Apple ponders own US retail chain

UK version seems to be working, at least

Speculation is mounting that Apple is planning to open a series of High Street stores across the US. The argument appears to centre on Gateway's claims that its stores generate about the same margins as online sales. That has suggested to Apple watchers that the company might well consider branching out in this direction. It's a tempting thought, but it's not hard to find reasons why interim Steve Jobs would not countenance such a move. The company's relationship with CompUSA has generally worked rather well, but its falling out with Best Buy over how to manage inventory of multi-colour iMacs should have pointed out to Apple that it needs to manage its biggest retail partners very carefully. Last weekend, Sears began offering the iMac through 800 stores across the US, so retail competition is beginning to bubble up nicely. Would Apple be willing to risk the sales these outlets are likely to generate by announcing a plan to go up against them? Well, so far the retail focus has been centred on the iMac. As a consumer machine, that makes a lot of sense. However, Apple still has to promote its professional Power Mac and PowerBook lines to a wider audience, and a retail chain devoted solely to those models and that market could be made to work without treading on Sears and CompUSA's toes. Apple's product strategy is clearly based on ensuring its kit stands out from the herd. The iMac does that in spades, and as a consumer-oriented machine has been given many opportunities to do so. The blue'n'white Power Mac G3 stands out too, but there are much fewer ways it can be seen to do so. Providing a showcase to do so would be a wise move. The snag here is making it work financially. Showcases look good but don't necessarily pull in the revenue, particularly if sales are intentionally restricted to avoid annoying the reseller channel. Restricting sales would guarantee that the Gateway example, if true, couldn't be matched. Given Apple's current keenness to compare itself with direct PC paragons -- Dell, known as the industry's best manager of inventory, is its favourite target for comparison on that criterion -- it might well leap at the chance to claim its own retail stores offer better margins the Gateway's. Some kind of partnership would seem the most likely solution to squaring the strong sales vs. channel pacification circle. That's largely how Apple is working to increase its High Street presence in the UK, by combining its old Apple-only AppleCentre programme with a more consumer-oriented focus. It's difficult to say how successful such ventures have been -- Apple UK doesn't like to give out sales figures, and the US parent doesn't break down overall numbers into sufficient detail to let you work it out for yourself. That said they do, along with strong iMac advertising, help raise the brands profile, and that boosts sales even if the stores themselves don't always benefit. And there's no reason to suppose a US AppleStore chain couldn't be made to work at the very least the same way. ®

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