ONE OF the most curious – and telling – juxtapositions in Silicon Valley occurs, rather unexpectedly, in Palo Alto’s upscale Stanford Shopping Centre. Stroll about halfway down the lushly planted outdoor walkways and you come to what might just be the smallest Apple Store on the planet.
Here in the home territory of late Apple co-founder Steve Jobs sits a nano-sized Apple Store, about the square footage of the sitting room in a typical Dublin two-up, two-down. The only signage outside is the Apple logo, glowing on a white background.
Three narrow counters display the iconic product triumvirate of iPod, iPhone and iPad, as well as those tasteful matte aluminium laptops and iMacs. Squeezed along the back walls is a limited selection of software and accessories.
The shop is so small, they’ve eschewed a sales desk entirely. Instead, roving helpers run your transaction through a handheld device and deliver your purchase in a white Apple-logo carrier bag.
This mini Apple Store is almost always crowded but, at the weekend, it’s a retail sardine tin.
Turn right as you exit the store and directly alongside is a shopfront four or five times its size. This place, too, bears no name – only a symbol comprising four scribbled primary-coloured rectangles. Unless you’re a geek, you probably won’t recognise it as the latest redesign of the Microsoft Windows logo.
The shopfloor inside is vast, offering a huge array of devices that run on one or another form of the Windows operating system, appealingly displayed. People wander here and there, stopping to play with items that catch their eye. But in this gigantic space, there is not even half the number of prospective buyers that elbow around next door.
Microsoft certainly showed unabashed impudence in deciding that, out of all the retail space in the shopping centre, they would snag the slot alongside Apple.
And you can’t help but feel there’s also a deliberate show of might, a flaunting of floorspace that still accurately reflects the hyper-dominant market share for Windows – at least on fully fledged computers, where it still runs on about 85-90 per cent of machines (depending on your statistics source).
But the contrast between the modest patronage of the mammoth Windows store, the largest electronics shop in the shopping centre (larger too than Apple’s main store a stone’s throw away on University Avenue in Palo Alto proper), and its overstuffed little neighbour says everything about whose star is in the ascendant these days, and where the profits lie (in fewer products with vastly greater margins).
One fact sums it up: Apple now pockets more from iPhone sales alone than Microsoft takes from the entirety of its business.
For those of us who were computer users from the late 1980s onwards, this is a scenario unimaginable to all but the most desperately ardent Mac fanatic back then, in the bleak years when Apple shrivelled and struggled to remain relevant, much less financially viable.
Now the tables are turned, and the contrast between the little Apple store and the massive Windows edifice verges on the ironically comical – technology’s David and Goliath.
How it came to be this way will no doubt be the stuff of future MBA case studies. But you can read an initial attempt in a brutal article in Vanity Fair this month ( iti.ms/Ne7kFl) that tries to explain why most of us reach for iPhones and iPods, not Windows smartphones or Zunes (it lays the primary blame on Bill Gates's successor Steve Ballmer).
On the flip side, Apple and Steve Jobs adoration, particularly after Jobs’s death, often crosses into the ridiculous. The break-in last week at Jobs’s Palo Alto home, for example, received feverish coverage from Silicon Valley media, dwelling particularly on the fact that the thief took Jobs’s wallet, found to contain just a single dollar bill (coincidentally, the exact amount of Jobs’s annual salary at Apple).
Indignation culminated in a headline in the Palo Alto freesheet the Daily News that had my mother in gales of laughter: “Not a burglary; an attack on a Palo Alto shrine”.
The article was actually more measured than the headline implies, and my mother’s mirth was due, at least in part, to the fact that she knows the (large but not massive) house, and the previous owner, who sold it to Jobs. But still.
Nonetheless, you can’t quite imagine similar emotional outrage over a burglary at Bill Gates’s palatial compound further north in Washington state. And there we go again. Big, small.
Except when it comes to market cap. Apple this week became the most valuable company in history, with market capitalisation spiking well over $600 billion. The only other company to touch $600 billion was . . . Microsoft, once upon a time.
No more. On the same day this week that Apple hit $623 billion, Microsoft was less than half that value, at $257 billion. That Microsoft store is going to have to sell an awful lot of product to catch up.
