Apple Store visitor figures show iPhone, iPad and Mac 'on a roll' - report

Posted:
in iPad edited January 2014
As Apple's retail store initiative is set to turn 10 years old later this month, revenue at the company's brick and mortar stores continues to soar as visitors flock to Apple Stores to try out the iPad.



In the recent March quarter, Apple saw its retail store revenue growth outpace overall revenue growth. The Cupertino, Calif., company posted $3.19 billion in revenue from retail stores, an increase of 90 percent, compared to overall revenue growth of 86 percent.



During the company's quarterly earnings call, executives revealed that, at the close of the quarter, Apple had a total of 323 stores worldwide and was expecting its 1 billionth retail visitor "in the coming days."



The Mac maker will celebrate the 10th anniversary of its retail stores on May 19. Sources indicated to AppleInsider last month that the company may be planning a commemorative event for the occasion, as retail employees have been informed that they will not be allowed to take vacation during the days between May 20 and May 22.



Apple Retail has come a long way since the opening of its first stores in May 2001, and with a total of 40 new stores anticipated in fiscal 2011, Apple's retail successes appear set to continue indefinitely.







However, even given Apple Retail's phenomenal growth curve, Apple Stores around the world find themselves pressed for space. According to the company's annual 10-K filing with the SEC last year, Apple leased 2.5 million square feet of retail building space, roughly 7886 square feet per store.



As the growing number of visitors has quickly outpaced the number of new locations, Apple Stores have become increasingly crowded in recent years, especially in China. Apple's four retail stores in China are, on average, the highest trafficked and highest revenue stores worldwide for the company. Apple has planned an aggressive expansion path for Apple stores in China. The company plans to have a total of 25 retail stores operating in the country within the next few years.



Apple Stores by the numbers



According to Needham & Co analyst Charlie Wolf, Apple stores accounted for 12.9 percent of the company's worldwide revenues in March, up slightly year over year, but down from a high of 21.6 percent in the second quarter of 2008. That decline is presumably due to increased distribution points, such as international carrier stores and big-box retailers, for iPhones, iPods and, more recently, iPads. However, Apple stores' share of worldwide Mac revenues has held steady at around 20 percent in recent years.







In a note to clients sent Tuesday, Wolf wrote that retail seasonality and non-Mac product cycles have caused irregularities in the growth metrics used to track Apple retail stores. Instead of quarterly revenue estimates, Wolf poses visitors per store figures as a more reliable metric.



By comparing the four-quarter moving average visitors per store, Wolf demonstrates that Apple retail stores have seen retail visitor spikes for each of its post-PC products: the iPod, the iPhone and the iPad. A significant rise in the number of visitors per store in 2006 correlates with the height of the "iPod craze," Wolf said, while another spike in visitors in 2008 stemmed from the popularity of the iPhone. Finally, a third rise in visitors that began in the third quarter of fiscal 2010 can be attributed to the release of the iPad.







According to Wolf, comparing same-store annual visitors smooths irregularities so that the Apple retail growth curve becomes clear. Wolf asserts that, since Apple's revenues per retail store visitor have hovered around $40 to $50 annually, tracking the number of visitors can work as a proxy for same-store sales growth.







With Apple's iPhone halo effect driving "turbocharged" international Mac and iPad sales and an accelerating shift to international retail stores, Wolf believes Apple Store revenues will "continue on a roll." He maintains a buy rating and price target of $450 for the company's stock.
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Comments

  • Reply 1 of 32
    jmmxjmmx Posts: 341member
    As you can see - all those analysts who predicted back in 2001 have been prove correct! The Apple store is a complete and utter failure. Steve Jobs, just do us all a favor - pay off the stockholders and give up!
  • Reply 2 of 32
    jmmxjmmx Posts: 341member
    Quote:

    The Cupertino, Calif., company posted $3.19 billion in revenue from retail stores, an increase of 90 percent, compared to overall revenue growth of 86 percent.



    That extra 4 percentage points is easily explained by an increase in the nuber of store. What was the growth in averag same-store sales? (Also up I believe)
  • Reply 3 of 32
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by jmmx View Post


    As you can see - all those analysts who predicted back in 2001 have been prove correct! The Apple store is a complete and utter failure. Steve Jobs, just do us all a favor - pay off the stockholders and give up!



    Of all the things the “expert” get wrong this one I let slide. From their PoV the Dell kiosks and Gateway stores (that only had demos not actual products) and high end Sony stores (lucky to end the year in black) covered all the ways in which Apple could operate and therefore left no window for success Apple could use to their advantage. There was no precedence for this.



    I thought this had a good chance of succeeding because prior to the Apple Store it was difficult for potential customers to try a Mac and ask needed questions. Sure there we some stores with a small table listing some, often out of dat Macs that may or may not be working. What I didn’t know is how much of n effect the Stores would have for adoption and how quickly they would grow to be the largest retailer by sq. foot in the world.





    PS: In case some aren’t aware, Apple stopped requiring a 10% restocking fee for items a month or two ago. So, if yo are expecting expecting a new Mac in a few weeks but need a Mac now it’s not a bad move to buy now and then return it if the new Mac appears. with that 14 day time frame.
  • Reply 4 of 32
    sipadansipadan Posts: 107member
    Quote:
    Originally Posted by AppleInsider View Post


    Apple's revenues per retail store visitor have hovered around $40 to $50 annually



    This is gold, Jerry, GOLD!!
  • Reply 5 of 32
    irnchrizirnchriz Posts: 1,588member
    A visit to my kitchen just showed that Im having tuna on a roll..
  • Reply 6 of 32
    lkrupplkrupp Posts: 7,101member
    Quote:
    Originally Posted by jmmx View Post


    As you can see - all those analysts who predicted back in 2001 have been prove correct! The Apple store is a complete and utter failure. Steve Jobs, just do us all a favor - pay off the stockholders and give up!



    There are tons of pundits and analysts who've had to eat crow over the last decade or so re Apple. John C. Dvorak has had egg on his face for so long he looks like an omelet. To be kind they make their predictions based on "normal" business wisdom and history. They don't get that Apple marches to the beat of their own drum. As a long time Apple customer I knew from day one that the retail stores would succeed because I had been waiting for them for almost twenty years and I knew I wasn't alone. From Best Buy to the defunct CompUSA, from local mom and pop resellers to the furniture/appliance/electronics warehouse stores, none of them represented Apple properly. Many of them weren't particularly interested in the first place. What a difference a decade makes.
  • Reply 7 of 32
    kibitzerkibitzer Posts: 1,113member
    Quote:
    Originally Posted by lkrupp View Post


    John C. Dvorak has had egg on his face for so long he looks like an omelet.



    Thus confirming the assertion that Dvorak's brain was scrambled a long time ago and then fried.
  • Reply 8 of 32
    MacProMacPro Posts: 18,260member
    Can we have an update on the history and success (?) of the Microsoft Stores please? Just out of curiosity and for comparison. I'd love pictures of the stores inside and out, sales data and growth graphs too.
  • Reply 9 of 32
    MacProMacPro Posts: 18,260member
    Quote:
    Originally Posted by lkrupp View Post


    There are tons of pundits and analysts who've had to eat crow over the last decade or so re Apple. John C. Dvorak has had egg on his face for so long he looks like an omelet. To be kind they make their predictions based on "normal" business wisdom and history. They don't get that Apple marches to the beat of their own drum. As a long time Apple customer I knew from day one that the retail stores would succeed because I had been waiting for them for almost twenty years and I knew I wasn't alone. From Best Buy to the defunct CompUSA, from local mom and pop resellers to the furniture/appliance/electronics warehouse stores, none of them represented Apple properly. Many of them weren't particularly interested in the first place. What a difference a decade makes.



    John C. Dvorak. There is a name from the past! Didn't he once have a well respected column in a Mac magazine, MacWorld I seem to recall, a decade before he went all keyboard on us?
  • Reply 10 of 32
    MacProMacPro Posts: 18,260member
    Quote:
    Originally Posted by solipsism View Post


    Of all the things the “expert” get wrong this one I let slide. From their PoV the Dell kiosks and Gateway stores (that only had demos not actual products) and high end Sony stores (lucky to end the year in black) covered all the ways in which Apple could operate and therefore left no window for success Apple could use to their advantage. There was no precedence for this.



    I thought this had a good chance of succeeding because prior to the Apple Store it was difficult for potential customers to try a Mac and ask needed questions. Sure there we some stores with a small table listing some, often out of dat Macs that may or may not be working. What I didn’t know is how much of n effect the Stores would have for adoption and how quickly they would grow to be the largest retailer by sq. foot in the world.





    PS: In case some aren’t aware, Apple stopped requiring a 10% restocking fee for items a month or two ago. So, if yo are expecting expecting a new Mac in a few weeks but need a Mac now it’s not a bad move to buy now and then return it if the new Mac appears. with that 14 day time frame.



    Apple did in fact have a model from their own past to look to. If you had ever visited an 'Apple Centre' back in the 1980's during the years of DeskTop Publishing success you'd have seen a precedent. These were very special dealerships selected by Apple UK and all with the same Apple / Bang & Olufsen designed interiors and all the same throughout Britain to ensure the corporate look. They looked amazing! They all came with large training area, highly qualified trainers and certification courses in various applications, sales and demo areas and workshops. We also had a 'genius' bar, or rather station in our case where any client could pop in or make an appointment to get help or advice. There was also a bureau service where type setting, film output or simply access to a laser printer were available. Ours even had a café upstairs where sales staff could close a deal over a coffee and the view of the city. They were a huge success for a while. Many were in modern structures, ours was in a old stone architecturally significant building with the interior gutted and shop-fitted by Apple.



    Their downfall was brought about by several factors back then. Not least of which was lousy management at Apple (no SJ in this era) and Aldus Pagemaker and Adobe both making the previously Mac only products available on PCs which by then had mice and GUIs and a ripped of version of MacOS. The other issue was each was privately owned and not always managed or funded well. In hind sight Apple should have taken a management and financial stake in each one, but that's just MHO. A few kept going to this day I believe although I have not been in the UK for over 20 years so I know not if they morphed into other entities. In the end, the near demise of Apple by the late 1980's early 1990's finally killed most of them off.



    Ours was visited by Sculley and many senior Cupertino folks during the good times and I am sure the concept and model was at the back of Apple's mind when the new versions emerged. The lessons and mistakes made back then were all no doubt heeded the second time around. Now, Apple also has so many more consumer oriented products of course and Apple had SJ and the wind at their backs. The rest, as they say, ... is history.
  • Reply 11 of 32
    zoetmbzoetmb Posts: 2,449member
    Quote:
    Originally Posted by lkrupp View Post


    There are tons of pundits and analysts who've had to eat crow over the last decade or so re Apple. John C. Dvorak has had egg on his face for so long he looks like an omelet. To be kind they make their predictions based on "normal" business wisdom and history. They don't get that Apple marches to the beat of their own drum. As a long time Apple customer I knew from day one that the retail stores would succeed because I had been waiting for them for almost twenty years and I knew I wasn't alone. From Best Buy to the defunct CompUSA, from local mom and pop resellers to the furniture/appliance/electronics warehouse stores, none of them represented Apple properly. Many of them weren't particularly interested in the first place. What a difference a decade makes.



    I've worked with Apple computers since 1980, have always been a fan (even during the bad times) and always knew they would ultimately be successful, but even I thought the retail stores were largely unnecessary and would be a failure, especially in large cities where there was an existing network of dealers already selling Apple. And I say this even though I recognized that most (but certainly not all) retail did a lousy job of presenting Apple to consumers. (To be fair, Apple has had a history of screwing their dealers.) But I was (obviously) very wrong about Apple's retail success. Although one of the reasons the stores are successful is because Apple's margin to third-party dealers is so small and their control of pricing is so strong, no one can undercut them on price, which is not usually the case with other brands. And yet, in spite of Apple's retail success, part of which must be attributed to the fact that you can actually use the computers and other products, when you walk into other retail, chances are the computers are locked and you can't do much of anything but stare at the screens.



    As for Mr. Dvorak, although it's been some years since I've bothered to read his ravings, he has hated Apple since the beginning and was consistently wrong for just as long. Since I no longer read him, I don't know if he's changed his tune, but has he ever admitted to Apple's great success?



    I understand that Sony is starting to revamp their retail stores. Who wants to bet they start looking a lot more like Apple stores? The funny thing about the Apple stores is that the model now seems so obvious, yet, no one seems to be able to effectively copy it.
  • Reply 12 of 32
    I am also curious about how the Microsoft store(s) are doing and think it deserves a comment in the story since Microsoft's goal was to copy Apple's success (nothing new there).



    How many are there now? What kind of traffic do they receive? What products do they sell (a particular brand of pc).? Do they have a genius bars? And, finally, if so, how good are they at supporting the mishmash of software/hardware configurations?
  • Reply 13 of 32
    xsuxsu Posts: 401member
    Quote:
    Originally Posted by digitalclips View Post


    John C. Dvorak. There is a name from the past! Didn't he once have a well respected column in a Mac magazine, MacWorld I seem to recall, a decade before he went all keyboard on us?



    I read him a long time ago on PC World, or was it PC Magazine? Anyway, he sounded pretty resonable back then. Of course, I was just getting into college, so I could have been easily fooled.
  • Reply 14 of 32
    john galtjohn galt Posts: 959member
    Lest we forget:



    Sorry, Steve: Here's Why Apple Stores Won't Work



    Quote:
    Originally Posted by digitalclips View Post


    John C. Dvorak. There is a name from the past!



    Ah, John C. Dvorak, one of my favorite experts.



    Apple is switching to Windows



    Blogs are dead



    and my favorite,



    Apple should pull the plug on the iPhone



    He's been so wrong for so long he should change his name to Qwerty



  • Reply 15 of 32
    MacProMacPro Posts: 18,260member
    Quote:
    Originally Posted by xsu View Post


    I read him a long time ago on PC World, or was it PC Magazine? Anyway, he sounded pretty resonable back then. Of course, I was just getting into college, so I could have been easily fooled.



  • Reply 16 of 32
    MacProMacPro Posts: 18,260member
    Quote:
    Originally Posted by john galt View Post


    Lest we forget:



    Sorry, Steve: Here's Why Apple Stores Won't Work







    Ah, John C. Dvorak, one of my favorite experts.



    Apple is switching to Windows



    Blogs are dead



    and my favorite,



    Apple should pull the plug on the iPhone



    He's been so wrong for so long he should change his name to Qwerty







    Oh my sides are aching. Thanks for the laughs. He should be an instant 'Your Hired' for Trump with his insights.
  • Reply 17 of 32
    ...seems to be the underlying punditry when comes to Apple. There is a profound misunderstanding of what Apple is doing by most "experts". Understandable since it seems to exemplify a paradigm shift (ala Thomas Kuhn). Now of course - ten years later and a huge spat of failure predictions from not just technology pundits, but retail pundits as well - the Apple retail model is a classic reference point in advanced degree business/marketing programs. "Thinking different" is the problem. Without engaging in excessive speculation, it appears that Apple has done a good job of capturing a mainstream consumer profile that successfully drives not just product development but the delivery of product via both b&m and virtual storefronts.



    The continuing discussions in fora like this demonstrate how well they have captured this - we who are technology people often complain about Apple not meeting our particular needs in some of their decision-making on device config. Likewise, the retail operations demonstrate fairly certainly that Apple has in the person of Ron Johnson (and his management team) yet another example of solid executive leadership, just like that of Tim Cook, Phil Schiller, Jony Ive, Pete Oppenheimer, Scott Forstall and Bruce Sewell. Apple has an incredible stable of executive powerhouses driving their operations.
  • Reply 18 of 32
    matrix07matrix07 Posts: 1,993member
    Quote:
    Originally Posted by zoetmb View Post


    I don't know if he's changed his tune, but has he ever admitted to Apple's great success?




    He did and he has. Reading him now one would think he thought Apple can do no wrong. Maybe he's tired of being wrong?
  • Reply 19 of 32
    onhkaonhka Posts: 1,025member
    Quote:
    Originally Posted by lkrupp View Post


    There are tons of pundits and analysts who've had to eat crow over the last decade or so re Apple.



    Unfortunately, there are a lot more trolls here that aren't smart enough to change their diet.
  • Reply 20 of 32
    robin huberrobin huber Posts: 3,264member
    Apple Stores are one more reason for Apple's continued launch-and-succeed phenomenon. Competitors scratch their heads and continue to pump out feature-trumping copy cat devices. The Apple interconnected ecosystem, in which the brick-and-mortar stores are central, makes such efforts largely futile. The only real competition is among the competitors--for sloppy seconds.



    At this point only Amazon and Google have any chance, if they have the patience, to develop a competing ecosystem over time. But the relentless drive for short term profit works against them.
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