Tim Cook must have more margin.
Apple (NASDAQ:AAPL) will use the iPhone 5S / 6 release to step up its retail strategy. It seems that the pomaceous company wants more direct business, with fewer phones sold via carriers and other retail outlets. Not only that, but Apple will offer discounts and other deals, we're told, in an attempt to get customers through its stores' doors.
In IT Blogwatch, bloggers wonder if Tim's cooked his golden-egg-laying goose. [You're fired -Ed.]
Your humble blogwatcher curated these bloggy bits for your entertainment.
A breathless Mark Gurman proffers this exclusive report from a secret Apple retail meeting, based on the whispers of "multiple people familiar with the internal event":
Apple CEO Tim Cook and his leadership team are moving to implement sweeping changes. ... [Cook] noted his dissatisfaction that approximately 80% of all iPhones are not purchased from an Apple Store [yet] 50% of all serviced iPhones are troubleshooted, repaired, or replaced at Apple Store Genius Bars.
...Cook said Apple is developing new incentives for...customers buying iPhones [at] Apple Stores [including a] trade-in-program [and] improvements to price-matching policies.
...Expect “an army of new products this fall,” one person said. ... Apple’s Retail Division will be critical messengers of Apple’s new products to new customers. MORE
Erica Ogg has more:
The meeting was held in San Francisco and ran for three hours. ... Apple uses its stores [as] an opportunity to also sell [iPhone] customers on an iPad or a Mac.
...The part of the plan with most real-world impact to the average user is likely to be a trade-in program [which] would mean Apple would accept older devices as part of payment toward a newer device. [And] collecting older iPhones allows Apple to re-sell them...in emerging markets where Cook is determined to grow. MORE
But your humble blogwatcher is aghast:
Seriously? Cook can't understand that Americans would prefer to buy phones from their carrier? Especially now that AT&T's monopoly is over, that sounds like a no-win game, for so many reasons.
Carriers are one of the best practitioners of loyalty marketing, in the sense that they know full well that it costs far more to acquire a new customer than it does to retain one. Since the advent of number portability, American carriers have been falling over themselves to retain customers—learning fast from European carriers, who are always ready to cut deals with a customer near the end of a contract.
And look at this: It sounds like we're seeing the continued crumbling of Apple's "no discounts" edifice. It all adds up to a nasty case of channel conflict. MORE
Meanwhile, ontrack doesn't get it:
who would buy an iphone 5 at this time from an apple store when walmart is selling them for $129 + contract Target selling $99 with contract or renewal?
WHAT'S APPLE SELLING THEM FOR? MORE
And Rich Batten sees a more fundamental problem with the strategy:
I am not gonna make a 4 hour drive just to pick up a phone...from the nearest Apple Store. MORE
So what of this "army of new products"? Jonny Evans connects the dots:
[Apple's] hire of Yves St Laurent CEO, Paul Deneve...is interesting; particularly in light of Apple's continued attempts to perfect a device we call "iWatch".
...Look, no one in the real world wants to walk around their yard wearing some over-obvious technology gadget. ... Google Glass might be a technologist's wet dream, but is far too indiscreet for the mass market. ... Where Google Glass is a statement, iWatch will be an understatement...ubiquitous, but discreet.
...Apple's move to hire fashion house talent suggests a wider plan. ... Fashion statements are only effective if they are fashionable. ... Anything else is made of fail. MORE
But Kirk Ngo interprets different:
Tim's cook definition of an army of new devices is the number 3. They are lying so much. ... It would be wise to take this with a grain of salt. MORE
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