Written by David Tebbutt, MacUser 06/91 item 02 - scanned
If you walk down the local high street and you smell freshly baked bread, do you get the urge to go and buy a loaf? Most people would, and, if they like the taste, they become regular customers.
I've chosen bread as an example of a product which can be sold on its own merits, but whose sales can be improved by additional effort - either by redirecting the extractor fans into the street or, if the baking is not done on the premises, by puffing a fresh-bread-aroma aerosol (if there is such a thing) into the street.
I'll come back to bread later. First, I'd like to talk about Apple's present problems. We've already heard about the job cuts and other economies within the company. Apple is in a hole and needs to cut its costs quickly. Paradoxically, this is a result of the great success of its new products. Apple now reports a current UK market share of 14% to 15% by volume. This would give it second place in UK personal computer sales, behind Compaq. This is a stunning achievement, but it has a heavy price.
Apple planned to increase its installed base by selling lots of low-end machines while still earning a meaty margin from its high-end products. A large user base was needed to encourage software developers to commit to the Mac, while the high-end margin would allow a controlled 18 month drift towards lower average margins. Unfortunately, the transformation has happened in just six months. Sales of the low-end machines exceeded expectations, but high-end sales fell short.
So, Apple now has to decide where to wield the axe. It's supposed to be across the board, but that doesn't make sense. It's OK to remove excess baggage but, if I were Apple, I'd be very careful about chopping research and development and certain aspects of marketing.
I'd also be careful about tinkering too much with the Apple culture. The Mac was created as 'the machine for the rest of us'. Apple is the company that took on IBM and, in terms of UK PCs sold, won. It is, or was, David up against the establishment Goliath. Apple has been a conspicuous big earner and big spender. Now, the spending has to slow, but it has to be in ways which will not affect the users' willingness to buy Apple products.
Apple has to decide what can be cut and what must be left intact. It will have to make the cuts very soon so, for what it's worth, I'd like to stick in my two penn'orth.
Apple believes that people buy into things like "the success of the company" which is why it spends a fortune on making itself look good, whether in its offices, at promotional events or computer shows. Apple is convinced that it has to be seen to be successful. There comes a point, though, when customers start thinking, "Hey, that's my money they're spending."
Why bang the drum like this if the company has a 14% to 15% market share? That's the message it needs to shout, by every means possible. It will convince far more people of Apple's credibility than flashy premises or a marquee at Ascot on Ladies' Day. Imagine the advertising potential for Apple when it becomes the top seller over here.
People buy the Mac because they think they'll enjoy using it; they believe it will help them; they have good feelings about Apple; and, perhaps, because they think others will be impressed.
All Apple has got to do is focus on those aspects of the operation which maximise these feelings among potential users. They can dispense with a lot of the flashiness without affecting the goodwill of the users or the press. In fact, it might actually make some new friends.
Returning to my bread analogy, the Mac is like the crusty new bread. Having tasted the Mac experience, the customer will return again and again. Sticking with the analogy, the aroma drifting out of the door is the murmur of satisfied users as they spread the word about their favourite computer. Promotional activities are the Apple equivalent of the aroma squirter. If the baker (Microsoft, say) up the road is getting all the customers because its extractor fans point into the street, then the other bakers (Apple) have to respond in some way.
The Mac is so good because of its attention to detail, its obsession with the user experience, and the close integration of its operating system, hardware and applications. Apple must not do anything to jeopardise this when making its cuts. If it started hacking at the developer teams, Apple could have long-term problems.
Apple shouldn't abandon promotional activities which create sales. On the other hand, we want it to spend enough to stay in business and produce more "insanely great" machines.