The Changing Face of Capitalism: Schizophrenia in the Apple Store

The other day I was in one of the Apple Stores. The hinge had broken on my MacBook Air, which meant the top of the computer, the screen part, had to be replaced. It was to be done for free, which I love about Apple.

The store was crowded; I asked the young lady salesperson if using my Mac ProCare card would move things along. She looked at my card, told me it was out of date, and offered to go update it.

When she came back, she was apologetic. “The thing is,” she stammered, “I think they’re kind of going to be de-emphasizing the ProCare program.”

“Huh?” I said. “Is it continuing, or not?”

“Well, I think they’re maybe going to be phasing it out,” she squirmed.

“As of when is it phasing out?” I asked, “ and is there a replacement program? I just want to know how to get premium service.”

“Well, I think they’ve already stopped it, really,” she stammered. This was getting nowhere fast.

Fortunately, the store manager came by and took over; he assured me I’d get the repaired computer by day’s end (which I did, by the way).  I asked him, “What’s up with the ProCare program?”

“Oh,” he said, “we’re discontinuing it.”

“Why?”

“Well, it was so popular that everyone was buying it, and then you have a problem with, like, who do you let at the head of the line, and who do you have to say no to, and all that sort of hassle.”

This boggled my mind. “Why not just raise the price?” I asked.

He laughed. “You know, several other people have suggested that too.”

“Well no wonder they have,” I said. “If everybody wants something at one price, raise the price—you make more money, and it very easily sorts out to whom it’s worth more and to whom it isn’t.”

“Yeah, but it’s kind of unfair that way too, you know,” he said, in a ‘you clearly don’t get it, do you’ sort of a way. And I left, bemused again at the curious mix of capitalism and west-coast do-goodism that is Apple Computer.

No company is better at in-your-face planned obsolescence than Apple; just trying getting a replacement battery for an iPod. No company is better at aggressive pricing; and how many mature companies can claim a stock price growth of ten fold in five years?

All this, in spite of echoes of PC (not the computer) instincts and shades of tie-dyed Deadhead ethos in the stores. Or, is it because of said instincts and ethos?

Changing Ideologies in Business: From Competitive Capitalism to Collaborative Capitalism

Then again, why should Apple be unique in its schizophrenia about capitalism? Business in general is in the midst of a paradigm shift in business, away from shareholder-centricity toward stakeholder-centricity. An excellent article in the Economist  summarizes this ideological shift, citing several current business thinkers.

Business, I think, is undergoing some serious foment with respect to some very fundamental beliefs. Milton Friedman, Michael Porter, Michael Jensen—these are the thought leaders of the past, championing neo-classical economics, the purification of competition, and the primacy of shareholder wealth respectively.

The new thought leaders remain to be definitively enumerated, but the issues are emerging. They rhyme with collaboration, trust, networking, flat organizations, and Gen Y. To name a few.

Stay tuned, it’s getting interesting. And Steve Jobs may end up, once again, looking pretty prescient.