“Apple Computer’s retail stores have been a boon to its overall business, but that may mean bust for some of its key partners. A growing portion of Apple’s sales have been coming through its expanding network of company-owned retail outlets. But some of the company’s resellers — independent retailers and businesses that sell Apple products — complain that a portion of those sales are being taken from their businesses,” Troy Wolverton reports for TheStreet.com.
“Apple now has about 120 stores, up from 86 at the end of September last year and just 65 in September 2003. The stores are mostly located in affluent, urban and suburban shopping areas in the U.S., although the company has recently opened a series of stores in Japan, Canada and the U.K.,” Wolverton reports.
“Apple doesn’t break out the retail value of its reseller sales or the wholesale value of its shipments to resellers. But in the first nine months of this year, just 17% of its overall sales came from its own retail stores, implying that a large portion of its business came from its reseller network,” Wolverton reports. “Retail stores’ share of Apple’s overall sales has been climbing rapidly, generating 14% of the company’s overall sales in its last fiscal year and just 10% in fiscal 2003. Some resellers charge that those gains are coming out of their cash registers.”
“Even if Apple’s stores hurt some of its resellers, some analysts think Apple will do what it can to nurture its overall reseller network,” Wolverton reports. “And some argue that instead of being hurt by the stores, some resellers are actually benefiting from them in that they help promote Apple’s products to customers who are considering the Mac platform and allow consumers to test them.”
Full article here.