December 1, 2003

Apple: haute couture computers

Despite a small market share, Apple Computer has a fanatical following in Japan. Tokyo was the obvious choice for Apple’s first directly operated store outside the US, and Japanese from all over the country and even overseas flocked to see it open on 30 November. Managed right, Apple is set to become the computer equivalent of Louis Vuitton in Japan, and there’s no reason why it shouldn’t.

1pm on a wet, chilly Sunday afternoon and more than 2,500 people are queuing on Ginza’s main street. This was three hours after Apple Computer’s first directly operated store outside of the USA opened. Last year, with around 2,400 people waiting outside, Louis Vuitton opened its major Omotesando store, but now Apple has even outdone the king of brands—and by 1pm, only half of the first day’s vistors had been let in. The queue formed at 4pm the previous Friday (ironically led by a guy all the way from Berkeley, California), and expanded quickly throughout Friday night and Saturday. Although a little damp after two nights on the street, the new, aluminium wrapped store opened at 10am on Sunday with 5,500 people waiting to enter. Roll over Louis Vuitton, Hermes, and everyone else.

For many observers, such fanatical consumers seem symptomatic of Apple’s cult-like following mixed with the usual Japanese shopping fervor, but it actually means much, much more. Whereas computers are functional boxes for most people, with even Sony’s efforts at hardware design hampered by high pricing and a reputation for short model lifecycles and limited added value, Apple has made the step from office tool to designer brand. It is the design, implemented in the form, function and utility of its products which attract so many Japanese.

The world’s only fashionable computer company has been raising its profile in Japan. Its iPod MP3 player in particular has found a very strong following, doing more to woo Windows users than its computers ever did. Hundreds of those waiting outside the store were already wearing one, with even a few grannies happily jiving to their iPods. Apple has backed up this wave of popularity with TV advertising and in store events across the country. Although newspapers claim that a soon to be released Toshiba iPod copy could quickly overtake Apple in Japan, such reports overlook the popularity of the US company’s design and its head start in terms of branding as well as the software iTunes.

The new store has everything you’d expect from Apple. It is located directly opposite Matsuya, and, split over five floors, with sales space of about 1,000 sqm. It also has a number of world firsts for an Apple store. On the third floor, it has the largest store theater to date that will offer 420 training events catering to up to 30,000 attendees per month. Apple is also offering a repair service on all its products with a 48 hour guaranteed turnaround. A special training studio to teach usage of Apple hardware and related software has also been installed and is already booked up for professional training sessions until March 2004.

Even before the initial success of the Ginza store was confirmed, Apple announced it will open a second store in Osaka in the Fall of 2004 and is considering others in several major urban centers. It should now be considering bringing these plans forward rapidly. Apple clearly has the opportunity to position itself as the computer brand that all Japanese want to own.

It took Apple almost 10 years to overcome the barriers built by its initial partnership with Canon, but Japanese consumers more than any other choose by brand and design as much as function, and with the Apple Store as the vehicle, Apple has the opportunity to turn itself into the Louis Vuitton of computing. At present, the domestic manufacturer dominated market leaves it with only about 5% share, but no other company can touch Apple for that special star quality that consumers love so much. The opportunity is clearly there, it is up to Apple to grab it.

Copyright (c) JapanConsuming 2003.