Apple Must Make A Decision About The Commercial Market And The Channel

Value-added channel play: time to get juiced?

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Apple, fresh off a quarter in which it had record shipments of Macs and continued remarkable growth with iPod sales, at some point needs to make a public decision about its desire for market share.

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That decision surrounds whether or not it wants to be a consumer products company and leave any share of the commercial market to sheer luck. There continues to be a small number of solution providers that are engaged in the commercial market with Apple, despite the company's focus on consumers. But if Apple is drop-dead serious about the commercial market, at some point it is going to have to reach out more to the value-added channel.

In the interest of full disclosure let me say I've become a Mac convert over the past few years. More than 10 years ago, I believed there was no future for Apple given the incompatibility of its product line with the installed infrastructure of the day. The Internet, of course, changed all that. Today, Internet connectivity is far more important than PC network connectivity.

The eight-PC network I have at home has been nearly completely converted to Macs and is now made up of just two Wintel machines. I can tell you that those two machines cause all the headaches while the Macs just work and very rarely require any attention. That's a Windows issue, of course, and in the consumer market, it is easy to see how the total cost of ownership is far less with the Macintosh than with Windows.

But things aren't so clear in the commercial space, and many companies resist Apple. That resistance could easily be overcome over time if Apple would get serious about the indirect channel.

I had to laugh at a recent Gartner report that suggested Apple should authorize Dell as a reseller for the consumer space because both companies have strong ties to Intel. This makes no sense for Apple in either the consumer or the commercial space, in my opinion. Greater distribution through retail electronics stores would make sense because it's just too hard to find Macs in consumer outlets.

But it's the commercial space I'd like to focus on here.

Apple compatibility is and will continue to become less of an issue as more software is available as a service with little need to run it locally.

'The software-as-a-service trend and the managed services environment are going to make it easier for Apple in the commercial space. But to capitalize on that, it will need a larger, engaged, value-added channel.'

Today, Apple's strengths in the commercial market really surround publishing and photography. But with the superiority of the Apple operating system and an increase in the availability of critical applications offered as a service, the company has an opportunity to make its mark.

Apple's pullback from the channel in the 1990s was a result of its declining market share, which was really caused by the compatibility problems of the day. Today, Apple has the resources to get serious about the channel again.

More importantly, its brand, which was on the decline in the early to mid-90s, is now obviously one of the premier brands in the world.

Fact is, it's cool to be associated with Apple now.

My point in all this is that the software-as-a-service trend and the managed services environment are going to make it easier for Apple in the commercial space. But in order to capitalize on that, the company will need a larger, engaged value-added channel.

Time will tell, but if Apple doesn't make a value-added channel move soon, then we can assume it wants to be a consumer market player only.

Make something happen. I can be reached at (781) 839-1202 or via e-mail at

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