Alan Clayton's first bite of Apple Inc. was enough to hook him, but recently his addiction to the world's most popular computer brand has caused a bit of indigestion.
"I'm a day-one guy," says Clayton, an early adopter even among early adopters. Nearly 25 years ago, he notes, "I was among the 10 people who got the first 10 [Macintosh computers] … in Richmond."
That first computer became an integral part of the accounting system at Clayton's sandwich shop, but it also became the germ of a bigger idea, and eventually led him to open MacPro Solutions Inc., an Apple consumer retail and service store on West Broad Street. "I've continuously had an Apple computer since that day," he says.
Still, he sees Apple's devotion to his store and other third-party retailers as something unpredictable that waxes and wanes.
"It's in and out," Clayton says. "There are times in the relationship when Apple has been very good to their retailers, and there are times when perhaps they haven't thought through the ramifications of their actions."
The display shelves at Clayton's two stores — he has another location in Charlottesville — are proof that Apple's devotion is currently waning.
His shop is allowed to service some iPods, the company's ubiquitous handheld music and video players, and they sell all manner of cases, plugs and headsets for the devices. But it's what they don't sell — the company's multi-million-seller iPhone and the newest hot item, the iPad — that explains why MacPro Solutions spends most of its days servicing business clients and their desktop and laptop computers, most of which are beyond their warranties.
"It used to be that people bought their Apple computers from a local business," says Clayton, who watched with trepidation as Apple opened its own branded retail store at Short Pump Town Center a few years ago. "That's now the principal way people are buying their computers. ... In fact, we get almost half of our customers [as service referrals] from the Apple store."
Since its launch, Apple has always been something of a boutique computer among desktop and home computer users. PC computers, with lower prices and with operating systems and software from industry giant Microsoft, have long dominated the market; PCs are the Ford Motor Corp. of the computer world.
Meanwhile, for much of its history, Apple has operated in the margins — like the Saab or Volvo of computer sales — carving out its market share among devotees and clients involved in education.
As recently as 2006, Apple's worldwide market share was 2.4 percent, compared with its current 10 percent. That market share rises to 21 percent when calculating only U.S. sales.
Through it all, loyal users like Clayton and Dheeraj Vasishta — owner of Richmond's other Apple third-party retailer, Capitol Mac on West Main Street — have kept the faith and helped preserve the mythology of Apple and its founder, Steve Jobs.
They stuck by the company even in the late 1990s, when Apple was briefly threatened with corporate ruin. Faced with a $1 billion supply-side backlog and insufficient capital, Apple seemed unlikely to survive, with Microsoft founder Bill Gates talking publicly about bailing out his one-time rival. In its February 1996 issue, Fortune Magazine published a preemptive obituary: "By the time you read this story, the quirky cult company … will end its wild ride as an independent enterprise."
Which is why it might be expected that now, with Apple at the height of its business might — having gripped the major share of the personal music player and smart phone market, and having single-handedly revived the tablet market — that Clayton and Vasishta would be riding the wave of consumer interest.
Multiple messages left with Apple's public-relations office were not returned by press time. Both Vasishta and Clayton say Apple's explanation of why they've been kept out of the loop on hot items like the iPhone and iPad have varied. Neither store is able to write the AT&T cell phone contracts necessary for iPhones, and Apple contends that demand for the iPad is sufficient to concentrate its supply with larger retailers, like Best Buy, Walmart and its own corporate stores.
Neither Clayton nor Vasishta say their businesses are hurting, but both acknowledge that Apple's unwillingness to allow them to sell iPhones and iPads has kicked them off the surfboard.
"It's more how we look to the public," says Vasishta, who bought the 20-year-old Capitol Mac store this past November. "It doesn't hurt us in terms of the bottom line. We're doing better year-over-year from last year. But it's a little painful."
When customers come looking for the first-run products, Vashishta has to send them to the Apple store in Short Pump.
It could be worse, though.
Kenneth Brown is a Washington-based retail analyst and president of Research Connect Inc., and says that Apple, despite the long history between the company and loyalists like Clayton and Vasishta, owes its smaller retailers nothing.
"Apple is making, from what I see, a business decision to have flagship stores in locations where they can reach the masses," Brown says, noting that all is fair in love, war and business. "It's not a question, in my opinion, of whether these small stores are devoted to Apple. It's a question of whether these small stores can give them a footprint in the market."
Clayton and Vasishta say they have to agree with Brown and even see bright spots to being left out of Apple's big boom time.
"I think Apple is not having any trouble selling this product," Clayton says of the iPad. "They can't make them fast enough. They've been in that situation for the past 10 years.
"What an envious position to be in. They don't need me, that's certainly true. But the amount of effort they spend on me is certainly better than the resource spent on, [say], another device or another product. They give us more."
And sometimes more comes from getting less, agrees Vasishta.
"It's all not bad not having the iPad and iPhone, because [the market for those items] is more general public," he says.
He views his own market as desktop computer users, students and the business clients who need many computers networked and maintained. "Overall, the general public is not as sophisticated as the typical Apple [computer] user."
Brown suggests that business owners probably needn't be nervous, since Capital Mac's and MacPro's client bases likely will still be around long after the iPhone has been replaced by the next big gadget fad.
"The nerds are going to keep Apple going," Brown says, who views Apple as keeping these smaller retailers afloat. "What they should be doing is maybe say, ‘Hey, we test-market [some] products with the local retailers rather than go through the major market retailers.' That to me is logical because there's no risk to whether they sell a lot or not. Heck, [the stores have] been loyal, and it would be a good way to increase their foot traffic."
Clayton likes that logic, too.
"I like to look at it as rising tides raise all ships," says Clayton, who, despite lamenting the loss of potential sales on Apple's most popular products, is still about to expand his operations with a new location on South Side. "I do a lot of repair and service work."
And yet, he says, the tide would be higher if they were closer to the source: "We're certainly on a tributary."
