Report traces Apple Store ‘mistake’ all the way to Tim Cook; shift in emphasis from service to profits comes from Cook, say insiders

“After Apple public relations released a statement calling staffing cutbacks at its Apple Stores a ‘mistake’ that was being reversed, many thought that John Browett’s days at the company might be numbered,” Philip Elmer-DeWitt reports for Fortune.

“But Browett is still running the shops, and a new report suggests that he was just following orders — orders that came all the way from the top,” P.E.D. reports. “Once again, ifoAppleStore’s Allen has the scoop:”

[Former retail chief Ron] Johnson was champion of customer satisfaction, designing and staffing the stores to provide a superior experience for visitors and buyers alike. He was able to win over Steve Jobs with the concept that revenue and profit should be a secondary goal of Apple’s retail stores.

But in 2009, Jobs took six months of medical leave and put Tim Cook in charge of the company, including the retail stores. Cook is primarily an “operations guy,” sources explain, and his natural focus is revenues and profits, not customers. While Jobs was away, Cook and chief financial officer Peter Oppenheimer began to confront Johnson on his customer-centric retail philosophy—both felt the stores didn’t generate enough revenues to justify operating expenses.

Last year when Cook became the permanent CEO, he hired Browett from UK-based Dixons to head the retail chain. Cook was apparently attracted by Browett’s like-minded focus on the more traditional concepts of retailing—logic and process leading to revenues and profits. With his new position as CEO and staffed with a revenue-focused Sr. VP, Cook naturally moved the retail operation in different directions, the sources say, resulting in last month’s staffing changes.

Read more in the full article here.

MacDailyNews Take: This sort of thinking is a cancer that will eat away at Apple all the way to the core.

As we wrote on August 17, 2012:

This… type of “thinking” will kill Apple faster than 10 lines of beige Performas.

If Cook can’t see that clearly, he needs to go, too.

Concerned Apple shareholders might want to email CEO Tim Cook directly and ask him what exactly he’s doing… tcook@apple.com

Related articles:
Reports persist of Apple Retail Store budget cuts, emphasis on revenue over customer satisfaction – August 28, 2012
After being Browettized, Apple Retail touts numbers – August 20, 2012
Apple newbie John Browett brings Dixons to Apple Retail Stores – August 17, 2012
Dear Tim Cook: Apple’s retail focus should be on delighting customers, not generating cash – August 16, 2012
Apple Retail Store chief Browett: ‘We messed up’ with Dixons-eque staffing gamble; refutes layoffs – August 16, 2012
Apple retail chief Browett to get $56 million golden hello – May 27, 2012
Apple grants 100,000 shares to new retail head John Browett – April 25, 2012
Tim Cook emails UK customer: John Browett’s role isn’t to bring Dixons to Apple Retail – February 1, 2012
Eyebrows raised over Apple’s hiring of Dixons CEO to run Apple Retail Stores – January 31, 2012
Apple hires Dixons CEO John Browett as new retail chief – January 31, 2012

NPD: Nearly 60% of Apple product owners more likely to purchase another Apple device after positive Genius Bar experience – August 28, 2012
Apple Inc.: The most profitable retailer in America – August 15, 2012
Apple’s retail juggernaut is magical and revolutionary in its own right – May 25, 2011
Apple Retail Stores hit 10th anniversary (with video of Steve Jobs’ tour of 1st store) – May 18, 2011
Apple Store: ‘The best damn retail experience in America!’ – December 2, 2010
Apple’s retail stores generate huge sales – December 27, 2007
Piper Jaffray finds ‘gravitational pull’ at Apple Retail Stores – November 26, 2007
Apple thinks different with cash register-less retail stores that bring in billions – November 23, 2007
Apple makes retail seem ridiculously easy – May 29, 2007
How Apple’s Steve Jobs is revolutionizing Manhattan retail – May 08, 2007
Fortune: Apple Inc. is America’s best retailer – March 08, 2007
How Apple Retail Stores beat Best Buy, Neiman Marcus, and Tiffany – December 19, 2006

85 Comments

    1. Just wrote to Tim Cook at tcook@apple.com:

      To Mr. Tim Cook

      Dear Sir,

      I have been an Apple customer continuously since 1996, having used or still using every kind of Apple product: Mac, iPod, iPhone and iPad, as well as various peripherals and accessories.

      I am writing to express my concern over the recent news reports that the emphasis in the Apple Stores are changing, from one that focuses on providing the customer with a wonderful store experience, to one that focuses on profit.

      There is nothing wrong with a company’s focus on profitability. But the attraction of the Apple Stores has been its friendly atmosphere. To see them as profit centres would drive employees to take on a demeanour that will ultimately destroy what Apple Stores stands for today.

      The structuring of your new policy will shape how your staff behave in the Apple Store. One may argue that this depends on the kind of employee you deploy. But I think in final analysis it would not be any different.

      Please reconsider your policy, Sir. I hope the press reports are wrong.

      Thank you!

    2. I knew Tim Cook was the wrong man to lead Apple. Great at operations but zero Steve Jobs like intuition and knowing what the consumers want.

      Sure, everyone’s in business to make money, but Apple under Steve Jobs, also had class and character. Tim Cook seems to not have these characteristics.

      1. I am inclined to agree, Gregory.

        Note also that Steve Jobs took a $1 salary (and, yes, generous stock options). But his plight was tied to company success. That says a lot. Tim is taking so much compensation that he could not possibly spend it all in several lifetimes — all the while seeming to attempt to dumb-down everything Apple offers. Apple loses, Tim still wins. Retail screw-ups, Tim still wins. Chinese sweat shop allegations, even if only partially true: no problem, Tim still wins. Sad that success for bringing value to the table is not being rewarded at all levels of the company anymore. This is not the kind of company values that Apple used to have under Steve Jobs.

    3. My email to Tim:

      Tim,

      please don’t be the “sales bozo” that kills the golden goose.

      Apple Retail Stores are NOT retail stores. They’re Apple EXPERIENCE Stores.

      They are the number one contributing factor to Apple’s success. They are NOT direct profit channels, they indirectly drive revenue via other available channels by giving a prospective customer tangible insight into the Apple BRAND. And the brand is much much more than just the products being sold.

      The stores also build consumer loyalty and stickiness via excellent customer service and technical support.

      You need to consider the likely reason that Apple retail has been so enormously successful is because it has historically placed the highest value on these aforementioned things, which is precisely the opposite of standard retail operations worldwide.

      If you think that Apple can continue to be enormously successful by relegating the Experience to 2nd class status, while naively believing that you can coast on the relative merits of the products themselves, then you do not understand Apple, it’s culture, or it’s customers at all, and should resign your position as CEO immediately.

      No doubt when your predecessor reportedly advised you and your team to “not ask what he would do” in his absence, he never imagined that you would take it as license to UNDO what he had done.

      Sincerely,
      A 20 year Apple User & Shareholder

  1. All of this seems especially stupid when you consider that retail employees have been threatening to unionize. I will not be surprised at all if this is the catalyst.

    I generally hate unions, but I couldn’t blame the employees at all after this debacle.

    1. You think Cook has fucked up, just wait until you see what the Union Membership attitude will do to the workers.

      It won’t be a pretty sight. Think Dell Store without the crappy Wintel hardware.

          1. You’re also obviously a childish name-caller. Not surprising, considering you’re a right-winger who’s been suckered into voting against your own economic well-being, and bought into the whole “unions are evil” thing.

            Never mind the fact that if it weren’t for unions, we’d have no minimum wage, no days off, no child labor laws, no vacation, no sick time. Basically we’d be like we used to be and like many third world countries still are: a nation of sweatshops. How sad for you that you’ve been connived into truly believing that putting profit-focused business people in charge of our well being would lead to positive outcomes.

            Pathetic.

            1. Get off your self righteous high horse an stop chasing windmills. Unions used to have a purpose, which they succeeded in fulfilling. Now they have far too much control and act in the best interest of the union leaders first, then the members, at the expense of anyone else that gets in their way, including the companies the employees work for and the general taxpayer. That’s why twimoon is upset. If anyone is pathetic, it’s the people who cling to this ideology of victimization at the expense of rational thought.

            2. I tend to agree.
              Unions were necessary IN THEIR TIME. They were needed, and did what had to be done with horrid dangerous working conditions.
              Right now Unions often do more damage to workers than they help. The rest of us are having to take a pay cut or can’t even get a job, but Union workers are too good for that, so they strike until the whole company goes down. That’s what happened in our city. We had about 5 factories in this small town. The one that went on strike was ALREADY making top wages far more than any of the others. The company told them take a cut or they’d have to close the factory and merge it with the one out of state. Union didn’t budge and these high paid line workers, (and everyone else) were suddenly jobless—taking a even BIGGER pay cut when (and IF) they got jobs at the remaining factories. Just stupid. People had to uproot their families, or stay here and suffer with their Union’s decision.
              The people working in the other factories in town thought they were nuts to strike, the pay was so high where these people were. Taking the cut they’d STILL have had the highest paid jobs. Unions can be useful in some cases, but in too many instances they kill everything being stubborn.
              Another good example is the sports players unions that demand more money for people already overpaid by millions of dollars.

            3. Agree 100%. Well said sir.
              What I don’t get about the USA, as viewed from comfortably far away: you can triumphantly put Curiousity on Mars but at the same time have reactionary dicks like this in (judging from my long experience of MDN) exceedingly large numbers.

      1. I’d contend there are NO “Bad ones”, only bad people who game a system to their advantage. Much like: Bankers, Lawyers, Politicians, Corporate Middle Managers, etc.

        Any logic and fact based critical analysis will reveal that unions are a good thing and are responsible for many of the “benefits” enjoyed by working people today.

        You sir have bought into a political talking point, not grounded in reality, positioned to elicit an emotional response. You have been suckered.

        1. There certainly are “bad ones.” That’s the problem, they’re structured to put inordinate power in the hands of petty people, they are inherently flawed. A large part of the problem are people who reflexively and simplistically defend them because they fit into their dichotomous world view of the people in charge (‘the man’) invariably exploiting the (‘victim’) workers. At this point in our society, unions clearly do more harm than good; government regulations now fill the role that was once needed.

          1. Power to the people! The problem with unions is that they really don’t have much power in this day an age. If they heavily protest, the corporation simply closes shop and reopens elsewhere.

            In that respect, Unions fail…

            Corporate has been given a LOT of power without major unions in the last 20 years. Have they, in general, spread out the company’s wealthy… or concentrated it? Think about it. Do executives really deserve 90% of the pie? They’re simply another cog in the machine.

            They should be seen that way. In some rare cases, like Steve Jobs, they were more like hubs, but in most cases… executives do not warrant their exorbitant remuneration.

    2. I obviously know I’m waisting my time with you sociopathic neocons but here goes anyway. Don’t you have a white power rally in Nuremberg I mean Louisiana or Florida or something? Where your sea of fat ignorant racist whites will try to get your next brown baby killer in office? You and people like you are the reasons the rest of the world no longer can stand fascist despot USA. Please hurry up and implode so you can finally disappear in the septic tank of history. Herr Romney, Herr Ryan and the Obersturmführers in your bunkers ZEIG HEIL!!! as I vomit. Repugnicans

    1. Wouldn’t register yet. It would take awhile for bad decisions to percolate through the system and to eventually negatively affect customer satisfaction surveys. If Cook and the rest keep this up, you definitely will see a reduction in customer satisfaction.

      1. This won’t just effect customer satisfaction at the stores, it will harm the entire Apple global brand, and perhaps in a very deep and semi permanent way.

        It is nearly impossible to undo the effects of bad customer experiences.

        1. Ditto for the store in Amsterdam. I was in the store for no more than 30 seconds before one of the friendly staff members came up to ask me if I needed any help. I graciously said “no” and they pretty much left me alone to roam the store, but I did notice that everyone else on the staff were busy helping other people.

    1. Seriously? This isn’t anything new.

      If you really feel that way, you may want to step away from any news articles from now on.

      Journalists’ sources are protected.

      If you should have learned anything from the Engadget debacle a couple years ago, that was it!

      That, and don’t knowingly buy stolen property unless you want to get into big trouble!

        1. We already know that there’s some truth behind this. Apple has already admitted to making a mistake on staffing. I’m not saying every report is 100% factual, but it’s got at least some facts behind it.

    2. Without anonymous sources their would be no investigative journalism and these important stories would remain hidden. Just look at what happens to the whistle blowers who do go public – it almost always destroys their life. Anonymity is a small price to pay for learning the truth.

  2. Moves like this are sucking the magic out of Apple.

    Without magic, Apple will be just like all the others.

    Hey bozos–if it’s not broken, don’t try to fix it!!!!

  3. I am starting to be very scared of Tim Cook.
    He doesn’t get it .. What makes Apple special.
    If all he cares about is profits and profits and profits then surely Apple is dead.

    And to all that say the corporation need to make money then , that is NOT Apple !

    Screw Tim Cook ! Your workers are your best asset.

    1. we should wait and see. don’t worry. apple will be rotten very quickly. plus, lawsuit gets apple aggravated. I am sure about this. apple, smile now, cry later. company, which sues others rather than cooperates, should be died. nowadays, Apple try to monopolize IT industry. it’s absolutely illegal. they will be punished.

    1. My friend quit working as a genius at an Apple Store because he had’n’t gotten a raise in six years. They replaced him with six new hires, each at double his salary. Apple store managers are power hungry idiots!

  4. The truly gifted business people know that you don’t make money by trying to make money. Instead you make money by solving a tough problem, delivering a great service, or creating wonderful products. When you do these things customers will throw their money at you. Steve Jobs understood this. I fear Cook does not.

  5. If Mr. Cook wants to dilute the customer experience at the Apple Stores by getting rid of workers, he better damn well make absolutely bullet-proof, never fail computers and IOS devices. And we all know that ain’t gonna happen!

    God forbid, but he is starting to take on the Ballmer philosophy and we know how well that is working out for MicroShaft.

    Take care of your customers and your people, the rest of it will fall into place.

    1. Damns straight on the first sentiment. I was disturbed by the number of people packed at the Genius Bar last Sunday. Several MBs and MBPs were taken into the back with repair orders, including my own 2012 13″ MBP which is getting a new logic board to (hopefully) fix constant system freezing related to the graphics chip.

      The service from staff was good, though they could’ve used one or two more Genius Bar techs to handle the backlog of customers needing service. The number of floor sales staff numbers seemed about right for the number of customers.

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