Analyst: Apple Could Sell Macs in Wal-mart

| Apple Stock Watch

Apple could eventually sell Macs at Wal-mart, according to Barclays Capital analyst Ben Reitzes. In a research note obtained by The Mac Observer, Mr. Reitzes told clients that Apple's success with the iPhone in Wal-mart could lead to "select Macs" being sold at the world's largest retailer, and that such an arrangement "Makes sense."

We believe Apple could eventually sell select Mac products in Wal-Mart stores," he wrote, "which could significantly increase distribution and unit shipments of Macs (starting with a pilot program)."

He added, while we don't expect an immediate impact this year and believe Apple would need to reposition its line-up first, we believe that closer ties to Wal-Mart make sense. We are already seeing more Apple accessories make their way onto Wal-Mart shelves after a successful launch of the iPhone."

Mr. Reitzes also believes that Wal-mart is actively pitching Apple to bring more of its products to the discounter's shelves. This is in keeping with Wal-mart's own efforts to boost its share of the electronics market, and to bring more high-end products to its stores.

"With Wal-Mart improving its retail displays," he wrote, "we believe that the mega-retailer could eventually earn the right to sell select Mac products without diluting Apple's brand (Wal-Mart is located in many rural areas not near an Apple store)."

While any agreement between Apple and Wal-mart would have to move slowly -- requiring a gradual start similar to Best Buy's reintroduction of Macs, and a direct sign-off from Apple COO Tim Cook -- Mr. Reitzes stated unequivocally that he felt, "Wal-mart would clearly benefit Apple."

Mr. Reitzes maintained his "Overweight" rating for AAPL, and his price target of US$155 per share.

In the afternoon trading session, shares in Apple traded at $128.94, up $2.29 (+1.81%), on moderate volume.

*In the interest of full disclosure, the author holds a small share in AAPL stock that was not an influence in the creation of this article.  

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Comments

Lee Dronick

Are there any numbers as to the percentage of iPhones sold at Wal*Mart?

I rarely shop there, there isn’t one convenient to me, but the few times I stopped in I didn’t see much activity at the iPhone display. I have been in three Wal*Mart stores in the San Diego Area and all of them had the iPhone display on an end cap along a main aisle, a prime location.

Another thing. My local Best Buy, which is a short walk from my house, carries Macs and iPhones. They have a lot of iPhone, and iPod, accessories, but little in the way of Mac programs. They might sell more Macs if they carried more software for them.

vince7

I can see Wal-mart selling some Mac gadgets but not computers.  That kind of product coupled with Wal-mart’s philosophy of lowest prices don’t mesh.

Another factor is the lack of qualified sales personnel and Mac “geniuses”.  Just think of the sales people in Best Buy who fudge it when it comes to the Mac.  In Wal-mart price leads.  So with that in mind the cost of an Apple computer will be the same no matter which retailer you shop with.  So no advantage for the Wal-mart shopper.

Can you imagine paying the $100 fee to schedule time with a Wal-mart “Mac Genius” for some 1:1 training?  Or better yet buy a Mac and then have the Wal-mart person upgrade the RAM or HD.  Plus you would have to show them where to stick the dongle.

The best solution for both parties is for Wal-mart to rent Apple floor space.  Now if Jobs would agree to a few Grand Opening appearances in some place you can’t find on a map or with a GPS?

Tiger

Vince7, you’re so right. Walmartians are NOT the target audience of Apple Computers. Other electronic devices, maybe. iPods and iPhones aren’t the big sellers at Walmart. The whopping $3 savings over the Apple Store or AT&T isn’t that huge a draw for buyers who then have to go home and activate it or go to the AT&T store anyway for an iPhone.

Apple isn’t looking to sell the computers to the masses. 25 years have shown us that. A nice, profitable niche is where the company is best stationed.

gslusher

My thoughts are more about Wal-Mart’s method of doing business. They seem to want to control everything, from the retail price to the distribution to the set-up in the store. That may not fit well with Apple’s business methods.

vince7

Thank you Tiger.  @gslusher, I didn’t take into account the control factor on Wal-mart’s part.  You are quite right.  This would be a marriage made in hell.

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