Steve Jobs, Apple’s late co-founder, first announced that the company would open retail stores in May, 2001. At the time, Apple held less than five per cent of the personal computer market.
In the years since, Apple has not only improved its position in this market, but it’s carved out entirely new markets for its various digital media devices, including the iPod, iPhone, and iPad.
The Apple store can be credited for much of that growth. In 2001, Apple store revenue was approximately $19 million. Ten years later the stores took in $18 billion, meaning these retail outlets take in more revenue per square foot than any other retailer in the world.
The incredible popularity of the Apple store, which can now be found in 370 unique locations, has forced other industry heavyweights to think about expanding into the retail business. Already Microsoft has opened a number of stores across the U.S., while many insiders predict Google will soon follow suit.
But the retail game is fraught with danger. The company suffering most as a result of the rapid growth of Apple’s stores has been major electronics retailer Best Buy. The firm was recently forced to acknowledge that second quarter net income dipped an incredible 90 per cent.
Hardly helping the problem: a tumultuous management situation. The company may have hit a new low in April, when CEO Brian Dunn resigned after it was revealed he had engaged in a romantic tryst with a 29-year-old female employee.
Best Buy’s problem is that consumers are no longer grabbing up televisions, home audio, and car audio systems, products once synonymous with the chain.
Instead, tablets and smartphones are becoming more popular, with consumers heading to the Apple store, other retailers, or online to make their purchases.