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субота, 24 грудня 2011 р.

Apple at the retail crossroads

I’m often asked at what point should someone short high-flying Apple AAPL -0.07% shares? My response is simple: When the company starts closing stores and pulling back from retail, then the tide has turned.
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2011's biggest tech products

Walt Mossberg wraps up the technologies that made a splash in his year-end review.

While we all know that Steve Jobs was the motivating force behind Apple, we should also note that the company has gotten too big to be totally dominated by his personality, as was the case in the early years.

Although Jobs nixed a lot of dubious ideas, it’s now clear that he was overridden in many cases. The sheer number of moxie consultants involved in various initiatives such as Apple’s retail effort is staggering.

The proof will be in the pudding with the opening of the next-generation store in Palo Alto, Calif.

The first Apple store opened in 2001, and 10 years later it has 368, with more to come. They have proven to be a bonanza. This is despite the conventional wisdom that online sales are to be preferred over brick and mortar.

There are two critical ingredients to a retail outlet promoting a single brand such as Apple’s. This was learned by the car-dealership business.

First of all, customers can kick the tires and play with the equipment. Secondly, you control the sales pitch.

I’ve never been a fan of selling though once-popular outlets such as CompUSA, where various brands compete for shelf space and mind share. On top of that, sales staffers in generalized stores basically are influenced by bribes called spiffs.

In other words, you make extra commission by pitching product A rather than B because product A’s company gives you a bonus for the sale. This kind of corruption cannot take place at brand-specific operations.

So how much more can Apple grow the retail business?

In terms of saturation, we can look at some other numbers. For example, Macy’s Inc. M -0.65% , the big retailer, has more than 800 stores. McDonald’s Corp. MCD -0.16% , while not really comparable, has more than 31,000 restaurants worldwide.

I see no reason why Apple cannot have 1,000 stores that would all be successful. Staples Inc. SPLS +0.18% , the office-supply chain, has 2,000-plus stores.

Apple seems so adept at retail that there is no reason to doubt that it could go out and buy a company like Staples to expand in the sector. Why not?

Apple does have more than $75 billion in the bank, and Staples is worth about $10 billion. Do the math on any retail chain. Opportunity lurks.

So right now, the sky is the limit. I wouldn’t be betting against Apple anytime soon
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