Cook’s Plan: Grab iPhone Sales Share From Resellers

July 5, 2013

Even as Apple is reinforcing its image as a company trying to improve the human experience, Apple CEO Tim Cook has reportedly told retail store leaders he’s interested in more iPhone revenue, by taking sales away from resellers and bringing it to Apple’s own retail stores. As first reported by the 9to5Mac Web site, Cook’s remarks seem to contradict the company’s retail culture that focuses on excellent customer service and satisfaction, not profits. In fact, Apple’s last top retail executive, John Browett, was fired last October largely because he focused more on sales, market share and profits than customer service. But Cook’s three-hour talk to the retail team raises a bigger question about how the current number of stores and staffing levels will handle the millions of additional customers he wants to bring into the stores.

Specifically, Cook said that 80 percent of iPhones are now sold through other outlets, not in Apple’s stores. He said he’d like to see that figure reduced to 50 percent, alluding to a corresponding 30 percentage point increase in iPhone sales for the retail stores. Cook mentioned both price-matching and an iPhone trade-in program as possible incentives to bring more buyers to the stores.

Based on that figure, and assuming one-person, one-iPhone purchases, 7.5 million people bought an iPhone at an Apple store during Q2 2013. Under Cook’s plans, that figure would increase to 18.7 million iPhones, or more than double the latest figure.

On a per-store basis, the average number of visitors would increase from about 227,000 each quarter to 255,000, up about 12 percent.

Incidentally, Cook also revealed that 25 percent of Macs are sold through the retail stores, a sales figure that Apple just recently stopped providing during its quarterly financial conference calls. Based on that figure, the retail stores sold about 1 million Macs, in line with the figure that was last disclosed in Q4 2012.

The sources also said Cook and several other headquarters executives specifically told the group how critical the retail stores are to Apple’s success.

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