. Last Updated: 07/27/2016

Apple's High-End Focus Fits the Russian Reality

Faced with some tough financial decisions last week, Apple Computer Inc. announced it was trimming its range of cheaper, low-margin computers to focus on its more profitable, high-margin models. By concentrating on what the company terms its "best of class" products, Apple is focussing resources on its traditionally strong vertical markets in graphics, publishing and education. This may be sad news for legions of Mac fans in the United States, but in Russia, it is what Apple should have been doing all along.

If you ask any Russian graphics designer which computer he uses, chances are he will look at you askance and say, "Apple, of course." Yet if you were to interview 100 Russian computer users at random, you would be lucky to find one Apple Macintosh user.

Though Apple computers are mass-market products in the United States, in Russia they are niche products used mostly in media-related industries. Apple has long been the first choice worldwide for most users in publishing, graphics and design. But fearing that its products could end up as a "ghetto" technology catering only to these core users, Apple has been waging a marketing offensive over the past two years to sustain itself as a mainstream competitor to makers of personal computers, or PCs, based on Intel microprocessors. Secure in the knowledge that its own dedicated users would stay with Macs, Apple aimed to build its market share by making converts. A major thrust of Apple's marketing has been to persuade the world's non-Apple users, especially in business, to ditch their PCs to take advantage of the Apple Mac's ease of use.

It is common in the computer industry for the best technologies to be marginalized when others become a standard. The Macintosh Operating System is widely regarded as more flexible and easier to use than its PC counterpart, MS Windows 3.1. All the hype about Microsoft's new Windows 95 operating system has not impressed Mac users, who say they have enjoyed many of its trumpeted new features for years.

Though Apple succeeded in increasing sales, a string of poor financial results and now a retreat into the higher reaches of its product lines suggest that the strategy failed. Profit margins on lower-price PCs are now so minimal that Apple was unable to make its mass market models inexpensive enough. Media are now awash with rumors that Apple may be a takeover target.

If maintaining Apple as a mass market technology in the United States has been a desperate struggle, in Russia the strategy was doomed before it began.

Though everyone who used computers in Russia was already very knowledgeable about PCs by the start of the 1990s, the Apple Mac had only a limited following. In addition to the problem of having to build a brand reputation from scratch, Apple computers also require proprietary components. A great asset of the PC is that it is entirely composed of industry standard parts. In a country where buying what you need has always been a problem, PCs are easy to fix. Apple Mac parts are harder to find, making repairs or upgrades more difficult if you lack easy access to a well-stocked Apple dealer.

Following Apple Computer Inc.'s strategic about-face, Apple Computer CIS will almost inevitably follow suit. I am sure that the attack on the Russian mass market will be quietly forgotten. In the West, Apple was forced to retreat when it failed to win enough new ground in its battle against the PC; in Russia, PC dealers never noticed that a battle was on.

Robert Farish is the editor of Computer Business Russia. Internet e-mail: farish@sovam.com, fax: 198 62 07