Apple’s special event yesterday not only introduced two new iPhone models, but it also signaled subtle changes for the company’s retail chain that will put more pressure on already crowded stores and harried employees. Apple CEO Tim Cook also provided some information about the company’s newest Stanford 2 (N. Calif.) retail store, demonstrating how desperately it was needed. Traditionally, Cook’s presentations begin with an update on the retail stores—but not this time. Cook came on-stage at Apple’s headquarters with a mention of this month’s iTunes Festival in London, followed by a video of the event. Only then did he turn to retail, telling the audience, “This month we have a lot of excitement in retail.” But it was what Cook did not mention that will affect the stores. First, the new iPhone 5s will not go on-sale before it’s available in the retail stores. As a result, the new model won’t be delivered via FedEx to buyers on the day of release, a traditional service. The change in sales timing means that everyone who wants an iPhone 5s on Day One will have to appear—in a long line—at a retail store. The nearly-simultaneous upgrade to iOS 7 could also complicate iPhone 5s set-up, at the same time that older iPhone owners are arriving with upgrade problems of their own.
Next, an unannounced AppleCare+ change could increase the workload of employees. The cost of AppleCare+ accidental damage for the iPhone has been increased from $49 to $79 per incident. The move was either sparked by accountants who discovered the service wasn’t covering expenses, or simply by a desire to increase revenues from the service. The “plus” version of AppleCare was introduced in October 2011 to cover accidental damage to iPhones, an extension of the standard two-year AppleCare warranty service. Lastly, AppleCare+ is no longer available for purchase upon the first case of physical damage. Previously, employees could bend the rules, and allow a customer to immediately become covered by AppleCare+. Apple also slightly increased the cost of an out-of-warranty replacement iPhone 5, from $229 to $269.
During his mention of the retail stores, Cook said, “As you know, we’ve been expanding our footprint outside the United States. But this month, our attention turns home.” He showed a photo of the original Stanford mini-store, and said it covered 1,100 square-feet. Only about 360 square-feet of that space is devoted to public retail, however. “Despite the size of it, our teams have served five million customers there in just nine years,” Cook said, or an average of 1,537 people a day. Incredibly, Cook added, “They’ve recently been serving 2,000 per day in this space.”
Cook said the original Stanford mini-store had been “long overdue” for an expansion, and then showed a photo of the larger store that opened last Saturday, drawing gasps and applause from the media attendees. Cook called the design an “architectural marvel,” and said the new store was eight times larger than the older store. He urged the audience to “drop by after today’s event.”
Watch the retail-related portion of Tim Cook’s presentation here.E-mail this story