Reports Persist of Apple Store Budget Cuts, Emphasis on Revenue

Reports Persist of Apple Store Budget Cuts, Emphasis on Revenue(ifoapplestore.com)

21 points by blario 13 years ago | 16 comments

siglesias 13 years ago |

This second-guessing of the post-Jobs executive team has gotten really out of hand, though this was to be expected to some degree I suppose.

My personal experience with Apple Retail has still been nothing short of stellar, recently with two almost-no-questions-asked full replacements of a faulty iPad and Retina MBP. Sometimes strolling through Apple stores I have wondered if they were overstaffed, based on the simple fact that lots of people know how to use the popular devices and probably don't have as many questions as they did back when the store was mainly about selling Macs and digital cameras.

As for cost cutting, Apple has been doing it for years. Witness, for example, the radical reduction in pack-in goodies over the course of the development of the iPod. The second generation iPods came with a carrying case, remote, and charging brick [1]. The third left out the remote and carrying case [2]. The fourth left out the dock [3]. The fifth left out the brick [4].

Guaranteed if Cook had been in charge these would have been decried as evidence of Apple becoming a stingy, bean counting big corporation that lost its soul to save some money on pack-ins. In reality they were cutting fat and passed the savings on to us.

1) http://ilounge.com/assets/images/reviews_apple/ipod20gb/imag... 2) http://www.ilounge.com/assets/images/reviews_apple/ipod15gb/... 3) http://www.ilounge.com/assets/images/reviews_apple/4gpower/p... 4) http://www.ilounge.com/assets/images/reviews_apple/ipod5/5bo...

blario 13 years ago | |

This is different because of what is being cut. I can't remember having used one of those "goodies". They end up like the "toys" that come in cereal boxes: junk you throw out every Spring. And something as personal as a case is something stylish people would rather pick out themselves.

Firstly, we're basically talking about the mission statement of the retail stores. It was originally to provide a great experience. Now it is maximize profit. This is definitely a big deal. No longer giving away junk was not a change of Apple's mission statement.

What does that mission statement mean to the customer? Well... I would lean towards believing many customers are loyal to Apple due to quality. It is logical to think Apple believe[s,d] in quality because it lends to customer satisfaction, which lends to brand loyalty. If customer satisfaction is no longer their driving motivation... does that mean Apple has killed the very reason their customers are loyal to them? Those "goodies" probably were never considered the very reason Apple has brand loyalty. If it was, Apple was able to change that reason to a new reason (quality).

Secondly, how much a customer can trust the word of a salesman is often determined by whether the salesman is commission or not... there's a reason people pay attention to it. This is far larger than no longer giving away items which were never used & thrown away. Although the employee don't seem to be paid via commission now, they basically still are (points tallied on how many high profit items are sold).

yuhong 13 years ago | |

Retail cost-cutting and pack-in goodies are different.

siglesias 13 years ago | | |

Isn't the experience diminished in both cases?

sneak 13 years ago |

I think it's a fallacy to believe that suddenly Apple became stupid just because there's no more Steve.

I bet there's a lot more to this story than we can see at the moment.

hpvic03 13 years ago | |

Is it? Apple under Jobs was defined by complete perfectionism, which enabled it to create great products.

Steve had great taste - he was as much Chief Designer as he was CEO. Focus comes from the top, and the focus on design has been Apple's secret sauce. Cook is not a designer. His focus is going to be on operations, and Apple's design will suffer for it.

I'm pretty sure those recent Apple Genius ads would have Steve rolling in his grave. I predict that those are just the beginning.

cageface 13 years ago |

Last year when Cook became the permanent CEO, he hired Browett from UK-based Dixons to head the retail chain. Cook was apparently attracted by Browett’s like-minded focus on the more traditional concepts of retailing—logic and process leading to revenues and profits.

This is exactly why I'm short on Apple now. You'd be hard pressed to find somebody better than Cook to squeeze every last ounce of waste out of your supply chain but I see zero evidence of Jobs' uncanny product vision so far.

taligent 13 years ago | |

Which is hilarious because all of Apple's current products (and those for the next few years) were created whilst Steve Jobs was still alive.

As was revealed in his biography.

tomflack 13 years ago | | |

To make the parent comment more relevant, I've taken "product vision" to include the quality of the retail store experience.

josephlord 13 years ago |

Well that is exactly what you would fear if you hire someone from Dixons to run the stores.

In the UK they have a reputation for uninformed staff and the physical stores aren't bad but they definitely aren't Apple Store quality either.

r00fus 13 years ago |

I seriously have no idea how John Browett got this position. His resume makes him sound like a complete ill-fit for this position

yuhong 13 years ago | |

Read the entire article.

jaytaylor 13 years ago |

Tim Cook continues to chip away at the Apple empire.

R.I.P. Steve Jobs.

polarix 13 years ago | |

The late Jobs years really were quite something!

nirvana 13 years ago |

There are two things coming that will cause Apple to be making changes now: First is the economy is cooling off globally. The second is that Apple has major new product opportunities and it makes changes well in advance so that these new product launches go well.

On the economy:

The economy is really slowing down globally right now. This is much like the summer of 2007... the hints are there but it took a year before all hell broke loose (saw it in the dotcom bust as well. Same hints.) No way to know how bad it will be or if it will be anything very startling, or just a couple years of lower growth.

But when this happens companies feel it early, and the good ones react, and this happens months if not a year before things start to show up in the popular press like they did in 2008.

On future products: One thing intrinsic to apple's DNA is evolution. This is a company that is not complacent.

It is also a company that doesn't broadcast its intentions or its moves or its plans.

This means that when it sees opportunity, it starts to make changes well in advance of when it will be able to capitalize on that opportunity.

The Apple Store itself is a good example of this: One of the reasons the retail operation was created was to be able to eventually sell the iPhone and iPad directly to the public in a way that couldn't happen before. Macs can be sold online, but the iPad and iPhone need to be seen to be understood.

Apple stores have always done very well on the metrics apple cares about, one of which is profit. I don't see any reason to believe they are going to sacrifice those metrics to try and boost profit.