There’s a conference called Techonomy going on right now and some panelists were asked which big tech co was the most vulnerable. My favorite part was this bit on Apple:
Apple’s stores could become a big weakness, too, Ellison said. Sure, they’re a “tremendous advantage” now, but Ellison said IBM had a similar network of stores, which “became an albatross in the ’90s.” To reinforce his point, he asked the audience if anyone had set foot in a Disney store recently, and no one raised their hands, but he said that that question would have gotten a very different answer a decade ago. Apple could follow a similar pattern, Ellison argued. If its product momentum slows, the stores could become a big drain rather than an asset. (via Who’s Vulnerable Among the Internet’s ‘Fantastic Four’? Techonomy Panelists Say It’s Apple And Facebook | TechCrunch.)
Owning your own distribution by building stores is great when you have a hot product because it builds more leverage in your value chain. However, that leverage can come back to bite you in the ass if your product begins to stumble.
What would Apple do when it gets to that point? Can you imagine the day that Apple has to start selling Microsoft and Google devices in their stores? Or do you think they’d just shut down their stores?