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Commentary: The stores were too big in a too-competitive sector
By John C. Dvorak

BERKELEY, Calif. (MarketWatch) -- I was saddened by the timeline announced for shutting down CompUSA, but wasn't in the least surprised.

As I have said in columns here and elsewhere, the idea of a computer megastore working is sketchy. Investors in Apple Inc. (AAPL:

The problems are obvious to anyone who visits big computer stores. It begins with the fact that the sector is highly technical, and these vendors cannot afford to hire people who can sell intelligently.

But it goes beyond that. Here's my list of issues:

1. The perpetual-depression nature of the business. In other words, once the product hits the shelf, it begins to deflate in value. The deflation stems from the rate of change within the industry, and affects most products.

2. Impossible to satisfy customers. I have been to CompUSA dozens of times and rarely found what I needed. The store cannot carry enough weird cables or esoteric tanks of printer ink; no one can.

3. Competing with the Internet. Most savvy computer users shop for much of their hardware online. The Net works like a mall in a way that makes it hard to compete. Say you have some random item you need to find. A search engine will locate the one merchant that has it.

4. The stores are creepy. CompUSA typically had guards checking you at the exits to see if you stole anything. This always seemed a bit odd to me.

5.Other big-box outlets carry the commodities. Office Depot Inc. (ODP:
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6. I usually could get the same things at RadioShack without a hassle.

7. The stores were too big.

It's the last lament that has me concerned about Apple. The company is the first PC maker since Altair in the late 1970s to do the computer store correctly.
This means opening a lot of small territorial sites, with a selection of everything within the product line. My concern is that the Apple stores are getting too big.