That’s what David Goldstein, president of research outfit Channel Marketing, said of Apple after the grand opening of the company’s first retail stores in 2001. Yet 12 years later, the lights in Apple’s stores remain lit, there are 406 of them spread across 14 countries, and they boast hands-down some of the most valuable retail space in the world.

In the first quarter, Apple’s average revenue per store topped out at about $13 million, reaching its highest level ever for a non-holiday quarter, according to Asymco analyst Horace Dediu. And the company collected a record $57.60 in revenue per visitor, with about $12 of that being profit.

Impressive numbers for Apple, which continues to outperform all other retailers on a per-square-foot basis in the U.S., by a very wide margin. Apple Stores earn twice as much per square foot as Tiffany & Co., the second-most-lucrative U.S. retailer, and three times as much as Lululemon Athletica, the third-most-lucrative.

And the company’s average revenue per visitor will only improve as it expands internationally, particularly in big untapped markets like China. Apple essentially doubled down on its retail presence in greater China over the past year, raising the number of stores to 11 from six. And according to CEO Tim Cook, that’s just the beginning.

“This isn’t nearly what we need, and it’s not the final by any means,” Cook said earlier this year. “We’re not even close to that. But I feel that we’re making great progress, and I am very happy with how things are going.”

And whatever the China market may lack in individual wealth, it makes up for in volume.

“This is one of the great paradoxes in Apple retail: The more Apple expands internationally, the higher their average retail revenue becomes, despite them opening stores in emerging markets such as China,” said Carl Howe, VP for research and data sciences at Yankee Group. “As a proof point, the New York flagship 5th Avenue Apple store used to be one of the highest grossing stores in the entire Apple chain, pulling in somewhere around $350 million in revenue in 2010. Today — based on anecdotal evidence, but I believe this to be true — nearly every Apple store in China sells as much or more than the 5th Avenue store. China may have a lower percentage of wealthy people than the U.S., but they have more absolute numbers of them.

“What I think this all says is that Apple has itself as a global aspirational brand, and that people will go to amazing economic lengths to own Apple products,” Howe said. “So long as Apple maintains that premium brand and value, the only limits to its retail growth is how many stores it can build.”

Apple recently submitted plans to San Francisco’s planning commission for a brand-new retail store at Stockton and Post on Union Square — home to many of the city’s luxury retailers. The new building (currently a Levi’s flagship store, which is moving to Market Street this summer) will be 24,819 square feet, about 45 percent larger than Apple’s current store at Stockton and Ellis. Apple figures it will require about 400 employees to operate, 50 more than its predecessor. And, as you can see from the embedded images, the store will boast a fresh design — big, open floors and lots of glass (imagine a massive, translucent Mac mini).

No word yet on a start date or even a ballpark timetable for the project.

“We’re thrilled to be working with the city of San Francisco on a new Apple retail store at Union Square,” Apple said in a statement to AllThingsD. “Our store on Stockton Street has welcomed over 13 million customers since it opened nine years ago, and we look forward to serving them in an amazing new location when this project is complete.”

McDougal, who resigned earlier this month, is to be replaced by Jim Bean, formerly Apple VP of Finance. While it’s not clear if this is an exec-for-exec swap, Bean has exactly the sort of operational acumen that would lend itself to the position McDougal’s departure leaves open. Bean will retain his VP title, though “of Finance” may change to “of Retail.”

“Retail has an incredibly strong network of leaders at the store and regional level, and they will continue the excellent work they’ve done over the past decade to revolutionize retailing with unique, innovative services and a focus on the customer that is second to none,” Apple spokesman Steve Dowling said. “Jim Bean is moving to Retail to help support our store teams. Jim has been at Apple for 15 years and is a great leader who understands our culture and focus on customer service.”

McDougal’s departure and Bean’s appointment come as Apple continues its search for a retail head to replace John Browett, the former Dixons exec the company sacked last fall. McDougal, who worked closely with former Apple retail head Ron Johnson on the launch of Apple’s retail store strategy, was widely considered a candidate for that job, though is now clearly out of the running. What’s not clear is if his departure was somehow related to the search for a new SVP of retail and his candidacy for it. People with knowledge of the situation who declined to be named would say only that McDougal wanted to spend more time with his family.

News of McDougal’s resignation was first reported by IfoAppleStore.

Now Apple is once again on the hunt for an executive to oversee its retail stores, a keystone of the company’s success. And it can ill afford to make another such hiring mistake.

In the fourth quarter, Apple’s 401 stores worldwide generated an average revenue per store of $11.2 million, and a recent study found that Apple’s retail stores earn $6,050 per square foot, compared to Tiffany & Co., which earned $3,017 a square foot.

So who might Apple look to to fill the shoes of Ron Johnson, the chief architect of its retail strategy, who left the company last year to take the CEO job at retailer J.C. Penney? That’s a conundrum difficult enough to perplex the most skilled of recruiters; recall that it took Apple about seven months to sign Browett, and that was with the help of executive search firm Egon Zehnder International.

An easier task is to determine where Apple might look for candidates with the sort of experience needed to drive its retail ops.

“Apple’s next frontier is to really grow the brand internationally,” Neil Stern, a senior partner at retail consultancy McMillan Doolittle LLP, told AllThingsD. “So brands like Nike, Coach, Burberry and Starbucks spring to mind as being ‘models,’ perhaps, of where an individual might have that experience.”

We’ve been asking around for weeks about possible external candidates for Apple’s senior VP of retail job, and have heard largely the same thing, and a few names to boot*. They are, in no particular order:

• Burberry CEO Angela Ahrendts
• Victor Luis, president, International Group, Coach
• Jeanne Jackson, president, Direct to Consumer, Nike
• John Culver, president, Starbucks Coffee China and Asia Pacific
• Paul Gainer, executive vice president, Global Disney Store

All five are well qualified. They’re working for global brands with a strong consumer focus and broad international presence. Ahrendts has spent years stewarding one of the world’s most iconic global brands. Luis has spent years steering Coach’s international operations and, crucially, served as CEO of Coach China. At Nike, Jackson is working for a company with a culture similar to Apple’s, one on whose board CEO Tim Cook serves; she also used to run Banana Republic and Walmart.com. Culver has played a key role in growing Starbucks’ global footprint in markets that are of keen interest to Apple, and has done a good job of translating the company’s culture internationally, which isn’t an easy job. Gainer has been overseeing the Disney Store since 2008, when the company reacquired it, and now directs a global retail chain that’s in many ways reminiscent of Apple’s. His boss, Disney CEO Bob Iger, sits on Apple’s board.

Good candidates, all. But would any be interested in making the jump to Apple?

Industry sources are divided on that issue. Some say the job is so high-profile that it will inevitably generate strong interest and appeal to the caliber of candidates like those above.

Others feel that the transition that a move to Apple would require of these candidates would be off-putting. “Any one of these people would be terrific for that job,” one source with close ties to Apple said. “But none of them would ever take it. They’re retail people, and Apple is not a true retailer. It’s a consumer-products company.”

Most retail CEOs come out of a merchandising background, setting a vision for the brand and selecting the product lines it will sell; creating the consumer experience and building out the merchandising, marketing, financial and operational columns that support those things is their passion. But running Apple’s retail operations these days doesn’t involve much of that. Instead, it’s about continuing to execute well on someone else’s good idea. It’s about selling the devices you’re told to sell, and selling them effectively in more markets. The real exciting stuff, the big innovation, has already happened. Apple doesn’t need a hotshot, retail problem-solver. And that may temper the job’s appeal.

As one source familiar with Apple’s retail operations said, “I’m not sure people of the caliber Apple is probably looking for would see an opportunity to add much value to the company’s retail operations — certainly not as much as they might find elsewhere.”

So, then, where does Apple turn? Does it look for retail leadership internally?

That’s certainly a possibility. And there are at least three candidates: Steve Cano, Apple’s manager of retail stores; Bob Bridger, Apple VP for retail real estate and development; and Jerry McDougal, VP of retail.

Of the three, McDougal seems the most likely, simply because he holds the VP of retail title already. But sources say that Cano would be a good pick, as well. His name has been bandied about before in relation to this job, and, according to insiders and outsiders both, he’s well-suited for it. As once source said, “Frankly, I was surprised he wasn’t tapped last time around.”

“I think Steve’s probably the best internal candidate,” Needham analyst Charlie Wolf said. “He’s the most well-rounded of those three.”

And that would seem to be the case. Cano started out as the manager of Apple’s first Soho store. Then he transferred to the company’s Ginza store in Japan to manage its opening and early days. Subsequently, he transferred to London to run international retail operations. And now he’s head of all Apple Stores.

In other words, he’s got broad in-the-field experience and, crucially, he gets Apple Store culture. Browett didn’t, and that’s among the reasons behind his ouster.

“[With Browett], clearly, there was not a cultural fit,” Stern said. “Any new head needs to fit into the Apple (and Apple Store) culture.”

And to have a strong vision for how to expand the Apple Store experience internationally, while maintaining one of its hallmarks: Good service. Sure, Apple sells a lot of hardware through its stores, but it also caters to multitudes of customers who visit seeking help at its Genius Bars. And that’s a keystone of its retail success. As one retailer said, “People underestimate just how powerful the Genius Bar is. You walk into an Apple Store with a broken iPhone, expecting a fight with some customer service rep that doesn’t know what they’re doing. But, instead, you get a Genius who diagnoses your problem on the spot. Maybe he even replaces your iPhone. Now how do you feel about Apple as you walk out of that store?”

The point: Whoever Apple taps for this job must do a good job of keeping customers happy as the business grows and work hard to ensure that, more often than not, folks who walk into an Apple Store for help walk out customers for life.

Put all those requirements together and the task of finding a candidate with the skill set to meet them becomes a tall order, indeed. Taller still, given the embarrassment of being forced to sack Browett after less than a year on the job. Apple’s next hire for this job has to be a good one. The repercussions are far too great if it’s not.

And, as Ron Johnson notes, the stakes are too high to rush a decision.

“I think Tim will take his time with this,” Johnson told AllThingsD. “The internal team is very strong and capable of running well until he finds the right person.”

Apple declined comment on its search for a new SVP of retail, noting — as it did in the press release announcing Browett’s departure — that its retail team continues to report directly to Tim Cook.

*The reply most often offered in response to this question: Ron Johnson.

With reporting by Tricia Duryee.

Piper Jaffray analyst Gene Munster and his team have been surveying iPhone 5 availability nightly at 100 Apple stores in the U.S., and lately have found stock levels to be dramatically improved.

“Over the past 10 days, AT&T and Verizon have shown dramatic improvements in availability, while Sprint has maintained consistent availability,” Munster said in a research note to clients today. “Last night, our checks indicated that Sprint phones were in stock at 92 percent of Apple Stores, AT&T was available at 82 percent of stores and Verizon at 72 percent of stores.”

This improvement in brick-and-mortar store availability has been accompanied by a shortening of iPhone 5 shipping times from Apple’s online store. Wait times for the device, which had been two to three weeks, today dropped to two weeks. A slight improvement, sure, but another important indication that Apple is nearing the point where it can keep up with iPhone 5 demand.

Said Munster, who expects Apple to sell 45 million iPhones in the December quarter, “As we get closer to the holiday, we believe consumers will likely have the ability to walk into an Apple Store and walk out with an iPhone 5 within the next two weeks.”

An impressive sum, and one large enough to make Apple the most valuable retailer per square foot in the United States for the second year in a row. By comparison, Tiffany & Co., the second most profitable American retailer by the same measure, earned $3,017 — less than half of Apple’s take.

In terms of highest overall sales per store, Apple placed a bit lower in the Retail Sails rankings. It came in ninth, behind outfits like Costco, Sam’s Club and Walmart. But the fact that it even made it into a top 10 ranking dominated by wholesale retailers is noteworthy.

Apple has built quite a retail empire for itself in the 11 years since it opened its first store amid some harsh skepticism. As David Goldstein, president of researcher Channel Marketing, said at the time, “I give them two years before they’re turning out the lights on a very painful and expensive mistake.”

Goldstein couldn’t have been more wrong. Today, Apple has about 390 stores worldwide and plans to open another 33 or so next year. And they are taking in money hand over fist.

As Yankee Group Vice President Carl Howe said of the Apple Store’s performance, “Apple’s retail sales figures are nothing short of astronomical. In a world where Tiffany sells diamonds and manages annual revenues of roughly $3,017 per square foot according to RetailSails.com, Apple’s retail stores average twice that. Said another way, Apple products are more valuable than diamonds — at least to the retail trade.”

Okay, that’s maybe a stretch, but the gist of Howe’s comment is right on. Remember that $6,050 per square foot is an average and that Apple’s flagship stores generate considerably more. “Back in 2010 or so, the flagship store on Fifth Avenue in New York alone was estimated to be selling $350 million in revenue per year, and it is only a 10,000 square foot store,” Howe told AllThingsD. “Doing the math, you discover its sales rate was $35,000 per square foot, although Apple has never confirmed those figures.”

Some news cannot wait, of course, and sources at Apple said the company had planned to release news of the sudden exit of Scott Forstall, one of its major execs, this afternoon.

Maybe so, but it’s also unusual timing. Due to Hurricane Sandy — which was poised to hit landfall in central New Jersey just as Apple made its announcement about the iOS mobile software chief’s leaving, along with that of Apple Store retail head John Browett — Wall Street reaction to what appears to be a major management move by CEO Tim Cook will not take place until at least Wednesday.

That’s because the massive storm has led to the closure of the stock markets today and tomorrow, leaving investors to mull on the major reorganization without a lot of ability to react.

Apple shares closed at $604 on Friday, up about 49 percent over the past year. Its stock had declined slightly recently, after last week’s quarterly earnings did not meet the enormous profit expectations of Wall Street. Still, Apple had — for anyone else — a blockbuster fourth quarter.

The tech leader reported $8.67 per share of profit on sales of $35.97 billion.

How the departure of Forstall and, to a much lesser extent, Browett (who has been a largely unpopular exec since he was hired a year ago), will be greeted by shareholders when markets open should be interesting.

On one hand, Forstall has been a major exec at the company for a very long time, in charge of key areas of success for Apple, including the software for its hugely popular iPhone and iPad. Forstall has even been called CEO-in-waiting in some media accounts.

That said, many sources report that he has wrangled with other top execs, including Cook, and he has been known as someone with a doesn’t-play-well-with-others personality. One source told me today that Forstall had made numerous “open challenges” to the Apple leader over the last year.

While that’s not necessarily a negative at Apple — the late CEO and co-founder Steve Jobs was also someone who did not suffer fools or even simple mistakes among trusted staff — the recent troubles as it replaced Google’s mapping software with its own had clearly tarnished Forstall’s image.

In addition, while Apple does great at hardware, as well hardware/software integration, it has often fallen down in other key software efforts, such as MobileMe, iTunes and more.

This is not all Forstall’s fault, of course, but his sudden departure — which will take place officially next year — means that Cook is consolidating control over the top management.

Thus, the did-he-jump-or-was-he-pushed meme will doubtlessly increase over the next few days. Pushed seems to be the consensus so far.

But here’s a little insight into Apple’s often opaque culture to better discern management Kremlinology there: iTunes is still advertising competitors’ maps instead of its own failed product, and Forstall got no stage time at Apple iPad mini event last week.

Clearly, the removal of Browett, who had made a series of moves that were negatively greeted by Apple’s retail unit, will make Cook look decisive, especially since he had hired him. But whether that extends to how the influential Forstall was dispatched — and it looks like he was — will be another story to grok for Wall Street.

Big management shifts at Apple are now taking place.

Scott Forstall, the man in charge of its iOS mobile software efforts and a major and longtime executive at the tech giant, is leaving next year and will remain an adviser to CEO Tim Cook until then.

In addition, new retail head John Browett is headed out the door.

As part of the move, Apple noted that four key execs — Jony Ive, Bob Mansfield, Eddy Cue and Craig Federighi — would “add responsibilities to their roles.”

Ive gets “Human Interface”; Cue will take over Maps and Siri voice recognition responsibilities; Mansfield will run a new unit called Technologies, “which combines all of Apple’s wireless teams across the company in one organization”; and Federighi gets the big job of iOS and OS X.

More to come on what happened, but Forstall’s departure is very big news and a drastic move for such an important player in the tech space.

He had big fans and also many detractors for his sharp-edged personality, as well as what some described as exhibiting “growing open challenges” to Cook himself. Forstall had previously been called “CEO-in-waiting” in one media account in Fortune.

In addition, numerous sources noted persistent tension between Forstall and several other key execs, especially the powerful design chief Ive.

Veiled internal politics at Apple aside, Forstall has been a key part of Apple’s success over the last decade, especially in the development iPad and the iPhone.

Recently, there has been some level of ire at Apple over the troubled rollout of its own mapping software and the replacement of Google’s popular service, which was Forstall’s responsibility. (No, this move does not mean everyone gets Google mapping back, as one person asked me.)

Browett’s leaving is a little less of a surprise. Since he got the job, he has alienated many within the highly successful retail organization at Apple, many sources said.

His departure comes less than one year after the former Dixons CEO was hired by Apple to succeed Ron Johnson, who left for J.C. Penney in November 2011. Recently he’s been criticized by some Apple Store employees for unfriendly policy changes aimed at increasing Apple’s retail profit margins.

More to come, obvi, but here is the official press release from Apple, which it put out with the most understated title of all time:

Apple Announces Changes to Increase Collaboration Across Hardware, Software & Services

Jony Ive, Bob Mansfield, Eddy Cue and Craig Federighi Add Responsibilities to Their Roles

CUPERTINO, California — October 29, 2012 — Apple® today announced executive management changes that will encourage even more collaboration between the Company’s world-class hardware, software and services teams. As part of these changes, Jony Ive, Bob Mansfield, Eddy Cue and Craig Federighi will add more responsibilities to their roles. Apple also announced that Scott Forstall will be leaving Apple next year and will serve as an advisor to CEO Tim Cook in the interim.

“We are in one of the most prolific periods of innovation and new products in Apple’s history,” said Tim Cook, Apple’s CEO. “The amazing products that we’ve introduced in September and October, iPhone 5, iOS 6, iPad mini, iPad, iMac, MacBook Pro, iPod touch, iPod nano and many of our applications, could only have been created at Apple and are the direct result of our relentless focus on tightly integrating world-class hardware, software and services.”

Jony Ive will provide leadership and direction for Human Interface (HI) across the company in addition to his role as the leader of Industrial Design. His incredible design aesthetic has been the driving force behind the look and feel of Apple’s products for more than a decade.

Eddy Cue will take on the additional responsibility of Siri® and Maps, placing all of our online services in one group. This organization has overseen major successes such as the iTunes Store®, the App Store℠, the iBookstore℠ and iCloud®. This group has an excellent track record of building and strengthening Apple’s online services to meet and exceed the high expectations of our customers.

Craig Federighi will lead both iOS and OS X®. Apple has the most advanced mobile and desktop operating systems, and this move brings together the OS teams to make it even easier to deliver the best technology and user experience innovations to both platforms.

Bob Mansfield will lead a new group, Technologies, which combines all of Apple’s wireless teams across the company in one organization, fostering innovation in this area at an even higher level. This organization will also include the semiconductor teams, who have ambitious plans for the future.

Additionally, John Browett is leaving Apple. A search for a new head of Retail is underway and in the interim, the Retail team will report directly to Tim Cook. Apple’s Retail organization has an incredibly strong network of leaders at the store and regional level who will continue the excellent work that has been done over the past decade to revolutionize retailing with unique, innovative services for customers.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

Recent visitors to Hong Kong and a few longtime residents tell AllThingsD that it’s tough to find any iPhone 5 inventory in the city. “The stores are all sold out,” said one local. “Carriers like SmarTone are taking orders, but they’re not offering delivery until late October, early November. If you’ve just got to have one, your best bet is the Apple Store lottery, but that’s a total crapshoot.”

And that does seem to be the case. Reports from the Apple Store in the International Finance Center Mall (IFC) in central Hong Kong suggest that it’s no easy to feat to hit the iPhone 5 jackpot.

“At Apple’s retail store, the iPhone 5 can be ordered online and a lottery process determines who is eligible for pickup at the store the next day,” Topeka analyst Brian White said after his visit to Hong Kong. “Based on our conversations, you might have a better shot at winning [an actual] lottery than getting the iPhone 5 the next day.”

White’s assessment of the current Hong Kong gadget zeitgeist: the city has “iPhone 5 fever.”

The company is expected to have a separate in-person event later this month for the launch of a smaller iPad tablet, so it’s unlikely to be that. Apple has already announced the iPhone 5 and an update to the full iPod line. But, with the holiday season ready to kick off, it could be a time for the company to make some last-minute changes to its Mac line, as well.

Also, Friday marks the anniversary of Steve Jobs’ death a year ago.

Typically, store outages only last a couple of hours, given that Apple does so much volume via its Web site.

In the meantime, Apple’s store can serve as a language tutor for anyone who wants to know how to say “We’ll be back soon” in a whole bunch of different languages.

Update:
Looks like Apple used this brief outage not to add new product to its store, but to post a text and video remembrance of its late co-founder. You’ll find the video on Apple’s Web site and the letter from CEO Tim Cook below.

A message from Tim Cook, Apple’s CEO.

Steve’s passing one year ago today was a sad and difficult time for all of us. I hope that today everyone will reflect on his extraordinary life and the many ways he made the world a better place.

One of the greatest gifts Steve gave to the world is Apple. No company has ever inspired such creativity or set such high standards for itself. Our values originated from Steve and his spirit will forever be the foundation of Apple. We share the great privilege and responsibility of carrying his legacy into the future.

I’m incredibly proud of the work we are doing, delivering products that our customers love and dreaming up new ones that will delight them down the road. It’s a wonderful tribute to Steve’s memory and everything he stood for.

- Tim

]]> http://allthingsd.com/20121004/apples-online-store-is-down-sending-customer-anticipation-up/feed/ 0 http://allthingsd.com/20121003/apple-stores-get-the-glory-but-retail-partners-shoulder-load/ http://allthingsd.com/20121003/apple-stores-get-the-glory-but-retail-partners-shoulder-load/#comments Wed, 03 Oct 2012 13:55:48 +0000 John Paczkowski http://allthingsd.com/?p=256513 Apple’s stores are among the most successful brick-and-mortar shops around, generating more revenue per square foot than any other retailer in the United States, including Tiffany.

During the company’s last earnings call, CFO Peter Oppenheimer said Apple’s 372 stores collectively generated $4.1 billion in revenue. That’s a vast sum, and one that might lead you to believe that Apple sells most of its gear through its own stores. But that’s not the case, according to a new study by Consumer Intelligence Research Partners (CIRP).

Between December of 2011 and August of 2012, CIRP surveyed 1,227 U.S. consumers who purchased an iPhone, iPad, or Mac, and found that while Apple Stores sold by far the most Macs and iPads during the period, they didn’t sell nearly as many iPhones as the company’s retail partners.

In the U.S., Apple’s retail stores, along with the company’s online storefront, sold 47 percent of the Macs and 40 percent of the iPads purchased by the survey sample during December 2011 and August 2012. But they only sold 21 percent of the iPhones. AT&T and Verizon stores both sold more than Apple, with 28 percent and 26 percent shares of sales, respectively. And Best Buy and Amazon (via fulfillments) together sold nearly as many iPads as Apple itself.

“Apple has around 250 stores in the U.S., while Best Buy and Best Buy Mobile total 1,300, and AT&T, Sprint, and Verizon have over 5,000 combined,” CIRP partner Mike Levin told AllThingsD. “Clearly, the Apple stores are much more productive on a per-unit basis, but their relatively low store count keeps them reliant on the carriers and Best Buy, not to mention Walmart, Target and others, for the vast majority of their retail sales.”

Ultimately, Apple’s retail partners are as critical to the company’s success as its own stores. Sure, the typical Apple Store might cater to 17,000 visitors per week, but that foot traffic translates to a smaller-than-expected share of the company’s overall business. As CIRP co-founder Josh Lowitz told AllThingsD, “Everyone who lives in an Apple Store city thinks that is where everything happens, but you can’t sell 40 million plus iPhones in a year through just 250 stores.”

]]> http://allthingsd.com/20121003/apple-stores-get-the-glory-but-retail-partners-shoulder-load/feed/ 0 http://allthingsd.com/20120921/iphone-5-a-hit-based-on-key-line-length-metric/ http://allthingsd.com/20120921/iphone-5-a-hit-based-on-key-line-length-metric/#comments Fri, 21 Sep 2012 21:11:41 +0000 John Paczkowski http://allthingsd.com/?p=253041 The lines to purchase one of Apple’s new iPhone 5s in certain major U.S. cities are longer than they have been for any other iPhone launch.

That’s the word from Piper Jaffray analyst Gene Munster, whose team surveyed lines outside Apple Stores in New York, Boston and Minneapolis, and found them to be, on average, 83 percent longer than those for the iPhone 4S last year. Based on the size of those launch day crowds, and Apple’s announcement Monday that it racked up 2 million preorders for the iPhone 5 in 24 hours, Munster predicts the company will sell 49 million iPhones in the December quarter, barring any supply constraints.

“We have counted iPhone launch day lines at every launch since the iPhone 3G in 2008,” Munster said in a note to clients. “We believe that based on our count of 775 customers in line for the iPhone 5 at the flagship 5th Avenue store, demand for the iPhone 5 is higher than any previous launch. We believe the line for the iPhone 5 was 70 percent greater than the line for the iPhone 4S despite Apple taking 2x as many online preorders. … Given the strength of the line for the iPhone 5, we are incrementally more confident in Apple’s ability to sell 8 million phones in the launch weekend.”

So who’s buying them? Previous iPhone owners, mostly. Wells Fargo analyst Maynard Um says that among the customers his team surveyed at Apple Stores in New York City, 32 percent were upgrading from iPhone 4S, 31 percent from iPhone 4 and 8 percent from the iPhone 3GS. Of the remainder, 8 percent were switching from BlackBerry, 7 percent from a Samsung device, 7 percent from an HTC device and 5 percent from “other.”

]]> http://allthingsd.com/20120921/iphone-5-a-hit-based-on-key-line-length-metric/feed/ 0 http://allthingsd.com/20120823/samsung-opens-new-apple-store-in-australia/ http://allthingsd.com/20120823/samsung-opens-new-apple-store-in-australia/#comments Thu, 23 Aug 2012 20:15:18 +0000 John Paczkowski http://allthingsd.com/?p=244476

Asher Moses / Sydney Morning Herald

While the jury debates the merits of the arguments made in the Apple-Samsung patent battle, let’s throw this one out to the court of public opinion.

Samsung this week opened its first retail “Experience” store in Sydney, Australia and its design and ethos, even in the most generous light, bear an uncanny resemblance to those of the Apple Store (photos here). The airy, spartan layout and open floor plan. A dedicated customer support desk staffed by “Samsung Smart Tutors” that recalls Apple’s Genius Bar. A group demonstration area. The broad, rectangular wall displays. Clean lines. Blue T-shirts for all store employees.

Now, to be fair, Samsung’s corporate color is blue and there are only so many ways you can design a retail experience. That said, it seems difficult to look at Samsung’s store and not immediately be reminded of Apple’s understated chain of brick-and-mortar retail stores which, at the time it debuted, was considered pioneering. And it’s awfully hard to imagine that the similarities between the two won’t further bolster Apple’s allegations that Samsung is a “copyist.”

Samsung did not respond to a request for comment.

(Image courtesy The Sydney Morning Herald)

]]> http://allthingsd.com/20120823/samsung-opens-new-apple-store-in-australia/feed/ 0 http://allthingsd.com/20120816/apple-retail-chief-admits-staffing-mistake/ http://allthingsd.com/20120816/apple-retail-chief-admits-staffing-mistake/#comments Thu, 16 Aug 2012 17:33:03 +0000 Ian Sherr http://allthingsd.com/?p=242277 Apple Inc.’s retail boss told employees the company made mistakes with its staffing levels, leading to news reports that the company was cutting employees, according to two people familiar with the matter.

In a communication with store leadership teams, senior vice president of retail, John Browett, who took the reins of Apple’s retail stores in April, said the company had been trying a new staffing formula for its retail stores.

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]]> http://allthingsd.com/20120816/apple-retail-chief-admits-staffing-mistake/feed/ 0 http://allthingsd.com/20120728/apples-new-ads-aim-to-show-the-genius-of-its-macs/ http://allthingsd.com/20120728/apples-new-ads-aim-to-show-the-genius-of-its-macs/#comments Sat, 28 Jul 2012 21:56:40 +0000 Ina Fried http://allthingsd.com/?p=235092 While most of Apple’s recent TV ads have focused on the iPad and iPhone, the company has a new campaign focused on the other part of its business — the Mac.

The unifying force in the ads is the presence of the Apple Store “Geniuses.” In each spot, they are free of their retail confines. In one called “Mayday,” a Genius helps several people on an airplane finish up their work in the few minutes, before the plane lands. In another ad, called “Labor Day,” a neighbor knocks on the door of the Apple Store Genius to get help because his wife is in labor.

But rather than wanting, say, an ambulance or a ride to the hospital, this guy wants to talk about making birth announcements on iPhoto.

Perhaps the most poignant of the three new spots is one titled “Basically,” in which a guy shows the Genius a box with a laptop he says is “basically” like a Mac. The Apple Store guy asks if it has iPhoto iMovie and Garage Band.

The guy shakes his head.

“So, this is nothing like a Mac,” the guy asks. Um, no, the Genius says.

All of the Apple ads are designed to subtly reinforce two things. First, they help further cement the image of Apple Store employees as knowledgable folks that can help one understand their computer. Second, the ads are designed to position the Mac against a wave of Ultrabooks that aim to emulate the thin and light characteristics of the MacBook Air.

If you haven’t seen them, they are posted on Apple’s Web site.

]]> http://allthingsd.com/20120728/apples-new-ads-aim-to-show-the-genius-of-its-macs/feed/ 0 http://allthingsd.com/20120626/sprint-iphone-sales-stronger-at-big-box-retailers-than-at-apple-stores/ http://allthingsd.com/20120626/sprint-iphone-sales-stronger-at-big-box-retailers-than-at-apple-stores/#comments Tue, 26 Jun 2012 10:33:25 +0000 John Paczkowski http://allthingsd.com/?p=224252 The iPhone is a big seller at Apple’s retail stores, but not necessarily Sprint’s version of the device. A new study by Consumer Intelligence Research Partners (CIRP) has found that Sprint iPhones sell far better at Best Buy and warehouse clubs and mass-market retailers (Target, Walmart, etc.) than they do at Apple Stores.

CIRP surveyed iPhone buyers over two three-month periods, ending March and May 2012, and found that Sprint’s share of iPhone sales through Apple was just 9 percent. Meanwhile, the carrier’s shares of iPhone sales through Best Buy and other mass-market retailers were 19 percent and 18 percent, respectively. In other words, Sprint is selling double the number of iPhones through big-box retailers than it is through Apple.

Which is odd, isn’t it? Particularly since iPhone sales through rival carriers AT&T and Verizon are fairly consistent across those same outlets, though Verizon does see a drop at Best Buy, Walmart and the like. Why is it that Sprint seems to fare worse than its competitors when Apple sells its iPhones?

It’s a perplexing question. Perhaps it has something to do with the retailers’ sales staff and their familiarity with these three networks. Best Buy has been selling phones on Sprint’s network for years. Apple only just started.

A more likely explanation? Legacy availability. AT&T and Verizon both have a lot of iPhone-using customers and very high retention rates; CIRP figures those two carriers retained 94 percent of their existing customers that bought an iPhone. In other words, if you bought an iPhone from Apple on AT&T or Verizon and you return to the store to buy another, you’re not likely to switch carriers. And since Apple Stores have sold only AT&T and Verizon iPhones for so long, Sprint’s seeing a bit less traction there than it is at retailers like Best Buy, where it has had a longer-term presence.

“Sprint is really suffering from being third to the dance,” CIRP partner Michael Levin told AllThingsD. “At the Apple Store and other carrier-agnostic retailers, there is still very little switching, and Sprint just doesn’t have enough existing customers walking through the door. … AT&T’s installed base of iPhone customers and Verizon’s huge, satisfied customer base are proving a barrier to Sprint growing its market share.”

Reached for comment, Sprint said it does not disclose sales by channel. Apple did not respond to a request for comment.

]]> http://allthingsd.com/20120626/sprint-iphone-sales-stronger-at-big-box-retailers-than-at-apple-stores/feed/ 0 http://allthingsd.com/20120625/secrets-from-the-apple-store-employee-rule-book-comic/ http://allthingsd.com/20120625/secrets-from-the-apple-store-employee-rule-book-comic/#comments Mon, 25 Jun 2012 23:17:08 +0000 Nitrozac and Snaggy http://allthingsd.com/?p=224177

]]> http://allthingsd.com/20120625/secrets-from-the-apple-store-employee-rule-book-comic/feed/ 4 http://allthingsd.com/20120624/especially-if-said-iphone-is-in-someones-pocket/ http://allthingsd.com/20120624/especially-if-said-iphone-is-in-someones-pocket/#comments Sun, 24 Jun 2012 14:02:18 +0000 Kara Swisher http://allthingsd.com/?p=223665

One rule: Ask for permission before touching anyone’s iPhone.

– A key point of etiquette in interacting with customers, as taught to Apple Store trainees, according to a New York Times report on them.

]]> http://allthingsd.com/20120624/especially-if-said-iphone-is-in-someones-pocket/feed/ 0 http://allthingsd.com/20120323/best-buy-is-selling-nearly-as-many-iphones-as-apple-itself/ http://allthingsd.com/20120323/best-buy-is-selling-nearly-as-many-iphones-as-apple-itself/#comments Fri, 23 Mar 2012 10:03:53 +0000 John Paczkowski http://allthingsd.com/?p=189404

Apple’s move to make Best Buy an outlet for the iPhone back in 2008 is proving a wise one — lucrative, too.

Over the past few years, the retail chain has become an increasingly important outlet for Apple, extending its reach and distribution via its 1,100 stores. About 600 of them host an Apple Store-within-a-store, most of those in geographic locations that Cupertino feels are too small to support a dedicated Apple store.

And they’re selling a lot of iPhones.

Almost as many as Apple itself, according to new data from Consumer Intelligence Research Partners (CIRP).

The firm surveyed iPhone buyers in December 2011, January 2012 and February 2012, asking them where they purchased the device. And it found that retail stores accounted for 76 percent of iPhone sales; online stores, 24 percent. When the iPhone 4S first launched, retail stores and online outlets accounted for 67 percent and 33 percent of sales, respectively, largely due to online preorders.

More interesting, however, was the breakdown of the stores themselves. According to CIRP’s data, Apple sold 15 percent of all iPhones purchased in the U.S. during the period of the survey (retail, 11 percent; online, 4 percent). Meanwhile, AT&T sold 32 percent via its online and retail stores; Verizon, 30 percent — again, online and off — and Sprint, 7 percent.

And Best Buy? The big-box retailer sold 13 percent, just 2 percent shy of Apple itself. The remaining 3 percent is “Other,” which I’m told is a combination of retailers like Radio Shack and Walmart and respondents who received their iPhone as a gift and didn’t know where it was originally purchased.

So when it comes to iPhone distribution, it’s obviously the carriers that drive sales. But retail partners like Best Buy are clearly hugely important, as well. Nearly as important as the Apple Store.

“Apple Stores and the Apple Web site are tremendously productive, but they are limited by their relatively small retail footprint,” CIRP’s Josh Lowitz told AllThingsD. “There are four times as many Best Buy stores, and probably 20 times as many AT&T, Verizon, and Sprint stores, so aggressive distribution through all these channels is critical to Apple’s U.S. strategy.”

]]> http://allthingsd.com/20120323/best-buy-is-selling-nearly-as-many-iphones-as-apple-itself/feed/ 0 http://allthingsd.com/20120316/new-ipad-same-long-lines/ http://allthingsd.com/20120316/new-ipad-same-long-lines/#comments Fri, 16 Mar 2012 12:31:13 +0000 Ina Fried http://allthingsd.com/?p=187023 Once again, Apple has managed to draw a crowd eager to be among the first to get their hands on the latest iPad.

By 7:30 am ET, the line at Apple’s Fifth Avenue store snaked around the side of the store, down New York’s 59th Street past FAO Schwarz, then rounded the corner onto Madison. On par with some launches, the line didn’t reach peak levels in which it made it all the way back around to the front of the store.

Folks began getting in line as early as Monday, with many braving a cold damp night on Thursday to get the chance to be one of the first with the new iPad.

“It’s been a little bit cold,” said Christopher DiBella, who waited in line for 24 hours to get the new iPad. DiBella said it is the eighth Apple product launch he has gone to in person. While he knows he could order online, he said he kind of likes the spectacle; plus, he was traveling for work, and wasn’t quite sure where he would be when the new iPad went on sale.

Midway through the line, Army recruiters Luis Zacarias and C.J. Montoya waited patiently in uniform, convinced that they would be able to get one of the new tablets before they had to head into work.

“We’re leaving here with one,” Montoya said with a smile. “That’s undeniable.”

Those who ordered earliest could avoid such lines and still get their hands on the tablet in the next couple of days. However, those who are just now realizing they want a new iPad face an unpleasant dilemma — order online and wait a while, or join a queue at an Apple or other iPad-selling retail store.

Announced less than two weeks ago, the new iPad looks much like its predecessor in design, but features a super-high-resolution screen, along with an improved graphics chip and camera, and the option of using ultra-fast LTE wireless networks from AT&T or Verizon.

Also on hand — and among the first in the store — were customers like Jim Basquez of Manhattan, who ordered the day the new tablet was announced, but opted to pick up his iPad in-store. Standing in line around 7:30 am, Basquez was playing an NBA basketball game on his iPad 2 — which he now plans to give to his brother.

Apple has its launch plan down to a science. At 7:53, loud cheers started coming from the workers inside the store. Four minutes later the doors were unlocked and propped open. Promptly at 8, the first customers were allowed in, and by 8:07, the first person emerged with a new iPad, only to be quickly besieged by reporters and photographers as if they were a model walking the red carpet.

A handful of companies looked to capitalize on — and build goodwill with — the crowd. A Pennsylvania candy company was handing out Peanut Chews, while iPod-case maker Otterbox handed out survival kits, including beanies and ponchos, which came in handy when the cold, misty night turned to rain around 4 am on Friday.

A small gathering of protesters affiliated with Change.org also stopped by the launch, showing a banner and encouraging Apple to do more regarding the treatment of the workers who make the iPad and other products.

“It’s important to me that the folks that make the products we use in our everyday lives are treated ethically,” said Charlene Carruthers, a New York-based activist.

Update: Here’s the video from the scene.

]]> http://allthingsd.com/20120316/new-ipad-same-long-lines/feed/ 0 http://allthingsd.com/20120203/apple-all-ipad-and-iphone-models-will-be-back-on-sale-online-in-germany-shortly/ http://allthingsd.com/20120203/apple-all-ipad-and-iphone-models-will-be-back-on-sale-online-in-germany-shortly/#comments Fri, 03 Feb 2012 16:00:01 +0000 John Paczkowski http://allthingsd.com/?p=171130 That was fast.

Apple, which has spent the past day pulling older model iPhone and iPad inventory from the shelves of its online store in Germany, is now scrambling to restore it. This morning, a court temporarily suspended an injunction that prevented Apple from selling or distributing iOS devices believed to infringe certain Motorola Mobility patents.

In a statement given to AllThingsD, Apple confirmed that the iPhone 3G, iPhone 3GS, iPhone 4 and 3G/UMTS-based iPads should be returning to the shelves of its German online store in a matter of hours.

“All iPad and iPhone models will be back on sale through Apple’s online store in Germany shortly,” an Apple spokeswoman told AllThingsD. “Apple appealed this ruling because Motorola repeatedly refuses to license this patent to Apple on reasonable terms, despite having declared it an industry standard patent seven years ago.”

The injunction at issue here was granted last December, but wasn’t served until recently, sources say. Apple began making the appropriate adjustments to its German online store earlier this week, while continuing to appeal the injunction, which was subsequently suspended this morning.

So what happens next? Well, this is only a temporary suspension. So, at best, it’s a brief reprieve for Apple, until the legal issues surrounding it are resolved. Top among them: Apple’s argument that Motorola Mobility is not honoring the FRAND licensing obligations (fair, reasonable and non-discriminatory) it has on some standards-essential patents.

“In a best-case scenario for Apple, the suspension would now be in effect until the appeals court makes a decision on Apple’s appeal,” FOSS Patents’ Florian Mueller explains. “In that case, it would be in effect for well over a year.”

]]> http://allthingsd.com/20120203/apple-all-ipad-and-iphone-models-will-be-back-on-sale-online-in-germany-shortly/feed/ 0 http://allthingsd.com/20120112/apple-mini-stores-headed-to-target/ http://allthingsd.com/20120112/apple-mini-stores-headed-to-target/#comments Thu, 12 Jan 2012 16:25:16 +0000 John Paczkowski http://allthingsd.com/?p=163240 Apple’s long-running relationship with Target is about to get a bit more serious.

Target today said it plans to test Apple mini-stores at a few dozen of its retail locations this year, expanding a partnership that to date has seen it selling only iOS devices.

“We will have 25 stores with a unique display and assortment [of Apple products],” Target spokeswoman Dustee Jenkins told MarketWatch.

First reported by AppleInsider last week, the move is a wise one for both companies.For Target, it’s a good way to invigorate its softening electronics business, which forced the retailer to cut its earnings forecast last week. And for Apple, it’s another means of expanding its retail reach into smaller locations that can’t support a standalone Apple Store. The company inked a similar deal with Best Buy in 2007, debuting a handful of mini-stores at several of the big box retailer’s locations. Today, some 700 Best Buy stores across the United States feature an Apple shop.

Apple declined comment on the arrangement.

]]> http://allthingsd.com/20120112/apple-mini-stores-headed-to-target/feed/ 0 http://allthingsd.com/20111128/tell-me-again-how-ipad-demand-is-waning/ http://allthingsd.com/20111128/tell-me-again-how-ipad-demand-is-waning/#comments Mon, 28 Nov 2011 19:13:52 +0000 John Paczkowski http://allthingsd.com/?p=147724 If demand for the iPad truly is waning, as some have argued, you wouldn’t know it from the Black Friday foot traffic at Apple’s retail stores this past weekend.

Piper Jaffray analyst Gene Munster surveyed a few Apple stores on Black Friday and found that iPad sales per hour were 68 percent higher than they were a year ago. On average, the stores Munster visited sold about 14.8 iPads per hour, up from 8.8 iPads per hour last year, more than enough to support the analyst’s projection of 13.5 million iPads sold in the December quarter.

iPad sell-through remains “strong,” said Munster.

Over at Deutsche Bank, analyst Chris Whitmore reached a similar conclusion after checking in with more than 100 Apple retail stores and another 100 or so carrier outlets and big-box retailers. “iPad demand continues to be robust, driven by significant consumer interest in the device,” Whitmore said in a research note to clients. “Our checks indicated the iPad was a popular item on many consumers’ shopping lists over the weekend.”

While demand for the iPad was high across all models, Whitmore found it to be highest for the 32GB version with 3G, which evidently hits the sweet spot storage-wise. Also in high demand, AT&T 3G models which, unlike their Verizon counterparts, can be used internationally.

Like Munster, Whitmore came away from his Black Friday checks convinced iPad sales are tracking roughly in line with his estimate: 14 million for the December quarter.

Seems those iPad concerns were a bit overblown.

]]> http://allthingsd.com/20111128/tell-me-again-how-ipad-demand-is-waning/feed/ 0 http://allthingsd.com/20111108/apple-prioritizing-own-stores-with-iphone-supply/ http://allthingsd.com/20111108/apple-prioritizing-own-stores-with-iphone-supply/#comments Tue, 08 Nov 2011 12:10:21 +0000 John Paczkowski http://allthingsd.com/?p=141593 Demand for Apple’s new iPhone 4S appears to be unwavering both at home and abroad.

When the device became available for preorder last Friday in Hong Kong, it sold out within 10 minutes. And in the States, retail inventories are reportedly being depleted almost as quickly as Apple can replenish them.

Deutsche Bank’s Chris Whitmore says a great majority of Apple’s U.S. stores are running out of 4S supplies on a daily basis.

“Our retail checks reveal Apple is experiencing daily stock outs at 85 to 90 percent of the ~30 retail stores we called,” Whitmore wrote in a note to clients. “Apple employees are directing customers to make an online appointment (first come first serve) for next day pick up at nearby Apple retail stores as stocks appear to be refreshed daily at most locations.”

Interestingly, availability at Apple’s carrier partners — AT&T, Sprint and Verizon — seems to be a bit more sporadic. “Our calls to carrier stores reveal infrequent shipments and no certainty when the next shipment will arrive with widespread shortages,” Whitmore explains. “It appears that Apple is prioritizing its own stores with new iPhones.”

Understandable, of course, though potentially a bit frustrating for carriers. Anyway …

So once again Apple is working hard to keep up with massive demand for its latest iPhone. And, once again, supply is likely the only factor limiting how many handsets it will sell.

Says Whitmore: “Continued strong demand (ahead of the holidays with more countries to be rolled out) makes our 28 million iPhone estimate for the December quarter appear increasingly conservative.”

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