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July 10th, 2000

[4:00 PM] Wall Street Journal Singles Out Apple's Growing Retail Sales
by Wes George

The Wall Street Journal ran a story titled, "Apple courts snubbed retailers with new attitude, new policies" on Friday. The exclusive report by Pui-Wing Tam paints a new picture of Apple's relationship with retailers:

"AND THIS TIME, the design-savvy Cupertino, Calif., company is armed with a bag of new retail tricks, including an expanded hit list of shopping outlets, a cadre of design experts who tailor store spaces to highlight the “Apple experience,” and regular visits by Apple employees who demonstrate new products to consumers and train sales representatives in new Apple software. This store invasion signals a marked turnaround in Apple's sometimes rocky relationships with retailers."

While Mr. Tam acknowledges that Apple refused to discuss its retail strategy he does amass some rather convincing evidence from interviews with Apple's retailers and analysts who follow Apple's business closely.

As Larry Mondry, chief operating officer of Dallas-based CompUSA Inc told the Wall Street Journal, "Apple used to be among the worst companies to deal with for a long time. Apple is a different company today."

But the change runs deeper than just treating the retailers right. Not surprisingly, the hand of Steve Jobs is evident:

"Behind this latest charge is a renewed focus on giving customers a particular experience when they shop for Apple computers, an issue brought to the forefront by Steve Jobs, the company's chief executive. By improving the shopping environment for Apple buyers, marketing experts say, the company hopes to attract more of the first-time computer buyers who currently account for nearly 30% of iMac sales. And in a market inundated with lower-cost machines, analysts say Apple needs to capitalize on its successful iMac line, which is easy to use and has set milestones in computer design with candy-colored hardware that makes for attractive store display."

Perhaps of most interest to AAPL shareholders are the strong numbers that Apple is generating from the refurbished "store with in a store" initiative. According to the article, "Sales volume of Apple products at the store (downtown San Francisco CompUSA) has jumped five times since the refurbishment, according to Morgan Stanley Dean Witter."

Read the in-depth Wall Street Journal article for more information.

The Mac Observer Spin: Good news on the retail front is excellent news for Apple's bottom line, which according to the WSJ article is growing: "Ultimately all this translates to a 27% year-over-year sales jump for the fiscal quarter ended April 1. Although this was less than the 37% increase for the same quarter the year before, Apple is still growing faster than the overall computer industry's 15% per quarter rate, according to Dataquest Inc."


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