After four years of promises to increase the number of retail stores in China, Apple has turned serious, announcing today that there will be 40 stores open in the country by mid-2016, an unprecedented level of expansion in any of the countries where Apple has stores. During a financial conference call today, CEO Tim Cook also announced that the next big step in retailing for Apple will arrive in April—the Apple Watch. But for the first time, the company didn’t separately report financial results for the retail stores, but rather lumped their revenue, profit and other metrics into other categories. Overall, the company set records in almost every financial category. In fact, the company’s record $18 billion profit was the most reported by any company in history for a single quarter. The China retail push stems partly from a desire to take advantage of dramatically increasing revenues in the country. For the latest quarter, Greater China revenues soared 70 percent compared to the previous year, fueled by sales of the iPhone 6 models. Apple has long-recognized China’s sales potential, and former Sr. VP retail Ron Johnson promised to double the number of stores back in 2010 to capture new revenue. Cook made a similar pledge last year, but only recently has the pace of store expansion increased. Five stores will open by the end of February, the company says, bringing the total to 20, and then the number of stores will double over the following 18 months. The rapid expansion has caused a hiring pinch in China, and Apple has recently begun recruiting staff from among its pool of existing U.S. store employees to move to China and fill empty positions. expansion index chart

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A new financial filing shows that Apple made extraordinary financial offers to Sr. VP Angela Ahrendts last year, hoping she would quit her job at Burberry, move back to the United States and take control of the company’s most visible operations, the on-line and retail stores. At the time, Apple says that Ahrendts was among the highest-paid executives in the UK, and so they assembled a combination of Apple stock grants, an annual salary and bonus, relocation expenses and even an unusual severance package to lure her to the company. Ahrendts joined Apple May 1, 2014 to provide the first-ever unified management of the retail and on-line stores. She was also the first woman on the company’s senior management team. According to the filing made yesterday with the U.S. Securities and Exchange Commission (SEC), Apple offered $33 million in “new hire” stock grants to “encourage Ms. Ahrendts to join the Company and to provide her with a meaningful equity stake in the Company.” Another $37 million in Apple stock grants were designated as “make whole” shares, to compensate Ahrendts for Burberry stock she held, but had not yet vested. The new-hire grants were based on Apple’s traditional performance metrics and vest over several years. The make-whole grants were structured using Burberry’s metrics in effect at the time. Ahrendts was also offered a $1 million annual salary, and a $500,000 “hire-on” bonus intended to offset some of the Burberry compensation she lost upon leaving that company. more details

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Apple will be opening four China retail stores in rapid succession over the next five weeks, according to the company’s Sr. vice-president for retail, including the West Lake (Hangzhou) store that is now covered with an expansive poem created by a noted calligraphy artist. Angela Ahrendts told China news agency Xinhua that the stores will open by Chinese New Year on February 19th, and will bring the total number of stores in the country to 20. A fifth store already opened January 10th at MixC Zhengzhou, while the West Lake store will open January 24th. Ahrendts said four of the stores are in brand new cities for Apple retail. In a rare interview since taking over on-line and store retail operations in October 2013, Ahrendts said the company’s biggest challenge for China retail is hiring enough employees, while maintaining the company’s customer service standards. She added that Apple has increased its service staff in Greater China (including Hong Kong) by 75 percent since 2012, bringing the number of retail employees there to 3,700. Ahrendts didn’t mention the locations of the other three stores that will open soon. However, IFO has confirmed add-on stores MixC Chongqing, Canton Road (Hong Kong) and MixC Hangzhou; and debut stores, Zhongjie Joy City (Shenyang), and Tianjin Joy City. Additional stores are planned for Nanjing Dalian and Guangzhou, sources say.

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A new display window appeared first at the Regent Street (London) Apple store shows a simple line-up of iPads set on a thin white counter. What makes the display so mesmerizing for passersby is how the Smart Covers open and close, all without any visible connection to a mechanical device. The video was taken at the Valley Fair Think “magnets.” read more…

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In a unique duplication of a high-profile store design, Apple is reusing the glass cylinder entrance architecture of the Pudong (Shanghai) store for the Guotai Plaza store now under construction in Chongqing (China). Last month workers dismantled the huge steel structure that has been covering the entrance for nearly the past year, revealing a 30-foot tall glass structure that will lead to the underground store. The entrance is set in a plaza and surrounded by tall buildings, a setting similar to the Pudong store, but on a smaller scale. The architecture was first revealed by IFO in July 2014. The city’s first Apple store opened last July, and a third store is under construction at the MixC shopping center, for a first-half grand opening. Update: The store is officially called Jiefangbei, and the grand opening is January 31st. The official graphic covering was unveiled on January 20th.
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The visuals teams at Apple’s retail stores are installing new wall graphics that extend a Web campaign that spotlights artistic applications for iPad, iPhone and Mac. While store graphics have frequently mirrored the design and colors of Apple’s Web pages, this seems to be the first time a specific promotional campaign has spanned both the Web and retail stores. In this case, the “Start something new” Web page appeared on-line in Japan last week, and has since been extended to apple.com in other countries. “Every piece in this gallery was created on an Apple product,” the promotion says, and then presents drawings, photographs and videos made using third-party apps and Apple’s own applications. The campaign continues Apple’s advertising focus on the result of using its products, rather than on the products themselves. photo

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In the face of a U.S. Supreme Court decision last week that employee security checks are not compensable activities, the plaintiffs in a lawsuit against Apple have told the court they will not oppose a motion to dismiss their federal claims for back pay. Instead, two former California retail store employees say they will continue to pursue their claims under state labor law, which doesn’t quite correspond with federal regulations. Dean Pelle and Amanda Frlekin filed their lawsuit in July 2013, saying they should have been paid for the time it took waiting for and conducting Apple-required “bag checks” whenever they left the store. The plaintiffs claimed they sometimes waited in line for up to 25 minutes at the end of a shift or at meal breaks. The lawsuit was certified for class action status earlier this year, meaning it could be applied to all of Apple’s retail store employees. In the meantime, a lawsuit filed by Amazon distribution center employees over the issue of security checks had been moving through the federal appellate courts. That case reached the Supreme Court earlier this year, and the court issued it’s ruling last week. In a brief (pdf) filed Monday in response to the Supreme Court decision, the plaintiffs in the Apple lawsuit said they will not oppose a dismissal request. Last week Apple filed its own brief (pdf) about the Supreme Court decision, pointing out how it applies to the Pelle-Frlekin lawsuit and arguing the federal case should be dismissed. The court has set a December 29th deadline for final briefs on the case, although Apple could file a formal petition for dismissal at any time. Update: On December 23rd U.S. District Court Judge William Alsup dismissed (pdf) the federal lawsuit in response to the brief filed by the plaintiffs, including the state claims in New York, Massachusetts and Ohio. He also consolidated the Kalin lawsuit into the Frlekin action. The judge set deadlines for further filings about a new consolidated lawsuit complaint requested by the plaintiffs.

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This year’s Apple store holiday window display focuses on the iPad and iPhone, and the “infinite” ways it can provide visuals and information. The display consists of three boxes on either side of the entrance at select Apple stores—not every store has the space or configuration to install window displays. Each box consists of a set of multi-color LEDs attached to the inside walls, and a mirror mounted at the rear. The reflection in the mirrors provides a doubling effect for the LEDs, and makes the iPad appear to be floating within a sea of light. The LEDs are programmed with various geometric and image displays that repeat over time. timelapse

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Despite the frequent re-use of architectural elements at Apple’s retail stores, there are some stores with unique features, and in one case a very surprising feature. Along the exterior stone wall of the New Haven (Conn.) store are mounted 12 steel shields representing the residential colleges of Yale University, which owns the Apple store property. No other store in the chain has such a feature or, in fact, any object attached to the store, either representing Apple or another company or institution. Yale University has an unusual structure: 12 small colleges with their own names and faculty, intended to provide the students with a small-school culture. Each college is represented by a distinctive, multi-color shield design. The Apple store shield versions were designed and created by Yale alumnus Jonathan Corum, a former student of legendary data visualizer Edward Tufte, and now science graphics editor at The New York Times. On a Web page describing the shields Corum wrote, “The challenge was to distill the designs down to one metal and one color: blackened steel on pale limestone.” They were mounted at eye level along the 64-foot long stone wall about two months after the store opened in 2011. They were positioned by age and name, with the oldest college at the front of the building, with room for new colleges towards the rear of the building. The shields and the adjacent walkway are visible through the large windows of the adjacent Yale bookstore. photo

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Scores of people protesting the death of a New York City man at the hands of police marched into the Fifth Avenue Apple retail store Friday night, walked around the store for several minutes, and then held a “die-in” to commemorate the man’s life. The visit, along with several others over the last four years, seems to signal a change in how protesters bring attention to their causes, using high-visibility Apple stores as their targets instead of taking direct political action. Over the past five years Apple’s stores have been visited by protesters representing labor unions, corporate tax objectors, advocates for minority hiring and  China factory working conditions, and even zombies. Friday’s protest was related to the recent deaths of men at the hands of police officers in several cities across the country, but specifically focused on a grand jury’s decision not to indict an officer in the death of Eric Garner last July. The protesters also visited several other retailers along Fifth Avenue during their march. read more…

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Job announcements for two new positions within Apple’s corporate retail team indicates the company is sharpening its focus on relationships with customers and employees, to include updating the existing Net Promoter and other survey programs. The position descriptions don’t provide any clues why Apple has become more interested in customer and employee feedback. However, employee discontent with wages and working conditions is well known, and customer complaints about Genius Bar wait times and obstacles to making purchases are documented daily on social media Web sites. The two positions were posted earlier this month—Customer and Employee Insights Leader, and Employee Feedback Research Analyst. Both positions are based at Apple’s headquarters in Cupertino. For the Leader position, Apple says, “The candidate will lead a team responsible for feedback design, collection, analysis, as well as reporting and insights for both the customer and the employee experience.” It mentions the existing Net Promoter Score (NPS) survey program, and then adds, “We aim to significantly update it.” The Leader will “work with stakeholders to develop a comprehensive vision & deployment plan for the new system and work to continuously refresh it (ongoing).” On the other hand, the Analyst position, “will have a hands-on, leadership role in maintaining and improving Apple Retail’s employee experience measurement system and program, based on the Net Promoter Score.” It describes Apple retail employees as “very passionate,” and a candidate “should be able to convey that deep enthusiasm with understandable, insightful and actionable information.” Both positions require significant education and experience. Download (pdf) the two job descriptions for more details.

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Even with 22 stores in the greater Los Angeles area, Apple’s retail team has been on the search for the perfect flagship store location for years, and now they may have found it. Incredibly, a tipster says the company has signed a lease for “several hundred thousand square-feet” of space inside the historic Broadway Trade Center in the city’s downtown, which lately has been blooming with redevelopments. The Downtown Examiner Web site says the leased space will constitute an Apple “campus” with offices, residential space and retail areas for both Apple and the newly-acquired Beats brand. The building dates to 1908 and was the May Department Store at one point. More recently the 1.1 million square-foot, five-story building has been occupied by dozens of small “swap meet” vendors on the ground-floor and light manufacturing on upper floors. The location may make sense for Apple—several other properties in the area have been refurbished and upgraded under a 10-year, public-private “Bringing Back Broadway” project to revitalize the downtown. There’s no timeline on when renovation on the building might begin or when the Apple facilities might be completed. photo

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It may be difficult to understand—or even believe—that there is close-knit employee culture beyond the shiny products on wood tables inside the Apple stores. But in fact, there is. The hiring, training and management of employees stresses a team structure, and tends to create a close group of workplace colleagues, if not outside-work friends. So when an employee decides to leave the job, it’s a significant event, if only because he/she is moving on to a higher-paying job. This video appeared on YouTube showing the last exit for an unnamed employee at the Rio Shopping (Spain) Apple retail store, and the resulting “clap-out.” Visitors to the store seem bemused, while the departing employee hugs his colleagues goodbye. It’s a common event at Apple stores around the world, but infrequently documented from beginning to end.

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Apple has taken the next step to merge its on-line and retail store customer support systems, apparently hoping to filter out unnecessary Genius Bar appointments for trivial and non-Apple problems, but without solving the on-going congestion caused by walk-ins without appointments. According to insiders, as much as 30 percent of store visitors are bound for the Genius Bar, where 350 appointments are managed daily at typical mid-sized stores. As outlined by 9to5Mac, under the new support system, when you visit the main “Support” Web page and navigate pages of advice and alternative methods of solution, you eventually land on a page that offers the choice “Visit the Genius Bar.” However, that choice is on the second row of options, beneath the “Recommended” option of “Send in for Service.” Selecting the “Visit…” option displays a map of nearby Apple retail stores. Once you select a store, you’re asked to log in to the Concierge reservation system using your Apple ID. The same support protocol is used when accessing the “Genius Bar” button directly on individual store Web pages. Since the retail stores first opened in 2001, millions more products have been sold and the Genius Bars have become a more popular destination. The debut of the iPod and iPhone in particular caused a huge spike in Genius Bar visits. As the number of appointment requests has increased, appointment slot times have decreased—there were no standard durations originally, then 15/20-minute times were set for mobile/desktop problems. About two years ago the slots were shortened to 10/15-minutes to create more slots. Even so, there are never enough slots to accommodate both those who made appointments and those who have not. screen shot

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A French government privacy agency has warned Apple to adjust the video surveillance systems at four of its retail stores, saying they are too intrusive by constantly watching employees beyond the public retail space. The Commission nationale de l’informatique et des libertés (CNIL) said if the company doesn’t comply, it could be subject to fines. The involved stores are Opéra, Rosney 2, Bordeaux and Parly 2 stores. Every Apple store around the world has a video surveillance system to protect the company’s assets and employees. The systems routinely cover the front-of-house space accessible to the public, but also the Genius Rooms, hallways, product stockrooms and other back-of-house areas. In the U.S., federal law generally allows video surveillance of employees, except in restrooms or other private spaces. However, most European countries strictly regulate the permissible extent of workplace video surveillance. In this case, the CNIL said, “Surveillance is carried out disproportionately to the purpose of preventing harm to people and property,” and called it “an affront to privacy.” They ordered that the cameras be repositioned, or the video framing be masked to provide sufficient employee privacy. In addition, employees should be instructed as to which areas are monitored and which are not. The commission made a similar finding about the surveillance system at the Louvre store in 2013, and the store’s cameras were adjusted. Download (pdf) the commission’s decision (en français).

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