Apple Thinks Without the Box
Apple unveiled its new OS X Lion yesterday to largely positive, if not spectacular, reviews. Among the new developments of the new operating system was the box it comes in — there isn’t one.
In fact, Apple seems to be taking this whole packaging reduction idea very seriously. The company, according to a number of reports, has sent a notice to all its resellers that it is discontinuing boxed versions of a number of software titles, including Aperture, iLife, iWork and Snow Leopard. The software titles will only be available through the Mac App Store.
The decision to not sell boxed versions isn’t a complete surprise. Back in February, MacRumors reported, "Apple is planning on making the move to all digital sooner than expected at their retail stores. Apple is working towards eliminating boxed software and presumably focusing sales through the Mac App Store."
At this juncture, it’s not fully clear how other software makers who produce boxed product will be affected in Apple Store locations.
According to AppleInsider, "Apple also moved this year to drastically reduce the number of games made available at its stores, whittling the number down from 32 to eight. Customers are instead advised that they can download titles for Mac OS X from the Mac App Store."
Discussion Questions
Discussion Questions: What do you make of Apple’s action to get rid of boxes and move software sales to its App stores? What will this mean for consumers, competitors and companies that make software for Apple hardware products?
Honestly, I’m surprised it’s taken this long.
For Mac users who are used to going to the App Store, I doubt this will make a big difference although it might mean less traffic into the brick and mortar stores.
Disclaimer: I am a non-Mac user although I do have an iPod. I am in the process of replacing both my laptop and desktop PCs so have been reloading or buying a lot of software. I admit I much prefer having boxed software rather than just downloads. Found it much easier to simply go to where the software is stored in our offices, take the box back to my office, and load from a disk. I didn’t have to contact someone on the web or by phone, explain why I needed to reload the software, etc. When I purchased new software to replace older versions of Office, Visio, etc., I ordered the box versions. Perhaps it’s just me but I like knowing the software is in house and should I need to, I can reload it again with having to contact someone.
In other news, General Motors is discontinuing its line of horse buggies. Seriously, this move is WAY overdue. The only news here is that Apple previously did not have the cloud capacity to do this. It’s no secret that Apple has been building at least one enormous data center which will power its next wave of cloud offers (aka “cut the wire”). Packaged software is walking dead.
I like the concept of doing away with boxes and software disks. It saves money, and with a $29.99 price point, Apple seems to be passing those savings on to consumers.
Apple is moving towards an all app world, where everything one needs for an Apple device can be found in the cloud. In turn, consumers can store all of their relevant data in the cloud. Apple has the experience of half a million apps to pull this off. If they can deliver a seamless, trouble-free consumer experience, this will be the way of the future for all software companies.
Apple again is thinking well outside the box. They continue to stretch the boundaries.
This whole thing ties together with an article I read this week about Verizon Wireless. Despite an over 300% increase in revenue, Verizon Wireless is employing fewer people than it did 7 years ago. The number of call centers has declined from over 100 to 74. Customers are more familiar with the products and sales are being made over the Internet. Phones with simpler operating systems (i.e. android) have reduced the support calls.
Apple has always been on the forefront of “virtualization.” Their privatization of the “iDevice” supply chain has enabled them to construct toll charges at both ends of channel. While reducing packaging costs has a laudable environmental effect, think about the impact of this savings on the larger economy. Everyone from package designers, printers, fulfillment centers, even the recyclers who collect cardboard will require fewer employees. As more of the economy becomes virtual and requires fewer workers to generate revenue, who is going to be able buy the output it generates?
This has a huge impact on the traditional role of retailers. Historically, retailers have been the “last stop” along the supply channel to the final consumer. If the consumer can now log onto the Internet to obtain products directly, why do they need retailers? Worse yet, for a virtual product with no “touch and feel” aspect many of the retailer’s non-economic advantages such as impulse buying and instant gratification disappear. The naysayers (of which I have always been a member) will say “people will always want to squeeze the grapes.” I am starting to have my doubts.
Inevitable. Just as the physical sales of CDs and DVDs have declined precipitously with retail outlets, so too will the sales of boxed software.
The spectacular growth and convenience of “apps” on demand have shown how quickly consumers switch to more convenient methods of purchasing software.
The question about how this impacts consumers, competitors and suppliers goes beyond just Apple, it will resonate throughout the industry as more companies find download sales of software/games much more profitable than selling through retail channels.
It will be interesting to see if retailers like Walmart and Target seek to offset these potential losses and to consider how they might accomplish this.
Given their customer base along with their redefinition of themselves as a media company, this move is completely predictable.
Another big step forward for this game changer. Building the Apple community is a major marketing strategy, so this makes good sense. Finding new ways to reach directly to the shopper will be a big part of their play book. Now, for the consumers, there may be some concerns about apps only, but good consumer experience is critical to succeed if this is their intended path.