Apple is the new Dell

I sat eating lunch with coworkers when we saw the news over the wire. Dell announced the end of retail sales, taking its business direct to customers — that was 1994. We laughed about the craziness. Compaq dominated the PC market, leveraging a huge partner network of dealers, resellers and retailers. Cutting out the middleman meant more margin for Dell, and presumably lower costs for businesses and consumers, but how would the brand maintain visibility without shelf space? Dell direct seemed destined to failure.

Succeed it did, making Dell the No.1 PC maker, based on shipments, by decade’s end. Dell didn’t just go direct but redefined PC distribution, manufacturing and marketing. The Austin, Texas-based company later adopted real-time manufacturing logistics that made competing operations from Compaq, HP and IBM look antiquated. While their managers guessed how many PCs to produce and ship to the channel, Dell provided component suppliers access to orders in real time, which kept the company from over-ordering, dramatically cut component costs and let customers configure exactly what they wanted. More than a decade after Dell’s high (and today’s subsequent low), Apple distribution, manufacturing and marketing is the envy of competitors. Both companies achieved similar supply-chain dominance, but theirs is a fascinating study of similarities and contrasts.

What’s in Store

As unbelievable as Dell direct seemed in 1994, opening of the first Apple stores in May 2001, equally perplexed. Recession gripped America, the failed PowerMac G4 Cube contributed to a massive inventory build up of unsold computers, Apple’s stock had fallen from more than $70 a share to just a few bucks and the company issued profit warnings (and eventual losses). Meanwhile, Gateway was in process of shuttering all its retail operations. But Apple pushed ahead with the first stores, with then CEO Steve Jobs pledging Mac market share would exceed 5 percent globally. A decade and 330 stores later, in third quarter 2011, Apple reached the 5 percent milestone.

The real achievements were iPod, iPhone and iPad and the distribution and supply-chain logistics Apple CEO Tim Cook put in place when working in lesser roles, most recently as chief operating officer. These categories were not dominated by the Windows monopoly, which market share choke-hold no vendor could break. Hell, Apple took 10 years to reach 5 percent share. But there were no monopolies in these device markets, even considering Nokia’s huge global cell phone share during much of the 1990s and the Noughties. Strangely, Cook applied the kind of channel logistics he learned while working at Compaq (and also IBM) to Apple.

Yes, Compaq. The king clone maker that freed MS-DOS from IBM’s clutches by reverse-engineering Big Blue’s BIOS and literally launching the Microsoft PC era. Compaq’s success assured Apple’s failure during the Macintosh-DOS/Windows PC wars of the late 1980s and early 1990s. The same Compaq that laid foundation for competing Dell direct and helped bring Apple so near bankruptcy in 1996 that Michael Dell barked the Mac maker should sell off its assets and give the proceeds to shareholders.

Be Direct and Indirect

Apple-Dell manufacturing and distribution similarities and contrasts are startling:

• Whereas Dell went direct without retail, Apple did so with its own stores, later using its success to broaden distribution relationships for iPod that also benefited the Mac.
• Dell and Apple are both aggressive marketers, particularly television, which is just as important advertising medium today as the 1990s.
• Both companies seek to control the customer experience end-to-end, from pre-sales to sales, setup and service.
• Dell’s is the Burger King business — have it your way. By contrast, buyers have it Apple’s way. There are fewer configurations, which better fits Apple’s more channel-centric supply-chain model.
• Apple and Dell both use economies of scale to get the best prices from suppliers.
• But their supply-chain approaches differ. Dell uses real-time manufacturing to secure best prices, although nothing like a decade ago. Apple orders large volumes of components ahead of time, locking in lower prices and also locking out competitors from getting them. There’s risk, if people don’t buy, however.
• Apple uses its supply-chain efficiencies to preserve margins. Dell uses them to pass on lower prices to customers.

Apple’s supply-chain bears more similarity to Compaq’s than to Dell’s, although really it’s mixture of the two. Apple sells direct online and through its retail stores, but also through tens of thousands of third parties. When Apple opened its California and Virginia shops in May 2001, major retailers had dropped or soon would stop selling Macintosh. But demand for iPod in the mid Noughties opened up new retail channels, which Apple seized. Securing them later proved immeasurably valuable for launching iPhone and iPad.

There were problems with Dell’s direct distribution model that Cook overcame. During the company’s heyday, Americans eagerly purchased direct but much of the rest of the world preferred buying from dealers and resellers. Dell didn’t have the international reach necessary when major mature markets saturated, because the direct model limited reach and sales. PC manufacturers with broader global reach do better. For example, HP is No. 1 globally and, during third quarter 2011, in a stunning upset, Lenovo snatched second place from Dell. Today, Dell sells through retail, too, but not with the global reach of its two major competitors.

Cook not only ensured that iPod had global reach but that it was everywhere — more than 40,000 retail outlets. That kind of distribution hugely benefits iPhone and iPad today. For example, during Apple’s calendar Q3 conference call, Cook described China as second-most important market, accounting for 16 percent of revenues. Get this: 63 percent of calendar Q3 revenues came from international sales.

Apple has the right Cook

Tim Cook was Steve Jobs’ best hire, and the former COO doesn’t get enough credit for Apple’s present-day success. Jobs gets too much of it. Without the distribution and manufacturing logistics that Cook put in place over 10 years, Apple wouldn’t be the tech giant it is today — or the supply-chain envy of competitors. It’s the place of sales dominance and envy Dell held during an earlier computing generation. What a juxtaposition. Today Apple looks down on smitten Dell. Roles are reversed, and CEO Cook and his top managers should reflect at length about it. As Dell demonstrates, today’s supply-chain king is tomorrow’s pauper.

During the late 1990s and early 2000s, Dell competitors changed their ways, improving manufacturing and distribution logistics and eventually eliminating the direct-PC maker’s supply-side advantages. Consolidation helped, as competitors acquired Compaq and Gateway and IBM sold off its PC business to Lenovo. Dell competitors improved supply-side and sell-through efficiencies while still maintaining strong dealer, reseller and retail channels and broadening direct sales. But margins declined for everyone, as Dell and HP, particularly, fought a series of aggressive PC price wars.

Apple’s situation today is similar, which is one of two reasons I call it the new Dell. The other is supply-side and sell-through efficiencies that put Apple head and shoulders above many competitors. But its manufacturing and distribution advantages can easily be imitated, perhaps more so than Dell’s. Reach is the first — how many places sell Apple products, particularly iPad, iPhone and iPod, and third-party add-ons and peripherals. Economies of scale, which let Apple negotiate and lock in component prices and availability, is the other.

Apple has the right Cook in the kitchen, but celebrity chefs are sure to follow. They’ll adapt and improve Apple’s supply-chain recipe, just like Dell’s PC competitors did a decade ago. As significant, as more manufacturing capacity comes online, Apple won’t as easily get the best prices or, by monopolizing supply, shut out competitors producing smartphones, tablets and other connected mobile devices. As components become more readily available and for lower costs, competitors can improve margins and still lower selling prices against products like iPhone and iPad.

Finally, look at the competition. Samsung sells smartphones and tablets that compete with iPhone and iPad and produces components Apple uses in them. Samsung has capability to eventually improve the Apple recipe, as does Lenovo, which now sells Android tablets, and Nokia, as it reinvents around Windows Phone. Apple is the Dell today because of supply-side and sell-through logistics. Apple doesn’t want to be Dell tomorrow, beaten back by better cooks in the kitchen.

Photo Credit: pcruciatti/Shutterstock

Article source: http://betanews.com/2011/11/27/apple-is-the-new-dell/

iCam concept add-on for iPhone is a photographer’s dream

My iPhone is so handy and so much better at getting good pictures than it used to be that I find myself taking out the DSLR kit less and less these days, and just doing a little more work on the editing side, something Annie Leibovitz says is the key to great shots anyway. But a new iPhone accessory concept brings the best of both worlds via a single device — albeit one that doesn’t exist, yet.

The iCam is a simple case for the iPhone 5 (yes, iPhone 5), as conceptualized by Italy’s ADR Studio. The studio used a mock-up it had created for the iPhone 5, featuring a larger edge-to-edge screen and oval home button, as the base device for the iCam add-on, but it’s not hard to imagine it working with the iPhone 4 either.

Basically, it provides a slim case that you snap the iPhone into to gain access to an interchangeable lens system, as well as a front-facing small display for self-potrait shots, and a built-in pico projector to show off your slideshows. It also adds hardware controls and a preset wheel like you’ll find on most digital cameras these days, and looks terrific in aluminum. ADR posits that such a device could be made by Apple itself, and the quality of the design definitely lives up to that company’s standards.

It looks great, is actually thick enough that you might be able to believe that it could basically contain much of a 10.1-megapixel compact system camera’s guts, minus those parts the iPhone itself handles, and would really go a long way toward making the iPhone an acceptable semi-pro DSLR replacement, unlike some currently available best-fit solutions that likely won’t satisfy many. But, as mentioned, it’s a concept, so for now it remains a tantalizing, beautiful dream.

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Article source: http://gigaom.com/apple/icam-concept-add-on-for-iphone-is-a-photographers-dream/

Your Mobile Elves: 5 Shopping Apps to Make Black Friday Easier

This Black Friday, here are a few things to whet your bargain-hunting “app”-etite: 5 mobile apps designed to help you nab deals during the holiday weekend shopping bonanza.

1. Shopcade has launched what it calls a personalized, social shopping app within Facebook that allows users to discover, shop and share products from 20,000 brands from the U.S. and Great Britain — from fashion and beauty products to tech goods — while earning cash rewards.

Consumers can create their own “Shopcades” — fluid lists of their favorite products — which they share with Facebook friends. When one friend buys from another’s Shopcade, both get rewarded with real cash. “There are two options for the cash reward: Consumers can either collect it via PayPal or donate to charity,” a spokeswoman says.

2. Walgreens (WAG) is adding scannable coupons to its apps for the iPhone, iPad and iPod touch, offering exclusive discounts to its mobile device-wielding customers beginning Black Friday.

“Mobile couponing allows our customers to simply go to a store and save on select items without having to clip or print coupons,” says Jim Cohn, media relations manager for Walgreens.

3. PriceGrabber.com, the price-comparison and online-shopping site, has updated its free iPhone, iPad and Android app for the holidays. In addition to hunting down the lowest price on millions of products from online merchants and sellers, the PriceGrabber app now also offers shoppers 100,000 coupons in their geographic area, says general manager Graham Jones.

The new DealGrabber iPhone app finds local daily deals in your area, “down to where you’re standing,” from group-buying sites like Groupon and Living Social, says a spokeswoman.

4. Bradsdeals.com has updated its Black Friday By BradsDeals iPhone app to include a feature that lets shoppers view pre-release Black Friday ads for major stores, handpicked Black Friday deals, and map out the stores and products they want to hit. “Essentially, it lets you take your Black Friday research with you,” says Brad Wilson, CEO and editor-in-chief of BradsDeals.com.

5. Slice for the iPhone,while not a deal-hunting app, is designed to help you organize your shopping expeditions. The free app tracks your online shopping history and product shipments, automatically culling the information from electronic receipts in your email — from product tracking numbers to shipping notifications. It then compiles the data for easy reference, putting all your past purchase information at your fingertips.

Tagged: bargain hunting, BargainHunting, Black Friday, BlackFriday, Bradsdeals.com, deal apps, DealApps, Facebook, Finance, IPad, iphone, personal finance, PersonalFinance, PriceGrabber, PriceGrabber.com,

Article source: http://www.dailyfinance.com/2011/11/25/your-mobile-elves-5-shopping-apps-to-make-black-friday-easier/