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Apple accounted for one-fifth of all US retail sales growth in Q1 2011

post #1 of 26
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Apple led U.S. retail growth in the first quarter of calendar 2011, accounting for a whopping 20 percent of all sales growth by publicly traded American retailers during the three-month period.

The data comes from retail sales expert David Berman, who told USA Today that he believes Apple's retail success is "mind-boggling." In the quarter which ended in March, Apple's U.S. sales saw an 80 percent increase by $4.6 billion.

"Total U.S. sales among public retailers, including auto parts dealers, Internet companies, and electronic retailers, grew by $23.2 billion in the first quarter, according to Berman's report," the story filed on Wednesday reads. "After Apple, the biggest chunk of U.S. sales growth came from Amazon.com and Wal-Mart stores."

During the three-month span to start 2011, Apple's retail sales were up 32 percent, and in-store revenue from Mac sales was up 90 percent. Revenue from retail stores was $3.18 billion, a year-over-year increase of 90 percent.

While the bulk of Apple's retail sales come from the U.S., where most of its stores are located, the international expansion of the iPhone maker's retail operations is playing an increasingly vital role. The company revealed in its last quarterly earnings call that international retail store volume now exceeds average U.S. store volume.

Apple plans to open a total of 40 new stores in fiscal 2011, with nearly three-quarters of those stores outside of America. One of those stores will be a new, massive two-story flagship shop located in Hong Kong.

While international expansion has become a priority, Apple also has big plans for its stores in the U.S. The company's flagship store on Fifth Avenue in New York City is currently under renovation, as the company is spending $6.7 million to replace the giant 32-foot glass cube that serves as an entrance to the underground retail store.

Apple's Upper West Side store in New York City is one of its largest in America.

It's only appropriate that Apple's retail operations lead growth in the U.S., as 2011 has been a year of milestones for the brick-and-mortar stores of the American company. In May, Apple celebrated the tenth anniversary of its retail operations by placing interactive iPad displays in its stores to provide product information, pricing and features.

The huge success Apple has seen in retail was spearheaded by Ron Johnson, who announced in June that he would leave Apple to become the new president and chief executive of J.C. Penney. The Cupertino, Calif., company is "actively recruiting" for his replacement.

But Johnson was not alone in plotting Apple's rise to the top of retail. One recent report from The Wall Street Journal revealed that even Apple CEO Steve Jobs pays close attention to his company's retail business, and was even said to be "poring over blueprints for future Apple stores" when he was in the hospital for a liver transplant.
post #2 of 26
The Apple Store pictured in the article is not the 5th Ave store.
post #3 of 26
The key word is sales "growth". It is not one-fifth of all sales. Very impressive none the less!

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post #4 of 26
Quote:
Originally Posted by AppleInsider View Post

...One recent report from The Wall Street Journal revealed that even Apple CEO Steve Jobs pays close attention to his company's retail business, and was even said to be "poring over blueprints for future Apple stores" when he was in the hospital for a liver transplant.


Can't imagine how many things Jobs has to "pore over". I keep thinking about how much of his time the Spaceship will occupy. Does he ever have time to listen to his iPod?
Emailing video from iPhone to Apple TV , sort of..
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post #5 of 26
Do I get to be the first to say it...

Apple. Doom.
post #6 of 26
Quote:
Originally Posted by walshbj View Post

Can't imagine how many things Jobs has to "pore over". I keep thinking about how much of his time the Spaceship will occupy. Does he ever have time to listen to his iPod?

"Pore" is now a verb?

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

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post #7 of 26
Quote:
Originally Posted by Suddenly Newton View Post

"Pore" is now a verb?

Only since the 13th century.
post #8 of 26
Quote:
Originally Posted by cvaldes1831 View Post

Only since the 13th century.

Oh SNAP!!!
post #9 of 26
Quote:
Originally Posted by bobrk View Post

The Apple Store pictured in the article is not the 5th Ave store.

Good catch...Its the Upper West Side Broadway store.
post #10 of 26
This is very distressing news. A couple of economists I've regularly listened to have been saying for two years that the US economy is not growing at all and will not be getting better any time soon. They've reported that the US government figures claiming that the economy is getting better, have been manipulated and are outright lies.

If one company can account for one-fifth of the nations sales growth then we certainly are doomed. I'm glad my job is with a school system in a non-teaching position. My job can't be consolidated or replaced by a machine.

Soon I'll be helping Apple's bottom line with a purchase. If only Apple would manufacture something in the USA we'd be better off. Then Apple could be the top manufacturer/ employer in the USA.
post #11 of 26
Quote:
Originally Posted by jd_in_sb View Post

The key word is sales "growth". It is not one-fifth of all sales. Very impressive none the less!

And growth is where profits roam.
post #12 of 26
Quote:
Originally Posted by Smallwheels View Post

This is very distressing news. A couple of economists I've regularly listened to have been saying for two years that the US economy is not growing at all and will not be getting better any time soon. They've reported that the US government figures claiming that the economy is getting better, have been manipulated and are outright lies.

If one company can account for one-fifth of the nations sales growth then we certainly are doomed. I'm glad my job is with a school system in a non-teaching position. My job can't be consolidated or replaced by a machine.

Soon I'll be helping Apple's bottom line with a purchase. If only Apple would manufacture something in the USA we'd be better off. Then Apple could be the top manufacturer/ employer in the USA.

The one I used to listen too started to suck, they just kept talking about the same thing over and over. I'd really like to check out a new one, which show/podcast have you been listening too? It sounds like they have the right idea..
post #13 of 26
Quote:
Originally Posted by Smallwheels View Post

This is very distressing news. A couple of economists I've regularly listened to have been saying for two years that the US economy is not growing at all and will not be getting better any time soon. They've reported that the US government figures claiming that the economy is getting better, have been manipulated and are outright lies.

If one company can account for one-fifth of the nations sales growth then we certainly are doomed. I'm glad my job is with a school system in a non-teaching position. My job can't be consolidated or replaced by a machine.

Soon I'll be helping Apple's bottom line with a purchase. If only Apple would manufacture something in the USA we'd be better off. Then Apple could be the top manufacturer/ employer in the USA.

i hope so too.


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post #14 of 26
Quote:
Originally Posted by Smallwheels View Post

This is very distressing news. A couple of economists I've regularly listened to have been saying for two years that the US economy is not growing at all and will not be getting better any time soon. They've reported that the US government figures claiming that the economy is getting better, have been manipulated and are outright lies.

If one company can account for one-fifth of the nations sales growth then we certainly are doomed. I'm glad my job is with a school system in a non-teaching position. My job can't be consolidated or replaced by a machine.

Soon I'll be helping Apple's bottom line with a purchase. If only Apple would manufacture something in the USA we'd be better off. Then Apple could be the top manufacturer/ employer in the USA.

It is good you are not in a teaching position. You do not understand the free capital economy that US is the master of the world.

Manufacturing these high tech devices require a lot of labor. To make them in US will raise the cost tremendously. If you think I am wrong, please name any PC or Android phone that is made in USA. Is your PC made in USA?
post #15 of 26
Quote:
Originally Posted by tzeshan View Post

It is good you are not in a teaching position. You do not understand the free capital economy that US is the master of the world.

Manufacturing these high tech devices require a lot of labor. To make them in US will raise the cost tremendously. If you think I am wrong, please name any PC or Android phone that is made in USA. Is your PC made in USA?

Have some pride. The USA has the largest manufacturing sector of any nation in the WORLD. Biggest in the world, get it? If we were somehow crippled by labor costs (read: better standard of living) then this would not be true. Sure some low skill work goes overseas, but there is no good reason that key comonents could not be made here, like the A5 chip.
We compete very well for auto manufacturing, and in hundreds of other industries. We make the high-end chips (Intel). We can do anything here and usually can do it better because we have an educated workforce of Americans.

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post #16 of 26
Quote:
Originally Posted by JONOROM View Post

Have some pride. The USA has the largest manufacturing sector of any nation in the WORLD. Biggest in the world, get it? If we were somehow crippled by labor costs (read: better standard of living) then this would not be true. Sure some low skill work goes overseas, but there is no good reason that key comonents could not be made here, like the A5 chip.
We compete very well for auto manufacturing, and in hundreds of other industries. We make the high-end chips (Intel). We can do anything here and usually can do it better because we have an educated workforce of Americans.

Your location 'People's Republic of Cambridge' says it all.

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post #17 of 26
Quote:
Originally Posted by mrarfarf View Post

...which show/podcast have you been listening too? It sounds like they have the right idea..

I read web sites and hear these people on radio programs that have many different types of guests.

Here are some people I listen to, though they aren't all economists; http://globaleconomicanalysis.blogspot.com/
http://www.trendsresearch.com/index.php
http://www.urbansurvival.com/
post #18 of 26
Quote:
Originally Posted by JONOROM View Post

Have some pride. The USA has the largest manufacturing sector of any nation in the WORLD.

Incorrect, that would be China.

Data (2010)

US GDP(PPP) 14,657B
US economy % industry 22.2%
US industry (PPP) 3,253BN

China GDP(PPP) 10,085B
China econmy % industry 46.8%
China Industry (PPP) 4,719BN

(sources WIki & CIA world factbook)
post #19 of 26
Quote:
Originally Posted by Smallwheels View Post

If one company can account for one-fifth of the nations sales growth then we certainly are doomed. I'm glad my job is with a school system in a non-teaching position. My job can't be consolidated or replaced by a machine.

I surely hope you're not teaching mathematics. It's very easy for a single large company to account for 20% of sales growth, or even 100% of sales growth, when sales growth is nearly flat. In fact the way that this analyst has done his calculation a company could even account for more than 100% of sales growth, which shows you how fundamentally flawed it is. Even in a market that is flat in total some participants are growing and some are shrinking.

It's not an indication of Certain Doom, just that Apple is bucking an economic trend.
post #20 of 26
Quote:
Originally Posted by Smallwheels View Post

If one company can account for one-fifth of the nations sales growth then we certainly are doomed. I'm glad my job is with a school system in a non-teaching position. My job can't be consolidated or replaced by a machine.

Soon I'll be helping Apple's bottom line with a purchase. If only Apple would manufacture something in the USA we'd be better off. Then Apple could be the top manufacturer/ employer in the USA.

What's going to doom us is not the continued decline in U.S. manufacturing. What is more likely to doom us is that we're willing to reduce teacher salaries and to lay-off teachers as if educating our kids is a luxury that we can't afford.

Apple is not going to manufacture in the United States because it would probably double or triple the price of the products. I believe that the average Chinese manufacturing worker makes about $130 per month. The Federal minimum wage is $7.25. That's over $1200 a month without any benefits whatsoever. But that doesn't include the portion of social security and Medicare that the employer contributes, which would add about another 8%. And the problem with minimum wage is that no primary wage earner can have a middle-class life earning minimum wage. So even at minimum wage, U.S. wage rates are at least 10x Chinese wages.

So the question becomes "how much manufacturing labor is built into the cost of each Apple product?" I don't know the answer to that question, but my estimate is that it would at least double and possibly triple what we're paying today, even though most of the internal components would probably still be manufactured in China. (They really wouldn't be manufactured here -- they'd be assembled here.)

The only way you'll see manufacturing return to the U.S. is when factories can be completely automated with robots, etc. But that won't provide permanent jobs to U.S. workers, since the robots will probably be manufactured in China.

Apple originally manufactured in the U.S. and later moved manufacturing to Ireland. I believe the 1987 Macintosh SE was still manufactured in the U.S. That machine (with a 9" monochrome screen and I believe only 128K of memory and a 20MB hard disk) retailed for $2898 or $5768 in 2011 dollars. Are you willing to pay that for your next laptop in order to help U.S. workers? I didn't think so. And that's the problem across the board. We all scream about there not being decent jobs for U.S. workers, but we want cheap music, cheap video and cheap electronics. We expect to be able to buy a DVD-drive for about the cost of a brick-oven pizza. On the other hand, people are willing to pay $200 to see a football game or for prime seats at a rock concert. So something definitely seems out-of-whack.
post #21 of 26
Quote:
Originally Posted by Realistic View Post

Your location 'People's Republic of Cambridge' says it all.

Yep, I am proud of my country and optimistic about what America and Americans can accomplish. If you think that is only a communist's attitude, you have real a problem.

People's Republic of Cambridge, in case you did not know, is the most common nickname for Cambridge MA and serves to distinguish it from Cambridge UK, with a little humor.

From Wikipedia: >Cambridge was ranked as one of the most liberal cities in America.[24] Its residents jokingly refer to it as "The People's Republic of Cambridge."[25] Its FY 2007 residential property tax rate, $7.48 per $1000 of assessed valuation, is one of the lowest in Massachusetts. Cambridge enjoys the highest possible bond credit rating, AAA, with all three Wall Street rating agencies.[26]<

We are doing something right in Cambridge, mostly having to do with creating lots of new knowledge and many good jobs for Americans. The City government's support for all that new biotech and other high-tech industry development here helps give us that low tax rate (and it IS very low for an older Northeast city), and thousands of new jobs that pay very well. A fan of Apple should appreciate that formula: new ideas=economic benefits - you should want the same for where you live.

But to avoid distracting people, I have changed my profile location.

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post #22 of 26
Quote:
Originally Posted by zoetmb View Post

What's going to doom us is not the continued decline in U.S. manufacturing. What is more likely to doom us is that we're willing to reduce teacher salaries and to lay-off teachers as if educating our kids is a luxury that we can't afford.

Apple is not going to manufacture in the United States because it would probably double or triple the price of the products. I believe that the average Chinese manufacturing worker makes about $130 per month. The Federal minimum wage is $7.25. That's over $1200 a month without any benefits whatsoever. But that doesn't include the portion of social security and Medicare that the employer contributes, which would add about another 8%. And the problem with minimum wage is that no primary wage earner can have a middle-class life earning minimum wage. So even at minimum wage, U.S. wage rates are at least 10x Chinese wages.

So the question becomes "how much manufacturing labor is built into the cost of each Apple product?" I don't know the answer to that question, but my estimate is that it would at least double and possibly triple what we're paying today, even though most of the internal components would probably still be manufactured in China. (They really wouldn't be manufactured here -- they'd be assembled here.)

ISupply says Apple pays Foxconn $7.10 to assemble an iPhone. As of June 2010 the average worker's salary at Foxconn was $293/month. Apple limits the workweek at Foxconn to 60 hours. So wages are roughly $1-2/hr. With equipment costs, overhead, profit, etc. the amount of assembly labor is likely around 2 hours for each iPhone.

A smartphone is not a labor-intensive product, so labor is not the huge factor that you suggest. Apple is not growing rice - they are building the most sophisticated consumer technology product ever. I believe that manufacturing the iPhone components must be one of the most capital-intensive efforts in the history of manufacturing. It is a shame that all that capital is being spent in Asia. And BTW we can make components competitively in the USA (see Intel).

So I think that this remains a legitimate topic of discussion - why manufacture in Asia and not the US? And the lower labor cost is not the only, or possibly even the primary, explanation.

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post #23 of 26
Apple has huge margins. It can afford to assemble things in the USA and earn a lesser profit to benefit the nation. If Apple is so glad to promote the greenness of its products, then it could also promote the Americanness of its products. It should do so to benefit the nation.

Apple says it makes great products that people want with the features people need. Well, they don't really make anything that people want with the features people need. They design the products and have Chinese people make the products that people want with the features that people need.

The largest segment of Apple employees is probably telephone support staff. What are they paid per hour?

According to iSuppli, AT&T's iPad 2 3G has about US$326.60 worth of parts, while the Verizon iPad 2 3G is slightly cheaper, at $323.35. Could Apple tack on two hours of American labor at the low rate of $12 per hour to the smallest iPad and still make a really big profit selling them at $499? Yes they can.

If anybody can forward this to Steve Jobs and get him to read it please do so.
post #24 of 26
Quote:
Originally Posted by JONOROM View Post

So I think that this remains a legitimate topic of discussion - why manufacture in Asia and not the US? And the lower labor cost is not the only, or possibly even the primary, explanation.

iSupply's estimate is just that, an estimate. Foxconn is on record as saying that their current profits are low because assembly of iPhones and iPads is more difficult than they anticipated. Probably need to up that estimate a bit.

Now by your own estimate the iPhone is around 4 man-hours work. Now consider that Foxconn workers aren't low-paid by Chinese standards, they're relatively well paid. So the equivalent hourly rate in the US would be what, $10/hour? $20? The additional labour cost could easily be $100.

Then there's the other advantages of siting your manufacturing in Asia.
  • Short supply lines to your principal suppliers
  • Access to the Chinese market
  • Access to multiple existing contract manufacturers.

You can site a satellite assembly line off in Brazil for example, but it only makes sense to do it there because of their crippling tariffs - which damages their economy in other ways.
post #25 of 26
Quote:
Originally Posted by Smallwheels View Post

If anybody can forward this to Steve Jobs and get him to read it please do so.

You can email him yourself, his email address is famously steve@apple.com

Knock yourself out
post #26 of 26
In other news, Microsoft is planning on opening 75 new stores over the next three years...
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