The Invention of the PC

This story has all those “Creative Destruction” elements that were once outlined by Joseph Schumpeter: Innovation, entrepreneurship, business strategy, capital investment leading to the destruction of old products to give room to the new.

I am not going to retell the story of the PC here. This story is already told by Robert X. Cringely in the PBS documentary “Triumph of the Nerds.” It is a story about:

• Entrepreneurship and the inevitable pursuit of success by those like Steve Jobs, Steve Wozniak, Bill Gates, Paul Allen, Ed Roberts, and others from the Homebrew Computer Club in Silicon Valley.
  
• The important role of the banks and venture capitalists: How Steve Jobs, “the scruffy 19 year-old seduced the conservative world of venture capitalists” (R. Cringely).
  
• The element of luck as exhibited in the time when IBM was looking for a third party to develop the Operating System for its new PC, lucky for Microsoft.
  
• The importance of a sound Strategy because it takes more than luck: How Microsoft would stay on “the bear’s back [IBM] and the bear would twist and turn and try to buck you and throw you” (S. Ballmer).
  

Today, IBM is not anything like that computer giant it once was. It is still a very important company but not the same. Apple is a synonym of innovation. Microsoft is a synonym of industrial success. And Intel taught us Moore’s Law: How microprocessor technology advances by doubling performance every 18 months, creating a fascinating Economics problem.

One-to-One Services in Apple Stores

When you walk into an Apple store you think that you have entered a mega showroom, a place to see and to test the newest Apple products. It is an exciting hands-on experience. But Apple Retail Stores are more than that. Apple stores are a place where Apple professionals meet customers face-to-face, one-to-one to provide revenue generating consulting services.

The front-end of most Apple stores normally contains tables that showcase new products: Notebooks, computers iPods, iPhones, and their latest software. But the back-end of most Apple stores, or the second floor when the store has multiple levels, contains tables for the use of Apple professionals and their customers. Customers can buy consulting blocks of training time. Customers have the choice to come in for fifteen minutes one day, ten minutes another day, fifteen minutes another day, etc. until they complete their block of training time.

Apple continues to re-invent itself as a company. Through its history, Apple has been known for creativity and innovation: Computers (e.g. Apple Macintosh, iPhone) and software (e.g. iTunes, QuickTime). Apple is re-inventing itself today by creating a new business model based on consulting services delivered inside Apple stores.

This is not the first time that a large company looks to services as a new revenue opportunity. IBM may take the credit of being the first large company to look to professional services as a revenue strategy, though business to business. And companies in other retail industries have implemented training services within their stores: For example, William Sonoma sells kitchen items and offers cooking lessons within their stores. But Apple is doing it in a different way. Apple stores are trendy cool places where people want to be seen and at the same time customers find solutions to their individual needs; one-to-one.

That is the innovation Apple is introducing. That is the Schumpeterian event. To compete with Apple, companies will be pressured to find new ways to reach their customers face-to-face, one-to-one. The innovation here goes beyond the product. It is more than hardware, more than software, and it goes beyond customer training. It is a strategy that provides new revenue streams that also improves customer experience and satisfaction. It brings the customer back to Apple stores over and over again.

http://www.apple.com/retail/onetoone/