Apple's other wireless revolution

Few would argue that the iPhone has been a phenomenal success by most standards of measurement - an achievement all the more astounding considering that a year ago, Apple enjoyed a handset market share of zero. Twelve months later, consumers are waiting for the iPhone 2.0 with bated breath - a level of interest so intense that apparently, queues have reportedly been forming outside certain Apple stores even though there has been no confirmation that the 3G version of the phone exists, let alone when it might be coming to market.

What is most impressive - and the envy of all Apple's competitors - is that all this hype and frenzied anticipation has been carefully orchestrated by Apple without spending a single marketing dollar.

With less fanfare, the company has been racking up another wireless success outside the handset arena. It underpin Apple's strategy of becoming a dominant force across the consumer electronics market by creating a virtuous circle of products - from computers to phones and media centres to music players - which lock consumers into the Apple experience by exploiting the company's strengths in branding, style and retail.

Earlier this month, market research firm NPD Group reported that Apple's AirPort Extreme has become the top-selling 802.11n wireless router in the US market, trumping established networking brands like Linksys (Cisco), D-Link and NETGEAR. Combined with sales of the Apple's AirPort Express - a Wi-Fi access point - Apple took fourth place in overall 802.11n base station sales.

This is a significant achievement in its own right, but the most important take-away is this: while Apple holds about 6% of the US computer market (it's global market share is much lower, at around 3%), it presently controls 11% of the 802.11n base station market, indicating that many sales of these wireless networking products are going to non-Mac users - PC - users.

The 802.11 protocol is an IEEE standard so access points will be compatible with any computer, regardless of whether it's a Mac or PC. This begs the questions: why would a PC user want an Apple access point when there are a variety of devices from a host of established PC networking brands to choose from‾ One reason is effectively summarised by the images below, which show an 802.11n router from Linksys alongside the Airport Extreme.

Whatever creature designed the Linksys device, it certainly wasn't human. Sure, 802.11n supports multiple antenna technology, but do we really want to see all of them‾ There are not many consumers who want to erect something resembling a miniature air-traffic control tower in their living room.

Apple, on the other hand, intuitively understands aesthetics. The company continues to exploit design and styling, turning technology products into desirable appliances which users, far from wanting to hide them within the recesses of their homes, positively want to show them off.

Aesthetics, combined with the strength of the Apple brand, are two reasons the company is able to sell wireless equipment to non-Mac owners. A third and equally important factor is the retail experience. Anyone who's ever walked into an Apple store knows that it triggers several emotions, but technology overload is not one of them.

 

For the majority of consumers who know what they want to do, but have a limited understanding of the device or technology that will help them do it, the Apple store is a friendly oasis which does not intimidate.

According to NPD Group's analyst, Stephen Baker, Apple's retail and online stores are driving the sales of the AirPorts products. "This stuff is just flying off the shelf in the Apple stores. They don't get nearly enough credit for the value proposition that the stores bring," Baker told Macworld.

There are routers and access points available with equivalent specifications to the AirPort range but at substantially lower price points. By delivering on the brand, styling and retail experience Apple is able to command a significant premium. More importantly, however, once a consumer has been "˜touched' by the Apple experience, regardless of the product, there is a likelihood that they will look to Apple when purchasing their next technology item. The sale of a US$200 (€128) wireless router may at some point convert into the purchase of a US$2,000 (€1,280) Macbook.

This is the cornerstone of Apple's ambitions in the handset market. Owing to its ubiquity, the mobile phone represents a volume of touch points that no other device category can match. Even if only a fraction of iPhone owners convert to Apple in other product areas, the reward is considerable.

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