What Does Apple have In Store for You?

by Jennifer Gerlach
Channels Industry Analyst

Apple opened its first retail location in May 2001. This was a very bold move for the company considering that Apple products are niche products built on a proprietary MAC OS system. However, in October 2003, Apple can say it was a great success. In fact, this move has been such a success, that on November 30th, the company will be expanding into the international market with a store in Tokyo at the Ginza Shopping Center.

On October 24, 2003; I had the opportunity to attend the opening of Apple's 67th United States retail "Brick and Mortar" location at University Town Center ( UTC) in San Diego, California. This retail store is located in the mall, adjacent to the food court. I arrived at UTC just after 6:00 PM PST on opening night and already there were over 100 people waiting for the 8:00 grand opening of the store-- and the launch of the new Panther OS software.

The Panther OS brings 150 new features including a Server Admin tool making it easy for administrators to set up and manage the open source software built into Mac OS X; Open Directory 2 for hosting scalable LDAP directory and Kerberos authentication services; Samba 3 for providing login and home directory support for Windows clients; and the Jboss application server for running J2EE applications. The new operating system retails at Apple Computer Stores, Apple resellers and Apple.com for both single users ($129) and family packs (five or more users for $199).

At each store opening Apple runs a sweepstakes offering. At the opening I attended, staff handed out sweepstakes forms 15 minutes prior to the opening of the store. The winner of the grand opening sweepstake receives a "Digital Lifestyle Collection" bundle, valued at nearly $2,300. The bundle includes a 15-inch flat-panel iMac with combo drive (DVD-ROM/CD-RW), a Canon PowerShot SD100 digital camera, a Canon ZR60 digital camcorder and an Epson Stylus Photo 820 printer.

By the time the staff members opened the doors at 8:00, there was a line of 300 people wrapped around the food court. Upon entry, each visitor received a set of Apple "dog tags" and a grand opening T-shirt.

The newest Apple stores, complete with an innovative architectural design, offers features such as an Internet cage with iChat AV software and iSight digital video cameras for video conferencing, a "Genius Bar" offering customers the opportunity to connect to the Mac community, Solution Centers for music, photography and movie demonstrations, and even a children's play section. Each store includes light wood fixtures and glass partitions, causing the store to feel vibrant and inviting. The sales staff was extremely helpful and courteous and very knowledgeable of both software and hardware products. This is not the end of Apple's expansion. In fact, this week Apple opened two new retail locations; one at Corte Madera, California and the other at Marlton (Short Hills), New Jersey. This will mark the 16th Apple retail location in California and the fourth location in New Jersey.

With Apple's recent retail store success and new product category introductions (Panther OS, iPods, iTunes, etc.), Apple will continue to expand in the retail market. The introduction of Windows-compatible products is creating a new phenomenon from Apple's traditional niche target market to a mass market. This will further drive the Apple retail store expansion.

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