Apple Inc. (NASDAQ:AAPL)’s same-store sales fell 3.3% in the third quarter, an improvement from the previous quarter’s 9.6% drop, but still a sign that Apple Stores can’t keep up with the rest of the company, reports Neil Hughes for Apple Insider.
Apple is dominating this new paradigm
Same-store sales of non-Mac products were actually up 9.7%, but those gains are overshadowed by the 15.1% drop in same-store Mac sales, so the drop can probably be attributed to two different trends. First, Macs have always had higher resale values than PCs, as many people who want to buy a Mac will get one secondhand. Second, the entire tech industry is transitioning from a sector dominated by desktops and laptops to one dominated by smartphones and tablets. So far, Apple Inc. (NASDAQ:AAPL) is dominating this new paradigm, but losing Mac sales still hurts.
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Burberry CEO Angela Ahrendts is taking over online and retail sales, which includes the Apple Store chain, and most analysts are very excited. Salesforce.com, inc. (NYSE:CRM)’s Marc Benioff called it “the most important hire Tim Cook has ever made,” and UBS analysts have said that “we can envision a day when Ahrendts is worth a multiple point on the stock.” It’s not just that Ahrendts was a successful manager at Burberry, she’s known to have both a strong sense of style and impressive digital acumen, a rare combination that fits Apple Inc. (NASDAQ:AAPL)’s corporate identity perfectly.
Half of sales at Apple Stores last quarter were to “switchers”
Even with falling same-store sales, which will probably continue into next year, Apple Stores are an important part of the Apple Inc. (NASDAQ:AAPL) brand and the after-sale services they provide help close the deal with Windows users who are nervous about switching to an operating system they are unfamiliar with. Half of the Macs sold at Apple Stores last quarter apparently went to “switchers” who were buying their first Apple computer, and bringing new people into Apple’s product ecosystem drives sales elsewhere.
A reputation for strong customer relations also strengthens brand loyalty and Apple Inc. (NASDAQ:AAPL) Stores in big cities like New York and San Francisco are natural focal points for product launches, with people waiting in line overnight and the obligatory media attention that comes along with it.