Apple retail store sales decline as consumers wait for new products

Posted:
in iPhone edited May 2014
Sales throughout Apple's vaunted retail empire have begun to decline as the company's distribution network widens and the product line matures, according to a new report, though the outlets remain massively profitable and serve as a "magnet" for new Mac buyers.




Same-store sales were down 5 percent in March after a 3 percent bump in December, data compiled by Needham analyst Charlie Wolf indicates. Wolf revealed the figures in a Monday morning note to investors, a copy of which was provided to AppleInsider.

Much of the problem, Wolf believes, stems from a lack of major new product introductions which traditionally drive consumers into Apple stores. The iPhone, for instance -- Apple's flagship -- is also sold in thousands of locations by the company's carrier partners, reducing Apple Store traffic.

"The sales performance of the Apple Stores is also hostage to the company's distribution strategies," Wolf wrote. "To illustrate, Mac sales in the stores were adversely impacted in 2009, when Apple broadened Mac distribution in the U.S., adding other chains, such as Best Buy, as resellers. iPod sales in the Apple Stores tanked when iPod demand caught up with supply and Apple responded by vastly increasing the number of outlets selling the product. Same-store sales have also been affected by the roll-out of the iPhone to carrier stores around the globe."

Accordingly, Wolf argues that same-store sales metrics may not be the most important indicator of the retail chain's success. Rather, the division's slice of Apple's overall revenue -- which has not fallen dramatically -- and its ability to attract new Apple customers are more important measures.




"Despite the dramatic expansion of Apple's distribution network to the stores of 250 carriers, the Apple stores have managed to almost hold their own as a percentage of total Apple revenues," the note reads. "This underscores the vitality of the Apple Stores in creating a shopping experience that we believe is superior to that in any other retail chain."

The service and support apparatus that Apple has built into the Apple Store is thought to be an important factor for those making the decision to switch from Windows-based computers to the Mac. The bank estimates that approximately half of the Macs sold in Apple Stores are to Windows switchers, who see the stores as the "face" of Apple.

Finally, Wolf thinks that incoming Apple retail chief Angela Ahrendts will help speed the company's retail growth in China, where fashion house Burberry enjoyed a significant amount of success under her leadership. The analyst is more skeptical about Ahrendts's ability to have a measurable positive impact on the chain overall, however, due to its dependence on the broader Apple product line.

"Nonetheless, what we think the trajectory of same-store Apple Store sales in recent years underscores is that meaningful growth must await the introduction of new products in new product categories," Wolf added. "Tim Cook has indicated that such products are on the way. However, it's an open question whether they can be the blockbuster hits that the iPod, iPhone and iPad were."
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Comments

  • Reply 1 of 90
    There's been a cumulative effect caused by the Browettization of Retail, lack of dedicated leadership once Browett departed, and all the (false) negative news spread about Apple, e.g., NYT disinfo, Mike Daisey, etc.
  • Reply 2 of 90
    macxpressmacxpress Posts: 5,172member

    Can't say I blame them. Seems like ever since the iPhone came out the Mac has been the redheaded stepchild. 

     

    Its nice to see rumors of OS X being the main focus of the keynote at WWDC. 

     

    I would like to see Apple Stores get a facelift. They've looked the same for too long and in my opinion, are getting long in the tooth as far as the design goes. Its a nice design don't get me wrong, but I think it could be better. The same basic design has been around since the first Apple Store. 

     

    It would also help if there were new products being brought into the store. People come to see the new products and when you have nothing new, nothing to see there so people just pass by unless they have an issue with your iOS device. 

  • Reply 3 of 90
    jameskatt2jameskatt2 Posts: 720member
    I want a new Retina MacBook Pro 15 to 17" with 32 GB RAM. So I'm waiting.
  • Reply 4 of 90
    daveinpublicdaveinpublic Posts: 627member
    Article says it may be ok because there slice of revenue hasn't gone down - dies that mean all apple revenue has gone down? Not good either way.

    I'm sure tim cook notices the dry spell in products/announcements. After saying 2013 would be chalk full of new products, I hope we get the products he was promising soon.
  • Reply 5 of 90
    saareksaarek Posts: 1,321member

    It's been a very boring start to the year, even by Apple's usual standards. I'm sure they'll get around to releasing new items by the fall, just be patient.

  • Reply 6 of 90
    arlorarlor Posts: 528member
    Quote:
    Originally Posted by daveinpublic View Post



    Article says it may be ok because there slice of revenue hasn't gone down - dies that mean all apple revenue has gone down? Not good either way.



    I'm sure tim cook notices the dry spell in products/announcements. After saying 2013 would be chalk full of new products, I hope we get the products he was promising soon.

     

    No, overall revenue's up every year quarter on quarter (although not as dramatically percentage-wise as during the 2009-2012 period). It's just that Apple Store revenue isn't growing proportionately quite as fast.

  • Reply 7 of 90
    gwmacgwmac Posts: 1,799member

    Apple needs to do more staggered releases throughout the year with a new introduction of a product every quarter if possible. Far too many times recently many new products are released at once and then most of the rest of the year nothing. If Apple releases multiple iPhone sizes for example the 5.5" might have more impact around April which is the time Samsung tends to release their new Galaxy. Fall for the smaller and Spring for the larger one would keep the excitement level up. 

  • Reply 8 of 90
    arlorarlor Posts: 528member
    Quote:

    Originally Posted by macxpress View Post

     

    Can't say I blame them. Seems like ever since the iPhone came out the Mac has been the redheaded stepchild. 


     

    And it's hard to blame Apple for that when you look at charts like this one (from Ars):

     

     

    Even the iPad -- which looked like it was on the same ever-rising trend as the iPhone up to early 2012 -- seems to be finding a rough plateau level, or at least a shallower growth curve. But, man, that iPhone: it's unstoppable. I think if Apple does realize a 5" or so model, they'll have the whole market (I know I would consider switching over from my Nexus 5, and new buyers won't hesitate even a second.)

  • Reply 9 of 90
    solipsismxsolipsismx Posts: 19,566member
    macxpress wrote: »
    Can't say I blame them. Seems like ever since the iPhone came out the Mac has been the redheaded stepchild.

    WHAT?! The Mac has never been better. In typical Apple fashion if Apple hadn't removed the ODD, moved to SSDs, or used Retina displays the rest of the "PC" industry would have never considered making this move. Then you have the design, construction, battery life improvements, and lowered price points. It's never been a better time to be a Mac user.


    PS: What are the origins of the "redheaded stepchild" comment? I wonder if ti's of late 19th or early 20th century origin where the Irish were still vilified in the US.
  • Reply 10 of 90
    wizard69wizard69 Posts: 13,377member
    macxpress wrote: »
    Can't say I blame them. Seems like ever since the iPhone came out the Mac has been the redheaded stepchild. 
    So true. It is rather sad too as they have the money to get new, innovative machines out the door. There was a time when Apple simply didn't have the resources to put into extensive Mac development.
    Its nice to see rumors of OS X being the main focus of the keynote at WWDC. 
    Considering all the issues we have with Windows at work I kinda wish for Apple to be conservative here and keep Mac OS reliable. The one nice thing about Mac OS is the lack of glitches and compatibility issues from one release to the next.
    I would like to see Apple Stores get a facelift.
    They need to be far bigger! At least the ones I've been in remind me more of an overcrowded watering hole than a retail computer store. Often the same strange characters occupy both places. ????????????????
    They've looked the same for too long and in my opinion, are getting long in the tooth as far as the design goes. Its a nice design don't get me wrong, but I think it could be better. The same basic design has been around since the first Apple Store. 
    You are also left with a poor shopping experience if you go there to pick up misc. items.
    It would also help if there were new products being brought into the store. People come to see the new products and when you have nothing new, nothing to see there so people just pass by unless they have an issue with your iOS device. 

    New products are a huge consideration. But old products need to present people with a positive value equation. Here the Mini is a perfect example of a machine that has grown sour sitting on the shelf way to long before an update or replacement. It is rather crazy to buy a Mini right now due to the rather old hardware in the machine.
  • Reply 11 of 90
    wizard69wizard69 Posts: 13,377member
    solipsismx wrote: »
    WHAT?! The Mac has never been better. In typical Apple fashion if Apple hadn't removed the ODD, moved to SSDs, or used Retina displays the rest of the "PC" industry would have never considered making this move. Then you have the design, construction, battery life improvements, and lowered price points. It's never been a better time to be a Mac user.

    Well yeah if you are a laptop users that may be the case. If you want a desktop the only truly new machine there is the Mac Pro which isn't a mainstream machine by any measure.

    Don't get me wrong I think the Mac is a great platform in a limited way, but it is a bit of a stretch to say the line up has never been better. I see it as rather stale myself.
  • Reply 12 of 90
    solipsismxsolipsismx Posts: 19,566member
    wizard69 wrote: »
    Well yeah if you are a laptop users that may be the case. If you want a desktop the only truly new machine there is the Mac Pro which isn't a mainstream machine by any measure.

    Don't get me wrong I think the Mac is a great platform in a limited way, but it is a bit of a stretch to say the line up has never been better. I see it as rather stale myself.

    1) Besides the amazing new Mac Pro the IMac and Mac mini are pushing amazing new boundaries, too. Who else eschewed SATA for PCIe SSDs? Who else considered using friction-stir welding in the iMac? What other small desktop PC is as power efficient as the Mac mini?

    2) I'll put any current Mac against other previous Mac you want. You tell me how the old Mac is better than the new Mac in its class.
  • Reply 13 of 90
    charlitunacharlituna Posts: 7,217member
    Some analyst does a report and misses the big ass detail that all retail drops after the holidays. December is the biggest shopping time of the year
  • Reply 14 of 90
    macxpressmacxpress Posts: 5,172member
    Quote:

    Originally Posted by SolipsismX View Post





    WHAT?! The Mac has never been better. In typical Apple fashion if Apple hadn't removed the ODD, moved to SSDs, or used Retina displays the rest of the "PC" industry would have never considered making this move. Then you have the design, construction, battery life improvements, and lowered price points. It's never been a better time to be a Mac user.





    PS: What are the origins of the "redheaded stepchild" comment? I wonder if ti's of late 19th or early 20th century origin where the Irish were still vilified in the US.

     

    Yeah sure, the MB line up gets updates. Not everyone uses laptops. The iMac is getting long in the tooth and has had the same ole design for what seems like forever. The Mac mini hasn't been updated in 2yrs. The MacPro was FINALLY updated after 2yrs up no updates. The standalone displays are old and outdated. Other than that, the Mac is fine. LOL. 

  • Reply 15 of 90
    solipsismxsolipsismx Posts: 19,566member
    macxpress wrote: »
    Yeah sure, the MB line up gets updates. Not everyone uses laptops. The iMac is getting long in the tooth and has had the same ole design for what seems like forever. The Mac mini hasn't been updated in 2yrs. The MacPro was FINALLY updated after 2yrs up no updates. The standalone displays are old and outdated. Other than that, the Mac is fine. LOL. 

    1) THE iMAC WAS REDESIGNED IN LATE 2012 AND ONLY ABOUT 18 MONTHS SINCE IT'S REALLY BEEN AVAILABLE AS THIS "COMPLETE LACK OF INNOVATION¡" WAS SIGNIFICANTLY HARDER FOR THEM TO PRODUCE.

    2) By far the majority of all "PCs" sold are notebooks. This isn't just a recent trend but one that started a long time ago. If you want as many notebook options as desktop options and for these to be updated as often then you don't understand how business works, but that's beside the point as they have been updated a lot more frequently than you've stated, they are best in class, and your comment made no qualification for having an issue with desktop Macs but rather all Macs.

    3) The only part of your comments that are valid is the ATD being outdated if you consider 1) it should be as thin as the current iMac, 2) potentially match the black anodized colour of the Mac Pro, and 3) could use a 4K UHD option, but let's not falsely attribute this to some anti-Mac objective or poor management by Tim Cook as Apple's displays have always been slow to update (as well as adjust their prices). If we get a 4K UHD display this year — within a year after both TB2 chips and 4K support was added to Mac OS X — then we're well ahead Apple's historical languid display update cycle.
  • Reply 16 of 90
    arlorarlor Posts: 528member
    Quote:

    Originally Posted by SolipsismX View Post





    THE iMAC WAS REDESIGNED IN LATE 2012 AND ONLY ABOUT 18 MONTHS SINCE IT'S REALLY BEEN AVAILABLE AS THIS "COMPLETE LACK OF INNOVATION¡" WAS SIGNIFICANTLY HARDER FOR THEM TO PRODUCE.

     

    Maybe he's disappointed that it doesn't do his dishes yet? I know I am. I bet Samsung will be the first to make a computer that also does dishes. Apple's so far behind this curve.

  • Reply 17 of 90
    macinthe408macinthe408 Posts: 1,050member
    Unfortunately for Apple, their release cycle is way too predictable. This is going to happen until they throw a curve ball and, for example, announce a television tomorrow.

    Tim Cook has been saying, "We have a bunch of exciting new products in the pipeline," for the last two years. An iPhone with Touch ID is not a "bunch"; that's one last time I checked. Unless he's counting processor speed bumps as "exciting new products."
  • Reply 18 of 90
    gwmacgwmac Posts: 1,799member
    Quote:
    Originally Posted by SolipsismX View Post

     


    PS: What are the origins of the "redheaded stepchild" comment? I wonder if ti's of late 19th or early 20th century origin where the Irish were still vilified in the US.

     

    Whatever the origin it is pretty offensive. I am not even a PC (as in politically correct) sort of person by any means but when you watch episodes on Southpark about gingers and Daniel Tosh for example you get the feeling all the racists/bigots who used to like to talk about other minorities and groups that can no longer safely get away with it now focus on red heads as a safe target. Growing up you get pretty sick and tired of hearing kids in elementary school say things like "I rather be dead than red on the head" and continuing to use that expression no doubt doesn't help. Adults have thicker skin but young children get taunted and bullied mercilessly. 

  • Reply 19 of 90
    masterz1337masterz1337 Posts: 128member
    The big problem is dumping everything in the fall and no summer iPhone release for me. People use to always talk and be buying apple products year round because things were being released year round. While with iOs devices, this makes more sense due to them wanting the latest A# chip complete for all products, its terrible for generating the hype apple use to have.

    Summer was the best time to release the iPhone, for my age range at least (18-23 was when we had summer iPhone releases), I can tell you up until the 4S came out, EVERYONE was picking one up in the summer, going out with it, taking pictures, and showing it to their friends. You can't get better publicity and that exposure than having your social device be seen at every social event in the summer. Now the iPhone comes out when a large majority of people are at school and staying indoors as it gets colder. No one gets together for the early morning releases, no one cares about the latest camera or having the latest accessory to show when they go out, its just another device people silently upgrade. Also many people I know break/lose/damage their phone in the summer shenanigans... but rather than upgrade to a new iPhone, they just pay money $100-$200 to get their old ones fixed.. and then see no need to spend the same money again just to upgrade.

    iPads in the spring was always a nice thing to have as well. People aren't going to feel the need to get a new phone and iPad in the fall, it's going to be one or the other. With the release of it in the fall, people are already spending money for the holiday season, students are already tight on cash, and people need to save up money for the holiday gift shopping season. I think there is also a psychological effect of "hey I just got an iPhone, I don't need another new toy so soon" yet. Also nothing seems to ever come out in the spring... another reason I liked the March/April release for iPad. It probably helps with inventory as well, to have no shortage in the holiday season and to be able to use valentines day to help start to clear inventory before the next wave of new devices.

    As far ss the iPods go, they may not be as important anymore, but releasing them in the fall is still a perfect time to release them as it keeps apple in peoples mind and they get a refresh as people start to head to the gym and such for the colder weather.

    The macs are fine on their rotating WWDC and fall schedules as well, as its nice to have them spaced out away from the other product launches in order to keep apple in peoples mind.


    I realize this won't apple to all people and locations, but this is what I have observed based on my experiences.
  • Reply 20 of 90
    macxpressmacxpress Posts: 5,172member
    Quote:
    Originally Posted by SolipsismX View Post





    1) THE iMAC WAS REDESIGNED IN LATE 2012 AND ONLY ABOUT 18 MONTHS SINCE IT'S REALLY BEEN AVAILABLE AS THIS "COMPLETE LACK OF INNOVATION¡" WAS SIGNIFICANTLY HARDER FOR THEM TO PRODUCE.



    2) By far the majority of all "PCs" sold are notebooks. This isn't just a recent trend but one that started a long time ago. If you want as many notebook options as desktop options and for these to be updated as often then you don't understand how business works, but that's beside the point as they have been updated a lot more frequently than you've stated, they are best in class, and your comment made no qualification for having an issue with desktop Macs but rather all Macs.



    3) The only part of your comments that are valid is the ATD being outdated if you consider 1) it should be as thin as the current iMac, 2) potentially match the black anodized colour of the Mac Pro, and 3) could use a 4K UHD option, but let's not falsely attribute this to some anti-Mac objective or poor management by Tim Cook as Apple's displays have always been slow to update (as well as adjust their prices). If we get a 4K UHD display this year — within a year after both TB2 chips and 4K support was added to Mac OS X — then we're well ahead Apple's historical languid display update cycle.

     

    The iMac still looks the same as it did before the thinness. All they did was make it thinner. I'm not dismissing that this wasn't easy, I'm just saying the overall design is the same from the front. It could use a facelift with something new. 

     

    I don't care if the majority of sales are notebooks, that doesn't mean you ignore the rest of the lineup. People still buy iMacs, Mac minis, etc. The Mac mini currently is shameful for what you get for the price. 

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