Apple is still evaluating the results of a sales trial with electronics retailer Best Buy, and is considering a pilot with Circuit City to sell Apple products, according to chief operating officer Tim Cook, speaking at a technology symposium. Cook answered questions previously submitted by the audience for about an hour, but barely touched on the retail operation during a session at the Goldman Sachs Technology Symposium in Las Vegas. “We are thrilled with the retail stores. We could not be happier,” Cook told the crowd. He said Apple would open 35 to 40 stores this fiscal year, and confirmed for the first time future stores in Rome (Italy) and Sydney (Australia).
Cook said the pilot program with Best Buy was a success, and it was expanded from a handful of stores to 50. Apple is now evaluating that trial to decided how to proceed. Cook would only say that Apple is evaluating the possibility of a sales agreement with Circuit City.
In response to a question about the slower sales growth at the retail stores in the latest quarter, Cook said the Apple was focusing its energy on the “broader channel” by working with resellers more closely, and keeping them stocked. That process shifted revenue from the Apple stores to the channel, he explained.
He likened the situation to when Apple announced the transition to Intel microprocessors: In all but one of the last nine quarters Mac sales increased faster than the overall market. That one lagging quarter surrounded the announcement of the transition to Intel. Apple wanted to complete the transition “very, very quickly,” he said. So instead of optimizing operations to increase store revenues by selling Power Macs, Apple instead used the stores to push the Intel transition, resulting in fewer Mac sales in the quarter.
As for adding other points of sale, Cook said, “It’s interesting to think about expanding now.” But he said the company is interested in “quality points of sale.”
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I’m holding out for non-Apple Store retail support of Apple products. My last experience with Apple Store was onerous to the extent that I will never buy from Apple Store again. I made an online purchase of an Apple gift card in advance of my son visiting from his army base in Afghanistan. My son very much wanted to buy an iPod before returning to his base and he had little time on his visit. The day after ordering the product, I discovered that the card would likely not arrive until after my son departed again. I called Apple and they confirmed that the card had not shipped, but refused to 1) supervise an expedited shipping, 2) cancel the purchaser and credit my credit card, or 2) send credit to a local brick and mortar Apple Store so that my son could pick up the iPod in person. Despite explaining the nature of my son’s situation, Apple responded with “no, no, and NO”. I never so much wanted to crawl through a phone line in my life. Take my advise….buy Apple products from CompUSA, MacWarehouse, and (maybe) BestBuy, but NOT Apple Store. Oh…I sent follow up emails to three Apple Inc managers, and never heard anything.