Apple's Unique Advantage: Ritholtz Chart
Click on the map to see an animation of Apple Inc. store openings and product releases over the last 13 years. We'll wait for you.
OK, that was pretty cool, right?
Apple's retail stores have been uniquely successful. The concept has been tried before by consumer technology companies, without much success. In 1996, Gateway Inc. opened its Country Stores, selling computers in charming Holstein-cow-print boxes. The following year, the company rejected a takeover offer from Compaq Computer Corp. Gateway stores began to close less than five years later and by 2004, they were toast. Acer Inc. picked up the company for $710 million dollars in 2007.
Apple opened its first two stores on May 19, 2001 -- at Tysons Corner Center in McLean, Virginia, and Glendale Galleria in Glendale, California. Today, there are 424 Apple stores in 16 countries.
Apple's stores have been wildly successful. The New York Times has called them "a retail phenomenon renowned for impeccable design, deft service and spectacular revenues." The stores take in "more money per square foot than any other United States retailer -- wireless or otherwise -- and almost double that of Tiffany." In 2009, the Apple store on Regent Street was the most profitable shop for its size in all of London, according to MacDailyNews. At the time, it was reported that the store's earnings "have soared to £60 million a year, or £2,000 per square foot -- more than double the estimated sum made by Harrods."
How much is Apple's advantage over its competitors worth? That is hard to say. But the ability to control the presentation of the company's products and its interaction with customers is significant. Apple even generates customer loyalty through the Genius Bar, its version of technical support.
I have no idea what the stock will do in the future or what's in store for the technology giant -- especially without Steve Jobs around. We can say, however, that in consumer technology, Apple's retail stores are a unique asset.
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Barry L Ritholtz at email@example.com