jobs as our PC (Personal Cult) leader.

I do fully understand that a minority subset of the American people do gravitate towards cults and cult-like "emotional bonds", and I really do feel that they are entitled to do so, but I don't see any merit to trying to suggest that Sony, et al should try to foist that dysfunctionality on the rest of America.

The article does remind me of a point that really does bug me, namely that if Apple computers are legendary for their "ease of use", why are all of these Geniuses and Genius Bars needed at all? Yeah, this is yet another instance of the legendary reality distortion field.

As far as Sony, they recognize that any damn fool can buy a PC "box" at the nearest mall or Wal*Mart or on the Web, so they are simply using their stores as another form of promotion, and even if somebody doesn't walk into the store, at least the "Sony" brand is implanted in their mind for the next time they are thinking about what brand of PC "box" to buy.

By all means, computers should deliver value to their users, but value should be measured by function and satisfaction with results relative to costs rather than by measuring the strength of "emotional bonds." Yeah, I am quite familiar with the desire of retailers to rise above the commodity and "value" aspects of their products and who see "emotional bonds" as a tool, but I'm an advocate for the interests of consumers, not for retailers who might seek to distort the interests of consumers.

-- Jack Krupansky


At 7:31 AM EDT , Anonymous Anonymous said...

I'm not sure that Krupansky get's it. He says that value should be measured by function and satisfaction with results relative to costs rather than by measuring the strength of "emotional bonds."

For some people, cost is not as much an issue as function and satisfaction with results. They just want it to work. Jack doesn't suggest why people form emotional bonds with Apple, but I feel it's because the products ARE more functional. Granted not everyone can afford the higher cost, but I can't help but wonder if critics' gripes about Apple products have it's source, maybe subconsciously, mostly in the higher cost, and less in the usability.

At 12:53 PM EDT , Anonymous Jack Krupansky said...

Thanks for the comments.

First, there is no question that a lot of PC owners really do wish their boxes were easier to use and more functional. But, it is fairly obvious that the purported benefits of that Apple offers simply aren't enough to outweigh the price differential and other non-price factors.

I won't argue against the thesis that if Apple lowered its prices significantly their market share might rise significantly, but the simple fact that they can do so and choose not to strongly suggests that they value the cult aspect that market share and higher profits.

Unless you want to argue that the emotional bond think only occurs *because* the price is higher.

This brings us back to the thesis that only a subset of the American people are "into" the cult-like emotional bond think with their "boxes." And, that trying to export the cult-like emotional bond thing to other segments of the personal computer market where the PC is more likely to be strictly a box-like commodity is not a... um... "slam dunk" as Randall seems to imply.

-- Jack Krupansky

At 1:15 PM EDT , Blogger vaporland said...

Apple's pricing for their laptops is comparable to other vendors with equivalent specifications. Apple does not make low quality cheap products.

Come to think of it, neither does Porsche or BMW, and they both seem to do quite well in a 'commodity marketplace'.

Call it a 'cult' if you like, but more and more people value quality over low price - for everyone else, there's HP, Dell, Windows and Wal-Mart.

Apple's monitors and desktop computers are more expensive, but also are of far better quality than some of the junk peddled by others - a Dodge Neon is not a Subaru Outback.

Apple's servers do not offer 100% Microsoft compatibility, and are at a slight premium to equivalent hardware products, but the long term cost of licensing and ownership is dramatically lower than Windows Server based products, with 80% of the functionality and 100% less viruses. Despite what some 'consultants' may say, Apple plays well with Windows networking environments.

Apple is realizing 20% margins on computer products that everyone else is earning 4% on.

Apple products sold through their stores achieve even higher margins.

Apple is not perfect - I personally find their 'geniuses' overrated - but they have solid products that work well and are simple to use.

I am anxious to see how well they shake up the cellphone business - another commodity marketplace with confusing products and 2% margins, where they will no doubt also achieve 20% margins...

At 2:02 PM EDT , Anonymous Jack Krupansky said...

"Apple's pricing for their laptops is comparable to other vendors with equivalent specifications. Apple does not make low quality cheap products."

I had heard that too, but when I recently checked, Apple's prices weren't even close, at least for mid-range notebook computers, which I define as $1,500 and under (or $950 to $1,500 to be more specific.) Apple doesn't even offer a low-cost notebook (under $950.) There is roughly a $200 premium for a comparable Apple notebook computer.


As far as cellphones and Apples's upcoming iPhone, there are two points: 1) $499 is way too high for most people for a "phone" or even a smartphone, and 2) *everybody* is anxiously waiting to see how the market really responds to the iPhone. The bottom line is that the iPhone will do less to "shake up" the cellphone business (which will remain commodity priced under $300 even for smartphones) than focus on creating a new, high end segment for premium, rich media, which the Nokia N95 (priced at around $750 unlocked) is poised to be king of the hill for a while. The N95 has a 5M-pixel camera while the iPhone has only a 2M-pixel camera -- ouch! The N95 has full-bore 3G support, the iPhone doesn't. In fact, the N95 has 3.5G support (HSPDA). The iPhone does have its advantages (e.g., bigger screen, 4-8GB Flash builtin Flash), but once again, the cool/cult thing doesn't have as much attraction to a lot of people. In fact, there are probably a lot of people who will find the N95 to be "cooler" in a lot of ways than the iPhone. In any case, I can't wait to see how the iPhone fares against the competition in the upcoming holdiday shopping season, barely six months away. Yes, there definitely is a niche market for high-end, premium devices, but there is also a huge market for "the rest of us."

Face it, the Apple "market" is primarily an elitist phenomenon, which is not in the best interest of us populists.

-- Jack Krupansky

At 8:40 PM EDT , Blogger vaporland said...

Say what you want about the iPhone - the final specs have not even been published.

I have a prediction: they will sell them as fast as they can make them, they will sell every one they do make (one million in the first year, from zero market share previously), and they will make a nice 20% margin on each one in the process . . .

At 9:45 PM EDT , Anonymous Jack Krupansky said...

Yes, but even if 100% of what you have said is true, *none* of that supports poor Randall's conjecture that any of Apples's cult-related "lessons" would be relevant to Sony.

And, of course, none of this relates to the average consumer, "the rest of us."

Let Apple keep its cult-like following with their "emotional bonding" to their machines. Sony would be better advised to focus on delivering high value at a lower cost and forget the cult-building thing.

-- Jack Krupansky


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