Among the staggering numbers reported by Apple in its Q1 earnings results Tuesday, was the $3.85 billion it took in during the quarter from its retail stores alone. That total was nearly double the
$1.97 billion a year ago, and gives the retail business an annual run rate of $16 billion.
That's bigger than the GDP of many developing countries. With its expansive product line, from
Macs to iPhones to accessories, it only makes sense for Apple to operate its own stores. But given Apple's enormous success selling its own stuff, why don't any of its smartphone rivals follow suit by
opening up their own dedicated outlets?
It's probably the easiest business and marketing strategy Apple's competitors could replicate without running into intellectual property issues.
BlackBerry-maker Research in Motion is one that comes immediately to mind to open its own stores in key markets like New York, San Francisco and other cities internationally.
No, RIM
doesn't sell a huge variety of gadgets like Apple -- but it also wouldn't need stores with as big a footprint as Apple. It already has a strong brand in the mobile space and millions of customers to
start with, so generating initial interest for its own retail stores shouldn't be difficult. Then it's just a matter of providing a clean, well-lighted space to showcase its phones and coming line of
tablets, along with cases, headphones and any other related gear.
Even more important would be following Apple's example of staffing stores with a small army of knowledgeable, friendly
salespeople to offer better service than customers will get at any other retail outlet. Before buying a smartphone or other device, shoppers typically have a lot of questions and need a fair amount of
hand-holding. Who better to provide help than the manufacturers' own experts in their own stores? Oh, and the ability to check out anywhere in the store via sales associates is another good feature to
borrow from Apple stores.
Of course, this approach might not sit well with manufacturers' carrier partners, who typically sell and market BlackBerry and other handsets through their own
retail outlets. And in recent years, the major carriers have upgraded the quality of their stores and staff in connection with the growing appetite for smartphones.
But AT&T has obviously
benefited hugely from the iPhone even though Apple sells them directly in its own stores as well as through AT&T outlets, Best Buy and other retail channels. Wireless service from a given carrier
could be activated within a BlackBerry store, like the iPhone at Apple stores. Ultimately, the more phone or tablets sold, the better for carriers as well as manufacturers.
Google last year
flopped when opening an online store for the Nexus One. Maybe it should try the retail business again, but with a small number of physical stores aggregating Android-powered phones and other gadgets
from various manufacturers, staffed with Android experts. Ditto for Microsoft in rolling out its new line of Windows Phone 7 devices.
Apple has shown there's value in operating specialized,
brick-and-mortar stores where consumers can easily browse and demo high-tech gear and get helpful in-store service. Its distinctive glass-encased stores have only added to the cult of Apple. But its
retail model is one other companies with growing lines of high-end gadgets can follow.