Merrill's Milunovich: Mac mini at Best Buy a "Logical" Step
First on TMO - Merrill's Milunovich: Mac mini at Best Buy a "Logical" Step
by , 6:30 AM EST, January 28th, 2005
&freq
Best Buy and Apple (AAPL) teaming up to sell the US$599 Mac mini is a "logical" step that "could accelerate the halo effect", Merrill Lynch analyst Steven Milunovich said Friday.
The Wall Street analyst told clients in a commentary released Friday that news of an agreement between Apple and electronics retailer Best Buy to sell the Mac mini could do nothing but help Apple.
Mr. Milunovich said a pilot program to sell selected Mac CPUs and 48 Best Buy stores ended last year for "undisclosed reasons," but that "the introduction of the new Mac Mini could be the catalyst for Best Buy and Apple to team up." He wrote that the success of Mac mini sales in Best Buy stores will depend on "showing how the Mac Mini connects to peripherals" and being demonstrated by experienced "Apple-badged or knowledgeable Best Buy reps."
He also wrote that "pushing Macs through Best Buy could accelerate the halo effect." Many analysts believe the iPod may be producing a "halo effect" on Apple's core Mac business, in which customers are lured to stores for the iPod but end up also buying Apple computers. Apple has given no definitive marketing evidence that a "halo effect" exists.
Mr. Milunovich said he could not confirm how many Best Buy stores would stock the Mac mini or when it would be available, as representatives of neither Best Buy or Apple would confirm or deny a marketing agreement had been finalized.
The Mac Observer reported earlier Friday that reliable sources had confirmed a deal had been made between the two companies and that all of Best Buy's 780-plus stores would be stocking the $599 Mac mini and $99 iPod shuffle sometime in the next 30 days.
Mr. Milunovich reiterated his "buy" rating on Apple stock "with a price objective of $85 per share."
Observer Comments
I'm sort of torn by this.
On one hand, there's a huge market out there that Best Buy has access to, and that can only be good for apple.
On the other hand, there's those Apple stores which have pretty knowledgable people and all kinds of accessories and lots of things to play with.
These stores are excellent!
The downside? There's only a hundred and some of them. There's a lot more Best Buys out there...
I dunno, I think Apple would be better off increasing their apple store numbers, but that's what "I" would want...
The reality as that Best Buy can sell tons of these things. If they show their already not the best sales staff that these little things can kick butt!
Fri Jan 28, 2005 12:23 pm Subject: Apple pushing Mac mini and shuffle through retails
Apple strategy is to attract traffic to retail stores. While the shipping dates for online is 1-4 weeks, customers can pick up Mac mini at retail store.
If Apple is willing to push through retail stores like Best Buy, it means either the margin of Mac mini is good or is willing to lower the margin for the sake of volume. With a cash hoard of $6.4 billion, Apple is being more aggressive in pushing products.
I think I read something that Apple would expect Best Buy to have either dedicated or specially trained staff to work the Apple area. Both companies are aware of the problem that stupid staff memebers create, so I am pretty sure they would prefer to solve the problem one way or the other.
QuoteAFCdtLoeb wrote:
This can work if the sales staff is amazingly knowledgeable. Judging by my experiences with Best Buy, however, that may be the biggest "if" of all time.
It's weird, at my Best Buy the people in SOME departments are great, but not others.
The digital camera guys and the people who know about business and tax software have always been great. The people selling TVs...not so much.
Anyway, my point is that it seems POSSIBLE for Best Buy to have knowledgeable people. They just need to figure out how to make it consistant.
Well, at my local CompUSA, the Apple section of the store features an Apple Rep on weekends. He is not an employee of CompUSA (not sure if he was freelance or employed by apple). This fellow was great, and I have gotten plenty of help and advice from him over the time he's been there.
If Best Buy could arrange for a type of representative like this it could really help.
Best Buy is one of the largest and most profitable electronics retailers in the U.S. They have stores everywhere. The average Joe consumer is not going to travel to an Apple Store but is much more likely to stop in to a Best Buy. Apple can only selling PCs in volume when they start selling them where the average person shops.
QuoteGuest wrote:
Best Buy is one of the largest and most profitable electronics retailers in the U.S. They have stores everywhere. The average Joe consumer is not going to travel to an Apple Store but is much more likely to stop in to a Best Buy. Apple can only sell PCs in volume when they start selling them where the average person shops.
This is right on the money. They should also get in to WalMart and Target stores. Assuming they can produce these machines in sufficient volume, they need to be mass marketed.
Quotetechnoguy100 wrote:
They should also get in to WalMart
According to Steve Jobs, hell's already frozen over once. Getting into WalMart would involve Apple opening its books and giving up profit margins, and somehow I doubt they're even slightly interested in that. WalMart's position is that no one but WalMart is allowed to make money. Frankly, I think Apple would be wise to not feed that particular beast.
Ha! Well, let me tell you something about the ignorance of the sales staff. After having my interest in Apple sparked by the Mac Mini, I went to my friendly Houston neighborhood Apple retail store to find out more. Actually, while there I became interested in the imac G5 20".
Well, I scheduled an appointment through their "Genious Bar" and hooked up with a Apple Retail Store Genious. What I got was some cheese eating high school kid with a mind full of chemicals. He went on and on about how he does not know anything about image editing as he's only a musician that uses his Apple for music production.
After 10 minutes of listening to his banter, surfer talk, and grunge opinions about the hardware he was marketing, I left with a bad taste for this Apple in my mouth.
Sorry Apple, you almost had me until this worm popped his little head from the rotten core.
Quoteyoyo52 wrote:
If you remember back to the days when BestBuy and Circuit City did carry Macs, you might also remember why you don't want these stores to sell Apple products beyond the iPod. The displays, the crashed computers, the ignorance of the sales staff--all of it was a big turn off.
How odd,
I walked into an
store just yesterday, and their were probably 3 or 4 "Geniuses" in there discussing issues.
They were helping out customers who had questions and were completely professional and courteous.
It reminded me of the way things used to, and SHOULD be when dealing with people.
I can't speak on your experience, but so far, mine in the apple stores has been excellent.
QuoteGuest wrote:
After 10 minutes of listening to his banter, surfer talk, and grunge opinions about the hardware he was marketing, I left with a bad taste for this Apple in my mouth.
Sorry Apple, you almost had me until this worm popped his little head from the rotten core.
QuoteYou just bite the dust. Rumor is going around that Apple and Walmart are joining forces to sell iPod shuffle. AAPL had charged all the way to all-time high closing price of $73.98 today.Steve W wrote:Quotetechnoguy100 wrote:
They should also get in to WalMart
According to Steve Jobs, hell's already frozen over once. Getting into WalMart would involve Apple opening its books and giving up profit margins, and somehow I doubt they're even slightly interested in that. WalMart's position is that no one but WalMart is allowed to make money. Frankly, I think Apple would be wise to not feed that particular beast.
Sat Jan 29, 2005 9:58 am Subject: Bad service at Apple store
QuoteGuest wrote:
Well, I scheduled an appointment through their "Genious Bar" and hooked up with a Apple Retail Store Genious. What I got was some cheese eating high school kid with a mind full of chemicals. He went on and on about how he does not know anything about image editing as he's only a musician that uses his Apple for music production.
Did you talk/complain to the manager? That's the best way to get improved service. It helps to be an active customer, rather than a passive one. (FWIW, it's "genius," not "genious.")
QuoteMace wrote:QuoteYou just bite the dust. Rumor is going around that Apple and Walmart are joining forces to sell iPod shuffle. AAPL had charged all the way to all-time high closing price of $73.98 today.Steve W wrote:Quotetechnoguy100 wrote:
They should also get in to WalMart
Frankly, I think Apple would be wise to not feed that particular beast.
How good is the rumor? I still think Apple would be wise to tell WalMart to go to hell. The iPod Shuffle might be sufficient inducement to WalMart that they'll forego their usual scorched-earth approach to pricing, at least temporarily, but I wouldn't count on that for long. They'll get their tentacles in there and start trying to force Apple to do it the "WalMart way," which would be disastrous.
QuoteNo idea. If this rumor is true, I would expect Walmart to drop their download service or Apple will license FairPlay to them. Someone estimated that profit margin of shuffle is 60% for selling online and 30% through retail channel. So, Apple still make a decent profit selling through Walmart.Steve W wrote:QuoteMace wrote:QuoteYou just bite the dust. Rumor is going around that Apple and Walmart are joining forces to sell iPod shuffle...Steve W wrote:Quotetechnoguy100 wrote:
They should also get in to WalMart
Frankly, I think Apple would be wise to not feed that particular beast.
How good is the rumor? ...
IMHO: It makes business sense to sell through Walmart only if Apple plans to produce more low cost consumer electronics products in the future. Licensing FairPlay is more of an issue of timing and who to license to. Apple has been selective in licensing iPod technologies.
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