Apple's New Marching Orders For Its Stores

While Apple (NASDAQ:AAPL) doesn't have an executive directly overseeing its stores, CEO Tim Cook has stepped in and is telling Apple Retail store leaders that strategies must be tweaked. One alarming statistic he shared, according to, is that some 80 percent of all iPhones today are not purchased at an Apple store.

"The iPhone is Apple's central 'gateway product' to other devices like iPads and Macs, so it is critical that the Apple smartphone is sold via an Apple Store so new customers are immediately exposed to iPads, Macs and other devices on the showroom floor," the story pointed out. "Even though 80 percent of iPhones are not sold at Apple Stores, 50 percent of all serviced iPhones are troubleshooted, repaired, or replaced at Apple Store Genius Bars. Cook reportedly hinted that he would like those numbers to be more in line."

These are interesting stats, and they seem to be quite favorable to Apple. If we assume that most of that 80 percent is coming from other retailers such as Walmart, RadioShack and Amazon and not from (where exposure to other Apple products is already happening), those stats are simply the result of an effective expanded sales channel. You can't try to get other retailers to sell your stuff and then complain that your percentages of direct-sales are dropping.

The good news, though, is those repair figures. First off—and this is more good news for Apple—the reference here is that 50 percent of all serviced iPhones come back to the in-store mothership. But Apple Genius visits pull in a lot more than that as Apple shoppers don't use it solely for troubleshooting, repairs and replacements, as happens at, for example, Best Buy's Geek Squad. Those three areas are generally indicative of problems. No, many of those visits are tech support, where they need help doing something—or integrating something—with the phone. It's not a problem as much as simply needing help to maximize the iPhone experience.

That kind of tech support means that there is a high level of trust, which is an Apple point of pride. That Apple Genius bar, though, is more importantly also a point of upsell. By giving shoppers a reason to take the iPhones purchased anywhere back into an Apple sales floor, this gives Apple the gateway upgrade path that Cook craves.

The story also points out that "Cook expressed satisfaction with the way Macs and iPads have been selling via Apple Stores, so he placed those two products on a figurative 'back-burner' during his talk." The reason behind this is not necessarily good. It's more of a percentage perception game. Macs and iPads are not faring nearly as well with consumers in general—as opposed to the ultra-loyal Apple fan base—as is the iPhone. That means that external sales are weaker—Android tablets make a stronger case against the iPad than do Android smartphones against the iPhone.

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