Apple plots new strategy to target small businesses through retail stores
The company is currently looking to hire engineers in a handful of retail stores in the U.S., and those employees would specialize in assembling Mac-based computer systems for small businesses. People familiar with the company's strategy told The Wall Street Journal that the hires are part of a greater focus on small business clients.
Apple is said to have at least one salesperson dedicated to managing accounts with local businesses, and has also recently begun recruiting within its sales staff to create a team that negotiates leasing and pricing terms for business clients. People familiar with the company's plans said the strategy has proven successful, as some stores have seen their revenue more than double after implementing the program.
The company has also begun an incentive program that will assign business-centered sales staff based on revenue targets for each store. And some of Apple's newer retail locations include specialized conference rooms, designed specifically for meetings between the sales staff and business executives.
The company's new focus is meant to take Apple beyond its market of consumers and niche businesses, like design and media firms, the Journal said. Apple hopes to leverage the popularity of the iPhone and iPad, both of which have found broad adoption in the enterprise market. The company hopes that familiarity with those products will lead businesses to pursue Apple's Mac computers and servers.
"Apple has had mixed results trying to crack the business market in the past. Its computers are generally more expensive than comparable PCs, prompting cost-conscious companies to look for cheaper alternatives," the report said. "Apple's retail staff historically hasn't provided the hand-holding and on-site support that many businesses expect. Instead, it has cultivated a network of authorized consultants, many of whose customers are referrals from Apple's retail employees."
The new strategy could prove lucrative: The Journal noted that North American businesses with less than 1,000 employees are expected to spend $310.8 billion on information technology this year, according to Gartner. That number is expected to increase by 6 percent, to $328.3 billion, in 2011.
During Apple's quarterly earnings conference call on Tuesday, Chief Operating Officer Tim Cook revealed that more than 80 percent of the Fortune 100 are deploying or piloting the iPhone, while more than 50 percent are using or testing the iPad. Mac hardware, however, has not yet seen as great of an embrace from the enterprise market.
"In terms of the Macintosh, you can see the Mac had an incredible quarter," Cook said, referring to record sales of 3.47 million Macs. "We're still selling principally to consumer and education, but we are seeing businesses with increasing interest in the Mac. It's more difficult to measure because many of those sales are filled through the channel. But we're obviously thrilled with growing 33 percent year on year."
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There is so much ground they can tackle, even on this front. I still wish they would have bought Sun and made a version of Mac OS X that was specifically for business machines in a casing that resembled, more or less, NeXT and Sparc Workstations to clearly differentiate them from the Mac line.
During Apple's quarterly earnings conference call on Tuesay,
Good article, one typo, should be "Tuesday".
They are going to sell a lot of minis and mini servers.
They are going to sell a lot of minis and mini servers.
Plus everything else. Between internal needs and things like gifts, businesses can have cause to buy anything and everything Apple sells
It is not just technology that is needed to be addressed. They also need people who understand the needs of specific sectors -- retail, service, health (this is a big area with various categories, e.g., hospitals, clinics, health care agencies, doctors, etc.), biotech, and many others. Each has specific business needs that must be addressed in a more holistic manner.
I was talking to the business rep of Apple in the Bolyston Apple Store in Boston, and he was not really as well-versed with the "trends" in some of the healthcare categories. This is big in the metro Boston area.It is unlikely that Apple could really hire any signle or a few employees attached to an Apple Store to be an expert in all business sectors though. However, in each metro-area, there are small businesses that focus on Apple products (although not limited to Apple sometimes) that attempt to provide similar services to specific sectors in the metro area.
I understand from previous reports that Apple has not been cultivating or strengthening its ties to these local resources. For example, when force to choose between Best Buy, Walmart and these small businesses (providing Apple-centric technical and business support to local businesses), Apple tended to favor the big retail outlets when it comes to the release of new products. This is misguided because it is these local Apple-centric technical and business support centers that truly knows the needs of the local target business sectors. It is these local support centers that the small business sectors are likely to turn to for advise.
Thus, while Apple should indeed continue to develop its local Apple Store based group to address the needs of local businesses, it must strnegthen its ties with existing local Apple-centric technical and business support centers. The other advantage of this collaboration is that Apple need not have to establish a huge sales division to reach out to the specific needs within each metro area.
CGC