One number holds the key to Apple Retail in 2009

[AppleInsider]

A critical figure will emerge from Apple's conference call next Tuesday, when the company discloses how many new retail stores will open during fiscal 2009. The number will not only signify the electronics maker's commitment to reach even more customers, but will represent a wager -- big or small -- on a world economy in turmoil.

Chief financial officer Peter Oppenheimer traditionally provides the number during his review of the retail operation, and his forecast has been in the range of 35 to 40 stores almost every year. In fact, the number of grand openings has ranged from 32 to 46 until last year, when it totaled 50.

Over at ifoAppleStore, I've identified 18 Apple new store projects that will result in grand openings some time during 2008-2010. Tipsters have pointed to another 38 store projects that are in some stage of planning, and which could be either slowed down, cancelled or given the green light.

A slow-down in store openings would affect Apple in two ways -- it would reduce exposure to potential new customers in new territories and, perhaps more importantly, it would reduce the Genius Bar service options for existing customers. As the number of Apple users increases, offering support has become just as important as promoting sales at the stores.

If Apple does decide to slow down, fate has offered them the right time to do it. Typically, the largest number of stores is scheduled to open during the period from June to December, since that coincides with the company's back-to-school and holiday store promotions. Right now, Apple's planning team is working on the slowest period for stores openings, the first half of next year, which typically represents just 30 percent of grand openings.

So, a decision made now to slow down store expansion would affect fewer projects that have already been given the green light. That would result in less costs associated with delaying or canceling the projects.

At the same time, Apple's new stores have recently included a higher percentage of international locations. And almost all of the international stores that opened in fiscal 2008 were "branding" type stores, intended to provide visibility to the company's logo and products first, and to generate revenues second. Since this branding is so important to Apple, it's likely that international location openings will continue as previously scheduled.

Financially, Apple has never skimped on funding the stores through the years. Capital expenditures have increased each year, reaching $294 million for fiscal 2008. The company's lease commitments for the stores reached a substantial $1.3 billion at the end of the last quarter. With a huge cash reserve, funding new store construction and signing long-term store leases doesn't seem to be much of a liability for Apple.

Lastly, Apple has very sophisticated systems for analyzing real estate locations, revenue and store visitors. It would not be difficult to create "success" forecasts for each store that's now in the planning process, and to predict its level of profitability, even in the face of a consumer buying downturn.

Here's the IFO forecast for Apple's store openings during 2009, based on tips and other inside information:

U.S - There are several large stores in the planning stage that will definitely open over the next 18 months, including New York City, Chicago and Washington (DC). There are several smaller stores that will most likely open.
Canada - Only one potential new store, in Toronto, has been reported, although a second Vancouver store has been rumored. It's likely this country may not see any new stores beyond those.
Japan - Sales of Apple products into this highly competitive environment have never been stellar, and Japan's economy was fragile before the recent downturn. Best bet, no new stores.
Australia - A second store in Melbourne is possible, but stores in other cities probably are unlikely.
UK - The high-profile Covent Garden store is moving ahead for an early 2010 opening. A street-level store in Edinburgh is definitely possible. Stores already in the late implementation phase in Brighton, Reading and London will definitely open. However, Apple's plans to open a store on every High Street in every major city (35 to 40 total) could be delayed.
Germany - The Munich store is scheduled to open in December. Beyond that, stores in other cities are unlikely.
France - The Carousel de Louvre store is on track for a 2009 opening, and a second store in the Opera district is probable. Other stores in the country probably won't appear.
Italy - There have been persistent tips about a second or third store in cities beyond Rome, but their progress isn't known. It's likely the one existing store will serve Italy for awhile.
Switzerland - The second Zurich store will definitely open late in 2008. No other locations have been reported, and are unlikely.
China - The second store in Beijing is already ready for construction, and it's considered a high-profile, brand-carrying location. It will be built. The Shanghai store would fulfill the same role in a very important trade center, but it's not clear if the project is far enough along to make it a sure thing.
Here's the complete list of current and future stores.

Gary Allen is the creator and author of ifo Apple Store, which provides close watch of Apple's retail initiative. When Gary isn't busy publishing news and information on Apple's latest retail stores, he finds himself hanging out at one.

[ View this article at AppleInsider.com ]

[themoonisdown09]

I would love it if they built an Apple store near me. The closest stores I have are Atlanta, Georgia (about 1.5 hours away) and Nashville, Tennessee (about 2 hours away).

[EauVive]

I hope they still plan to open one in Paris ! The closest one is in London, 3 hours away, and they sell MacBooks with a wrong keyboard!

[wbrasington]

Originally Posted by EauVive

I hope they still plan to open one in Paris ! The closest one is in London, 3 hours away, and they sell MacBooks with a wrong keyboard!

I'm guessing the comment that limiting the stores they open, will overload the gen. bar staff as the growth in customers will have fewer choices.... is not a concern for you.

Not much chance the London store is going to overload if a Paris store is delayed and those customers have to go to London!

A real stretch in the article to make this just a little bit more important than it really is.
Must be a slow news day......

[fraklinc]

I have 6 stores all within a 10 mile range in northern NJ and sometimes you can even see people waiting in lines for some stores to open in the morning, like if they where having a sale or something. don't know what Apple is doing but it looks like is working, specially with the economy standing where it is

[Rayz]

Opening retail stores when the world was moving to online sales? How they laughed ....

[retiarius]

Originally Posted by wbrasington

A real stretch in the article to make this just a little bit more important than it really is.
Must be a slow news day......

But this topic is like a bone given to a dog (or meat to a lion) to the analyst/hedgefund cabal.

Can you imagine the unrealistic expectations immediately planted by the shorts,
feeding the tension at the conference call, with Oppenheimer handing the question
over to Ron Johnson, who then mumbles something about how the inevitable
slowdown in buildout doesn't mean much, because Apple's lead time for the
newly important international locations is longer, and stressing revenue per sq. ft.
still trumping Tiffany's, or whatever?

The nattering nabobs of negativism then headline "Heretofore blistering Apple sales slowdown
foreseen -- stock crashes on retail store forecast"...

[EauVive]

Originally Posted by wbrasington

I'm guessing the comment that limiting the stores they open, will overload the gen. bar staff as the growth in customers will have fewer choices.... is not a concern for you.

I guess not.

Not much chance the London store is going to overload if a Paris store is delayed and those customers have to go to London!

Well, buying a MacBook in London would mean not only getting a wrong keyboard, but also a wrong power outlet. Then, who knows what else, Brits are so quaint.

A real stretch in the article to make this just a little bit more important than it really is.
Must be a slow news day......

Apple can't announce a new product each day...

[solipsism]

Originally Posted by EauVive

I hope they still plan to open one in Paris ! The closest one is in London, 3 hours away, and they sell MacBooks with a wrong keyboard!

I hear that they click on the wrong side of the trackpad, too. (really bad joke)

Seriously though, I'm surprised that Paris doesn't have a half dozen Apple stores. France seems like an ideal place to start getting Macs into the bulk of Europe. Are there legal/copyright/openness issues that would keep Apple's Mac out of France?

[EauVive]

Originally Posted by solipsism

I hear that they click on the wrong side of the trackpad, too. (really bad joke)

Seriously though, I'm surprised that Paris doesn't have a half dozen Apple stores. France seems like an ideal place to start getting Macs into the bulk of Europe. Are there legal/copyright/openness issues that would keep Apple's Mac out of France?

I don't know. Frankly, I am more or less convinced that we Frogs were always early fans of Apple. There might be several reasons why it has been delayed.

1. Apple is traditionnaly represented by their network of resalers. Apple doesn't want to threaten them.
2. The cost of the real estate is too high (They planned to open an Apple Store on the Champs-Élysées, but backed off evidently for financial reasons).
3. They estimated their maket share being too low to justify the opening.
4. Etc. ?

Also, no place in Europe is ideal for selling Mac abroad, because each country has its own different keyboard. Even French-speaking parts of Belgium and Switzerland use different keyboards as the plain French one. They would have to stock a lot of different versions, and I don't think it is very handy in a small space like a store.

[solipsism]

Originally Posted by EauVive

Also, no place in Europe is ideal for selling Mac abroad, because each country has its own different keyboard. Even French-speaking parts of Belgium and Switzerland use different keyboards as the plain French one. They would have to stock a lot of different versions, and I don't think it is very handy in a small space like a store.

That is a pain! maybe by the next revision the keyboard buttons will be OLED so they can adapt to any language in any culture.

[EauVive]

Originally Posted by solipsism

That is a pain! maybe by the next revision the keyboard buttons will be OLED so they can adapt to any language in any culture.

That would be cool but certainly quite against the energy savings trend!

[ncee]

Ok, so let me see if I can get this.

Apple is doing very well, maybe even well considering the economy. So Apple may beat projections, and surprise everyone.

- iPhone sales thru the roof (making a ton of money)
- Laptop sales … going up (making a ton of money)
- iPod sales STILL going strong (making a ton of money)
- iTunes sales heading upward (making a ton of money)
- New App., Store sales going crazy (making a ton of money)
- Getting ready for MacExpo and evn more new up-dates and New products (making a ton of money)


BUT, because they aren't going to build a ton more new stores - Apple must be hurting - stock will be heading for the toilet - Analyst Suck!

Skip

[aaarrrgggh]

There is clearly still room for expansion in Apple's network, but I imagine they will be cautious given the impact a stronger dollar is having on prices for ROW. While I prefer the actual Apple stores, partnering with the heavily branded third-party stores (such as they have in Sweden) might make more sense for a number of areas.

If I were a shrewd business man though, I would sieze the opportunity to get in on cheap retail leases over the next year. I would imagine several locations would actually give them exceptional deals as a micro-anchor tenant.

[thethirdshoe]

Remember, Apple has the highest retail sales $ per square foot on the planet.

It just will not matter if it goes down. Apple supports it's customers.

[silverpraxis]

After reading the comments, I'm glad others thought of keyboard localization as a problem with international brick and mortar establishments. Maybe this will be less of a hassle as Apple reduces packaging sizes for their products to allow more physical stock in retail locations, however display models will always be a problem in this area. Can you set up a French, Swiss, and German MacBook Pro side-by-side on the table without alienating someone?

Online is the way to go in these countries, because I'm sure this problem occurs even in my home area of Southern California. Many people speak Spanish in my area, with uncomfortably little or no English skills, and there are no Apple Stores catering to that language. I'm sure Apple loses at least a few retail sales to that dilemma in it's home state. Internationally, with languages mixed so densely, it could present a large problem.

On the flip side of that argument, Apple needs stores in these countries just to brand themselves better there. They have great US sales, it's time to focus on international sales while they have momentum.

As an aside, my wish is to have a flagship store open in the LA/OC/SD area, I'm ever so slightly envious of my east coast friends for there massive, beautiful stores. Southern California may have more stores already than I can name, with at least two within a 15 minute drive of my home and office, but it would be great to have the semi-religious experience of a flagship store in my area. I don't delude myself however. I know LA's population isn't dense enough, Apple's already covered the land in glowing fruit icons, and other locations need stores first. One can dream though! (Surprise me with a current store remodel Apple!)

[BuzDots]

Originally Posted by AppleInsider

A slow-down in store openings would affect Apple in two ways ... it would reduce the Genius Bar service options for existing customers.

Well, not quite. You can't lose what you didn't have!

[city]

Apple is also expanding its reseller network. How much profit do they give up when they sell through a Best Buy?

[ouragan]

A great location for the next AppleStore in Canada would be Ottawa, the capital of Canada, and a prime location would be the Rideau Centre.

The Rideau Centre is located in the tourist downtown, 1 mile East from Parliament buildings, and house both a Sears and a Sony store. There was a planned expansion of Rideau Centre discussed 2 years ago, but it never materialized.

With the upcoming expansion of the Ottawa Congress Centre, an expansion or renovation of Rideau Centre is likely within the next 2 years.

Rideau Centre is an ideal location for an AppleStore. Last, but not least, Rideau Centre is located next to the University of Ottawa, in an area of the City where English Canadians mix with French Canadians who represent 25% of the population of Ottawa.

Let's hope that Apple builds a store in the upcoming expansion or renovation of Rideau Centre, Ottawa, Canada.

[city]

Originally Posted by ouragan

A great location for the next AppleStore in Canada would be Ottawa, the capital of Canada, and a prime location would be the Rideau Centre.

The Rideau Centre is located in the tourist downtown, 1 mile East from Parliament buildings, and house both a Sears and a Sony store. There was a planned expansion of Rideau Centre discussed 2 years ago, but it never materialized.

With the upcoming expansion of the Ottawa Congress Centre, an expansion or renovation of Rideau Centre is likely within the next 2 years.

Rideau Centre is an ideal location for an AppleStore. Last, but not least, Rideau Centre is located next to the University of Ottawa, in an area of the City where English Canadians mix with French Canadians who represent 25% of the population of Ottawa.

Let's hope that Apple builds a store in the upcoming expansion or renovation of Rideau Centre, Ottawa, Canada.

Isn't that just a big mall?

[wbrasington]

Originally Posted by solipsism

That is a pain! maybe by the next revision the keyboard buttons will be OLED so they can adapt to any language in any culture.

Maybe we need a version where the keyboard is all glass so the keys can be anywhere and say anything you want. You know.... kind of like a tablet.

[EauVive]

Originally Posted by silverpraxis

Online is the way to go in these countries, because I'm sure this problem occurs even in my home area of Southern California

Online is *very* frustrating. I have ordred my new MacBook Wenesday 15th on the Online store, I have to wait till the 31th for delivery. That's two weeks of frustration . If there were an Apple store in Paris, I'd bought it the very same day.

[silverpraxis]

Originally Posted by EauVive

Online is *very* frustrating. I have ordred my new MacBook Wenesday 15th on the Online store, I have to wait till the 31th for delivery. That's two weeks of frustration . If there were an Apple store in Paris, I'd bought it the very same day.

I agree, online purchases are frustrating. They should have at least one Apple Store in every country in Europe, if not just for branding purposes, on top of major 3rd party retail agreements.

[noirdesir]

Originally Posted by solipsism

That is a pain! maybe by the next revision the keyboard buttons will be OLED so they can adapt to any language in any culture.

Honestly, I can recommend everybody to take the time to follow through with a touch-typing excercise course (available in every bookstore or for sure also online). Once you can touch-type you won't care anymore what is printed on the keys.

[lukep]

Originally Posted by solipsism

Seriously though, I'm surprised that Paris doesn't have a half dozen Apple stores. France seems like an ideal place to start getting Macs into the bulk of Europe. Are there legal/copyright/openness issues that would keep Apple's Mac out of France?

They apparently wanted a place on Champs Elysées, which is the High Street in Paris. Real Estate there is absolutly thru the roof for the kind of space they wanted.

Caroussel du Louvre is also a great place, so maybe we will have finally one.

To be fair, they also have a store in store agreement with FNAC, which one of the biggest music/book/electronic retailer here. Those are quite nice and insure a good presence. Though they dont give the extended service a true apple store would.

A flagship store in Paris make sense, but I fear other towns will never see one.

[Security Man]

Check your leads, we have 3 Stores in Australia 1 in Sydney, 1 in Melbourne and 1 in Chatswood

[JeffDM]

Originally Posted by silverpraxis

After reading the comments, I'm glad others thought of keyboard localization as a problem with international brick and mortar establishments. Maybe this will be less of a hassle as Apple reduces packaging sizes for their products to allow more physical stock in retail locations, however display models will always be a problem in this area. Can you set up a French, Swiss, and German MacBook Pro side-by-side on the table without alienating someone?

Are there a lot of people that would be turned off by Apple trying to be that accommodating? To prevent confusion, I imagine posting a "language card" above the computer would make it easy to spot which ones are set up in your preferred language.

Online is the way to go in these countries, because I'm sure this problem occurs even in my home area of Southern California. Many people speak Spanish in my area, with uncomfortably little or no English skills, and there are no Apple Stores catering to that language. I'm sure Apple loses at least a few retail sales to that dilemma in it's home state. Internationally, with languages mixed so densely, it could present a large problem.

You do have a point. Also, Apple doesn't seem to offer a Spanish language web store for the US, if there is one, it's hidden pretty well. You can order a Mac with a Spanish keyboard, though I don't see a way to do it without having to use English to order it. Interestingly enough, there is a French and English store for Canadians, I wonder if that's only there because of Canadian language laws.

[Ireland]

Originally Posted by themoonisdown09

I would love it if they built an Apple store near me. The closest stores I have are Atlanta, Georgia (about 1.5 hours away) and Nashville, Tennessee (about 2 hours away).

At least there's 155 in your country, mine has zero.

[Ireland]

Originally Posted by fraklinc

I have 6 stores all within a 10 mile range in northern NJ and sometimes you can even see people waiting in lines for some stores to open in the morning, like if they where having a sale or something. don't know what Apple is doing but it looks like is working, specially with the economy standing where it is

Hum..

[Ireland]

Originally Posted by Rayz

Opening retail stores when the world was moving to online sales? How they laughed ....

I live in a world where it nice to see what the heck you're buying in person, especially when you're paying thousands. Not to mention that there's nowhere to go when you want the item fixed without an Apple store.

[Ireland]

Originally Posted by Security Man

Check your leads, we have 3 Stores in Australia 1 in Sydney, 1 in Melbourne and 1 in Chatswood

I think you've lost it. You do know who wrote this article right? He's the unofficial Apple store expert in the world. I think he'd know if there was three in OZ. Heck, I don't even pay attention and I know there's only one. Apple resellers and not Apple stores. We're talking the real stores actually owned by Apple, run by Apple employees, with the genius bar and the full 9. And yes, there's a difference.

[EauVive]

Originally Posted by noirdesir

Honestly, I can recommend everybody to take the time to follow through with a touch-typing excercise course (available in every bookstore or for sure also online). Once you can touch-type you won't care anymore what is printed on the keys.

I can touch-type, I can pretty much type a whole text without looking at any single key. Yet, there are special symbols like @^ or \ that I don't use so often. These one I have to locate visually on the keyboard (accessed through a special key combination). It is very confusing to press a key and see something else on screen.

Then, I can touch-type. But that rendereth the computer pretty useless for any person that does not, meaning nobody but me is going to be able to use it.

[Walter Slocombe]

Originally Posted by Ireland

At least there's 155 in your country, mine has zero.

Liar

http://www.apple.com/uk/retail/victoriasquare/

last i heard Belfast was in Ireland

an hour or so from Dublin via train.

[JeffDM]

Originally Posted by Walter Slocombe

Liar

http://www.apple.com/uk/retail/victoriasquare/

last i heard Belfast was in Ireland

an hour or so from Dublin via train.

Let's pull back on the hostility here.

Even with that store, he's still right. Belfast is in Northern Ireland, which is part of the United Kingdom, a different country. Even the link you provided has "UK" in it.

[EauVive]

Originally Posted by Walter Slocombe

Liar

http://www.apple.com/uk/retail/victoriasquare/
last i heard Belfast was in Ireland
an hour or so from Dublin via train.

Belfast is in Ireland, but not in Eire. That means going twice through the border and customs, and paying in a foreign currency since the Brits still stick to their pounds. As for the warranty, who knows?

[EauVive]

Originally Posted by JeffDM

Interestingly enough, there is a French and English store for Canadians, I wonder if that's only there because of Canadian language laws.

Most probably. Then remember French is spoken by 95 % of the Quebec inhabitants, almost 40 % in New-Brunswick and minorities here and there throughout Canada.

If Apple want to sell at least one MacBook in Montréal, it ought to be a "French"-localized model, and the online store has better be in French. Which is, anyway, no special effort, since they have to translate the English pages for all the French-speaking countries.

[ladytonya]

We need an Apple Store in Asheville, NC! Our closest store is over 2 hours away. This is a relatively large and growing city with a mid-major university, several other small colleges, and TONS of Apple users. I want to see a computer in person before I buy it, and the Genius Bar and classes offered in the stores are great! I have thought about driving to Charlotte to get my MB when I get the money together and figure out which one I'm buying. Asheville would be the PERFECT location for an Apple Store! Come on, Steve, give us one!

[trot2millah]

I feel bad for all of you....there's an Apple store in our outdoor mall, and I live in a suburb of 25,000 in Oregon :P

I say, with the way the market is, expand you're reselling and online operations. But opening up stores won't cause financial troubles like some people are saying.

[Walter Slocombe]

Originally Posted by JeffDM

Let's pull back on the hostility here.

Even with that store, he's still right. Belfast is in Northern Ireland, which is part of the United Kingdom, a different country. Even the link you provided has "UK" in it.

no hostility intended, it is simply an untruth to say that there are no Apple store shops on the island of Ireland.

All he claims he wants to do is to have a hands on, well one hour on a train would let him do that, WITHIN his own country (please lets not get into the politics of North/South) if he is unwilling to do that, then, well good luck to him, but please don't bitch and whine "thats not fair" I bet if he live(s/d) in Dublin and they opened a shop in Cork he'd be moaning as well.

SOMETIMES you really do gotta go to the mountain, other wise no meet up.

with Apples limited retail presence thats even more so.

been to the shop in Belfast myself, pretty nice, not a patch on the Regent street shop in London, but its a start. I really hope they plant a store in Dublin SOON, although I partly agree with why they havent up till now, COST, the prices in Dublin are crazy high, but with the economic bubble bursting, hopefully that might all change.

in the mean time, there IS a shop in Belfast, amazingly we even speak the same language, use the same electricity etc. and with the euro being a lot stronger than current years, it might be a good time to buy. but then, he just wants to look.

[Walter Slocombe]

Originally Posted by EauVive

Belfast is in Ireland, but not in Eire. That means going twice through the border and customs, and paying in a foreign currency since the Brits still stick to their pounds. As for the warranty, who knows?

errr...

I've been over the border more times than i could care to count, don't think I've ever met a "border patrol" or a "customs man" EVER.

the cross border trade is part of the culture either side of the border, northerners travel over for cheaper fuel, southerners travel over for food/clothes and its been that way for decades. no-one stops to ask questions because everyone does it.

Warranty is another matter, but then he DID say he only wanted to look.

oh yeah, and as above, the Euro is strong at the moment, so the brits having pounds "could" work to your advantage.