The Relevancy of Apple

If you have never read about the early days of Microsoft, I would strongly encourage you to do so. If a fascinating story and the world’s largest software company exists today largely based upon a single bad decision from IBM (another story altogether). Back in the early 90’s, I had a Macintosh just like many people at the time. The Mac was based upon proprietary hardware and was thus more expensive than the IBM PCs at the time.

This decision by Apple proved to be costly as Microsoft ended up dominating the market for PCs. For most people, Apple became irrelevant. There were some niche markets where the Mac dominated like publishing and graphic design but for most of the world, a PC running Windows was the only choice.

Fast forward several years… after years of listening to tapes via a Sony Walkman, I learned about a new gadget that could play digital music. I’m a gadget guy and I jumped at the chance to pick up one of the first generation MP3 players. Quite simply, it was terrible. The device was clunky and the software was abysmal. The market for MP3 players soon explored however with no clear dominant leader.

Enter the iPod – The Apple iPod simply put made Apple relevant once again. This story should be required reading for anyone studying business at a university or business school. They managed to capture 75% of a fragmented market but more importantly, Apple managed to make the iPod cool.

You just can’t place a value on this. The iPod did for digital music what Google did for search. Heck, I even went out and bought one simply because of all the buzz. The story gets better though. Apple now reports that the iPod is driving sales of Macintosh computers. Guess where most people go to buy their iPod btw? They go to an Apple store. This is unbelievable in an age where you can buy something with 2 clicks of your mouse while sitting at a desk in your own home.

From the device to the online store to the purchasing experience, Apple has somehow managed to get just about everything right with this product. When I bought my Ipod, there was a table at the store piled high with boxes. I grabbed the one I wanted and a clerk was standing there with a handheld device. He swiped my credit card and they emailed me a receipt. Put box in bag and out the door I went. This was at Christmas time when going to a retail store is like being in a war zone. No lines and more importantly no hassle. No other retailer has managed to implement this process in a seamless manner.

I use my Nano primarily for running. It has no moving parts so it is perfect for this type of activity. A while back, Apple and Nike worked together to create the Nike Sport Kit. It plugs into an iPod and generates useful information that runners care about. It’s simple, cheap and just works. The beauty of this device is that if I didn’t already have a digital music player, I would probably have bought an iPod for this additional functionality. Of course, Nike now has a new excuse for people to buy new shoes, special shirts and other assorted accessories. From a business standpoint, this is a brilliant move.

Apple has managed to capture the “magic” that inspires consumers to rush out and spend their hard earned dollars and package it up in a simple white box. In doing so, they are very much relevant today and have changed the way people look at digital music forever.