Spaceship Apple Comes Down To Earth

  • Posted: 20 October 2011 02:17 AM #61

    mbeauch - 20 October 2011 03:34 AM
    IIe programmer - 20 October 2011 03:13 AM

    Perhaps Macorange deserves the benefit of the doubt after four years.

     

     

    IIe, thank you for giving me a good post to go away again. If anyone here “deserves” the benefit of the doubt, it is DT. This forum does not deserve DT’s hard work. He does a job that none of you will undertake. He does not get paid by the Mac Observer and I know I would not do it, I would ban half of you.  :-D

    I don’t understand why you see the two as mutually exclusive.  Can we not be charitable toward both MO and DT?

    It also seems to me a stretch that you would want to ban me just because I suggest that a long time member’s remark may have been without malice.

    Maybe I’ll ban myself and spare you.  After all you contribute much more than I do, and you are so loved by everyone here.

         
  • Posted: 20 October 2011 02:28 AM #62

    From the FQ4 2010 conference call:

    “We opened 24 stores during the September quarter, 16 of which were outside the United States, including spectacular stores in Beijing, Shanghai, London and Paris. Our new Beijing and Shanghai stores opened on the last day of the quarter, and first-day sales from both stores exceeded all previous store openings. Our four China stores are our highest traffic stores in the world and are among our highest performing.

    We also entered our eleventh country, with the opening of stores in Barcelona and Madrid. That brings us to a total of 317 stores worldwide as at the end of the quarter, with 84 of them outside the United States. With an average of 301 stores opened during the September quarter, average revenue per store was $11.8 million compared to $7.8 million in the year-ago quarter, an increase of 52%.”

    301 stores on average were open in the FQ4 2010.

    From yesterday’s conference call:

    “We opened 30 new stores in the quarter, 21 of which were outside United States. On the last weekend of the quarter, we opened 7 stores in 6 countries, including our first store in Hong Kong. With our highest opening day for Mac sales ever, our Hong Kong store joins our 5 other China stores as the highest traffic and among our highest revenue stores in the world. We ended the quarter with a total of 357 stores. With an average of 336 stores opened, average revenue per store was $10.7 million compared to $11.8 million in the year-ago quarter.”

    336 stores on average in the quarter. That’s about a 12% increase in the number of stores open, 25% Mac unit sales growth in the quarter and 1% growth in revenue in the quarter including the revenue contributions from the new stores.

    Remove the China stores from the mix and a different picture begins to develop. This is by no means dire, but it does reveal challenges. It’s no wonder Apple is remodeling older stores and moving the bulk of new store openings overseas.

         
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    Posted: 20 October 2011 02:39 AM #63

    I was somewhat mixing my metaphors with sequential store openings and YOY iPhone 4 vs. no new iPhone sales.  Whoops.

    Apple’s remodeling but also expanding some stores.  This will help somewhat.

    It might also be instructive to note the worldwide economic mood.  And in the US, retail sales in general were flat to very slightly up. 

    Don’t underestimate the effect of a stale iPhone.  Every Apple Store in Q4 2010 was packed with people waiting in very long lines for an iPhone.  No such thing this year, which makes the compare very tough, as Oppenheimer said.  I really do think the launch/initial sales factor really skewed the results.

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  • Posted: 20 October 2011 03:28 AM #64

    Mav - 20 October 2011 05:39 AM

    I was somewhat mixing my metaphors with sequential store openings and YOY iPhone 4 vs. no new iPhone sales.  Whoops.

    Apple’s remodeling but also expanding some stores.  This will help somewhat.

    It might also be instructive to note the worldwide economic mood.  And in the US, retail sales in general were flat to very slightly up. 

    Don’t underestimate the effect of a stale iPhone.  Every Apple Store in Q4 2010 was packed with people waiting in very long lines for an iPhone.  No such thing this year, which makes the compare very tough, as Oppenheimer said.  I really do think the launch/initial sales factor really skewed the results.

    There’s been a change in the amount of 3rd party product available at the stores and in the US saturation (or diminishing gains) from new stores may be an issue. New store growth will be mostly overseas.

    The iPhone is one factor. But the retail store performance is influenced by more than the iPhone.

         
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    Posted: 20 October 2011 03:36 AM #65

    Lucky for me, I’m happy with the Apple Retail Store choices available in the US. 

    Apple’s growth future is opening as many stores in China as humanly possible. 

    I’m not too worried about Apple retail growth slowing (I think iPhone 4S will help a TON with this, as will the inevitable iPhone 3 and iPhone 5 after that).  Apple Stores are actually not really “intended” for max sales.  It just happens that shoppers like the soft-sell approach and environment so much that they help outsell every retailer in history in sales per square foot.  They’re brick-and-mortar halos for the Apple brand that are more than profitable and self-sustaining.  And with the continuous excitement and influx of new and new-to-Mac visitors, Apple’s retail employees should be kept suitably engaged to keep the retail machine running smoothly for decades to come.

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  • Posted: 20 October 2011 03:44 AM #66

    Mav - 20 October 2011 06:36 AM

    Lucky for me, I’m happy with the Apple Retail Store choices available in the US. 

    Apple’s growth future is opening as many stores in China as humanly possible. 

    I’m not too worried about Apple retail growth slowing (I think iPhone 4S will help a TON with this, as will the inevitable iPhone 3 and iPhone 5 after that).  Apple Stores are actually not really “intended” for max sales.  It just happens that shoppers like the soft-sell approach and environment so much that they help outsell every retailer in history in sales per square foot.  They’re brick-and-mortar halos for the Apple brand that are more than profitable and self-sustaining.  And with the continuous excitement and influx of new and new-to-Mac visitors, Apple’s retail employees should be kept suitably engaged to keep the retail machine running smoothly for decades to come.

    You have your view. I see challenges revealed in the recent quarterly numbers. The retail stores deliver better margins than products sold through 3rd parties. Expanded distribution may reduce gross margins and the stores are heavily dependent on new products.

         
  • Posted: 20 October 2011 09:12 AM #67

    Roman - 20 October 2011 02:15 AM
    Prazan - 20 October 2011 12:41 AM

    Horace Dediu at Asymco explains his iPhone miss in his usual insightful way:

    http://www.asymco.com/2011/10/19/how-did-i-get-the-iphone-number-so-wrong-part-ii/

    Interesting. Horace still thinks 100% unit growth and that, product cycle notwithstanding, it’s a supply-constrained rather than demand-constrained issue. Gregg (I think?) mentioned softening demand, entirely different take.

    Tweren’t me.  :  )

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    Posted: 20 October 2011 09:36 AM #68

    We got some additional color on the decrease in iPhone sales or the delay impact.  If look at ATT Q3 2010 iPhone 4 launch qtr 5.2M iphones compared to today’s results

    NEW YORK (AP)—AT&T Inc. on Thursday reported a decline in the number of iPhones activated in its latest quarter, as buyers waited for the new model.

    The country’s largest telecommunications company Thursday said it activated 2.7 million iPhones in the third quarter, the lowest number in a year and a half. A new iPhone was launched just after the end of the quarter.

    I will have to see the Verizon and Softbank #s, since the US & Japan were highlighted for the drop in sales.  If we remembered back to last year, ATT pulled forward all the contracts by allowing any existing iPhone contract which expired by CY 2010 to qualify for the full subsidized price.  Looks to me like the delay really tanked US sales.

         
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    Posted: 20 October 2011 09:53 AM #69

    I wonder departure of Ron Johnson has anything to do with the single digit YoY growth of the retail stores sale.  Cause or consequence or no correlation?

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    Posted: 20 October 2011 10:56 AM #70

    Mace - 20 October 2011 12:53 PM

    I wonder departure of Ron Johnson has anything to do with the single digit YoY growth of the retail stores sale.  Cause or consequence or no correlation?

    I would attribute a large portion of the decrease to a difficult compare with last years iPhone 4 launch quarter, but it will be If we use my ATT example above ATT activated 5.2M units vs 2.7M this year.  So 2.5M units and guess 75% sold by Apple stores and we lose 1.2B.  If we look at the Apple data summary

    Retail did 3.584B in 2011 vs 3.566B in 2010, add back in the 1.2B and we have 4.784B we would have a 34% YOY growth.  While the percentage of iPhone’s sold by Apple stores is a pure guess, I would say that the retail stores stalled growth can be related to the slowed growth of the iPhone this qtr.

         
  • Posted: 20 October 2011 11:36 AM #71

    pats - 20 October 2011 01:56 PM
    Mace - 20 October 2011 12:53 PM

    I wonder departure of Ron Johnson has anything to do with the single digit YoY growth of the retail stores sale.  Cause or consequence or no correlation?

    I would attribute a large portion of the decrease to a difficult compare with last years iPhone 4 launch quarter, but it will be If we use my ATT example above ATT activated 5.2M units vs 2.7M this year.  So 2.5M units and guess 75% sold by Apple stores and we lose 1.2B.  If we look at the Apple data summary

    Retail did 3.584B in 2011 vs 3.566B in 2010, add back in the 1.2B and we have 4.784B we would have a 34% YOY growth.  While the percentage of iPhone’s sold by Apple stores is a pure guess, I would say that the retail stores stalled growth can be related to the slowed growth of the iPhone this qtr.

    pats:

    AT did mention something I was also going to mention. I’ve been to a retail store three times in the past month for products the stores no longer carry. There are expanded device displays, but significantly less software and fewer peripherals. That may also have had an impact on the outcome.