Apple, MacWorld and Steve Jobs – the Wal-Mart Connection
Bentonville stands in the northwest corner of Arkansas only a few miles from Missouri, Kansas and Oklahoma. It is a little city in the Ozarks with a fine town square where once there stood a Ben Franklin variety store owned by Sam Walton. Today, that store on the square is a museum, and Bentonville is the headquarters of Wal-Mart, not just the biggest retailer in the world, the biggest COMPANY in the world. There is nothing fancy about Wal-Mart, and that certainly applies to its corporate headquarters, a nondescript brick building where every day suppliers from around the world come to peddle their wares. The place where would-be suppliers meet Wal-Mart buyers looks like an old Quonset hut from World War II. The hut is filled with folding chairs and metal tables where the meetings are held. This, with no exceptions, is how business is done, and that Quonset hut explains exactly why Wal-Mart is bigger than all its competitors and strikes fear in smaller retailers the world over.
Wal-Mart is a pure example of keeping transaction costs low as exemplified by the modest global HQ and the Quonset hut meetings with suppliers. But it’s what goes on during those supplier meetings that is even more important, because Wal-Mart buyers are notorious for demanding product design and packaging changes from suppliers — changes that are usually more intended to lower costs than to increase customer appeal. As long as Wal-Mart buys more from a supplier than any of its competitors does, Wal-Mart will get the best prices, which can be converted into the most sales, the most profits or the highest market share, depending on what Wal-Mart values at that time. So if you can keep transaction costs down, bigger is better, way better. Since the playing field is never truly level for this reason, Wal-Mart will always have an advantage, and small town retailers will always be threatened. There is nothing illegal about this, either. There is nothing illegal about being big.
Which brings us to this week’s surprise announcement that Steve Jobs would not be giving the Apple keynote at MacWorld next month. And in fact Apple won’t be participating in future MacWorld shows AT ALL. Isn’t this a trend? As I recall Apple pulled out of European MacWorld events years ago. They see the future of product introductions generally done online and at Apple HQ and they don’t care at all about third-party vendors.
But given that Apple is contractually obligated to participate in one final January show, why isn’t Steve Jobs doing the honors? It isn’t because of his health. I blame Wal-Mart.
A reader from Arizona just reported to be seeing an iPhone sales display being unpacked in the back room at his local Wal-Mart. Wal-Mart is going to start selling iPhones after Christmas.
Now this is just a guess, but if Wal-Mart is about to start selling iPhones, then given the nature of their vendor relations typified by that quonset hut, they’ll demand Steve Jobs come to them – perhaps even to Bentonville – for whatever iPhone launch event Wal-Mart plans.
Steve paces himself. There is no way he’ll do two product intros in one month. And I doubt Wal-Mart would allow him to in any case.
We’ll just have to see what happens.
Thanks
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