Inside Steve's Brain - Leander Kahney [72]
The same is true when it comes to hardware. When developing a product, Sony managers would often present a list of the features in competing products and use that as the blueprint. But by the time the Sony product came out, the market had moved on. Rubinstein told me that the iPod should have been Sony’s. “The Sony Walkman changed how people listened to music,” he said. “How they [let that] slip through their fingers I’ll never understand. They should have owned it. The iPod should have been Sony.” Rubinstein said Sony didn’t develop the iPod because it was afraid of hurting its other products. “A lot of it is fear of killing your own products,” he said. “You don’t want to kill your products if they’re successful.”27 But Jobs isn’t afraid. He killed Apple’s most popular iPod model—the mini—at the height of its popularity in favor of a newer, thinner model, the nano. “Steve drives a lot of that,” said Rubinstein. “He’s a burn-the-boats kind of guy. If you burn the boats, you have to stand and fight.”28
An Apple Innovation Case Study: The Retail Stores
Apple’s phenomenally successful retail stores are an unlikely but telling example of the company’s innovation at work. The stores were born of necessity, inspired by the digital hub, and developed like all of Apple’s products—prototyped, tested, and refined.
Drive to your local upscale mall and chances are you’ll find an Apple Store. Nestled among the frilly Lane Bryants and Victoria’s Secrets you’ll see a high-tech boutique full of shiny white plastic and silver metal. The store has no name—just a big, brightly lit Apple logo in the middle of a stainless steel facade. Below the store’s metal forehead, you’ll see a big wide-open window with an eye-catching display showcasing the latest iPhones or iPods.
Step inside and you’ll find the store is a modest size, not too big and not too small. It will be packed with people; they always are. There’s often a line to get in when the store opens, and there are a few stragglers reluctant to leave when it closes at night.
The store is very seductive. You feel like you’re in a vision of a Kubrickian future—full of gleaming space-age hardware. It is inviting and low key. You’re free to play around with everything on display, and you can hang around as long as you want. You answer some e-mails and play a couple of games. There’s no pressure to spend any money, and the staff is happy to answer any question, even the most basic. Later on in the evening there’s a class on video editing at a small theater at the back of the store. The class is free.
Apple opened its first retail stores on May 19, 2001, in Glen-dale, California, and Tysons Corner Center in McLean, Virginia. What began as two has since grown into a thriving chain of more than two hundred stores and become the hottest thing in retail.
Apple’s chain of stores is the fastest-growing in retail history, reaching $1 billion in annual sales in just three years, besting the record previously held by The Gap. By spring 2006, the stores were making $1 billion every quarter.
The stores account for a big—and growing—chunk of Apple’s business, and are playing a key role in the company’s comeback. The growth of the stores coincided with the huge growth of the iPod. Customers went to the stores to check out the iPod, but stayed to play with the Macs—and sales of both took off.
The stores are insanely profitable. One Apple store can make as much money as six other stores in the same mall combined—and can pull in almost the same revenue as a big Best Buy store, but with only 10 percent of the floor space.
The stores are like high-end clothes boutiques. They are swish and stylish, selling a lifestyle, not a cheapo box. There is no pressure to spend, and the staff is friendly and helpful. The service makes all the difference. Apple’s stores are no-pressure hangouts where customers can play with the machines and leave without guilt, very unlike the cacophony and harsh lighting at the big-box retailers. There are no aggressive salespeople