Apple Caught in a Blizzard of Bucks
'Tis the season for consumption, and it seems Apple fans are going out of their way to shower the company with money. The Apple Mac App store has climbed to 100 million downloads less than a year after it initially launched, and meanwhile Apple's cash cow retail stores raking in revenue, according to figures that show the company's retail employees are some of the most productive in the industry.
Apple announced Monday that the Mac App Store hit 100 million downloads since its January launch. The store, which is the online retail source for product upgrades and apps for Mac computers, doesn't quite get the traffic that Apple's iOS App Store achieves, and it has quite a ways to go before hitting the 10 billion downloads that the Android Market has hit. However, it's still an indication of the direction e-commerce seems to be headed.
"This is indeed a change in the way that people purchase software, moving more towards the way mobile apps are being consumed and farther from the traditional brick and mortar stores or even typical online distribution," Aaron Watkins, cofounder of Appency and analyst at GigaOM Pro, told MacNewsWorld.
"Because Apple controls the hardware, they can pre-install the Mac App Store on all of their devices, making it simple for consumers to go there for their software purchases. Consumers don't want to have to go looking for something that will work on their computers, especially Mac users that tend to have less available options and have to sift through PC software to find something that is compatible. Steve Jobs' legacy can be summed up in KISS: Keep It Simple, Stupid. The shorter the distance from point A to point S, S being Sale, the better," said Watkins.
Raking It In
It's a concept that's been working online for the company, but it's also one Apple's put to use in its more traditional brick and mortar stores. Those stores generate about US$100,000 per employee per quarter, according to numbers from Asymco.
By comparison, a retailer such as JC Penney typically makes about $124,000 per employee per year.
"Apple does throw a lot of people in sales and supporting customer experience in the store; however, because of their overwhelming and resounding success in selling lots of devices, they've been able to sustain that. It's almost a self-fulfilling business improvement strategy. Most other retailers have worked for years to reduce and squeeze out more from each employee, but as retail moves more in the direction of customer experience and being customer-focused, they're starting to reconsider how to serve the customer better," Leslie Hand, research director at IDC Retail Insights, told MacNewsWorld.
That's not necessarily done by throwing more employees into the mix, said Hand, but by making sure the ones that are there are better equipped and more productive. Unlike many retailers that hand prospects a questionnaire during a hiring process, Apple has workers sit in a room and interact with each other, making sure they're personable and excited to promote the company's products.
"It doesn't apply in every segment, but I think you need to think of it as a model for any retailer who thinks that improving customer service is important. People are coming around to that school of thought, of customer engagement being a key driver to success, and arming employees that way. And Apple employees all have mobile devices they can ring people through with -- though not every retailer will follow that model, it's made people think about how mobility can help them," said Hand.
In order to keep that trend alive, however, Apple will need to ensure the products in those stores -- online or brick and mortar -- are up to par. Apple is reportedly right now in talks with Anobit, an Israeli company that makes memory signal processing (MSP) technology that improves the endurance and speed of flash systems, according to a report in Israel's The Calcalist.
Apple is said to be looking to buy the company for as much as $500 million. It would be one of the tech giant's largest buys, and its first in Israel.
Anobit technology already runs in the iPhone, iPad and MacBook Air, and Apple could be looking for a stake, or complete control, in a system it hopes to continue using in the future.
A blog on ComputerWorld pointed out, though, that Anobit attended the Barclay's Capital Global Technology Conference in San Francisco last week, apparently hoping to court investors rather than a buyer for the company. It's possible Apple is looking to invest heavily in product development there, much like Intel did with a $32 million investment in Anobit just over a year ago, rather than make the company part of its Cupertino operations.
Neither company has confirmed the speculation.
What's In a Name?
The new year brings with it buzz on the next-generation iPad. True to form, Apple has made no comment about when or if an iPad 3 will arrive, though DigiTimes reported that supply chain chatter puts the next version of Apple's tablet launching in three to four months. The timing would make sense, as it would follow the spring releases of the first two iPads.
Plenty of Apple rumors get their start when the company releases a beta upgrade to an operating system that includes coded references to upcoming products. When Apple recently released its latest iOS 5.1 sampling, the codes included a list of fake references to new hardware models, such as "iPhone11.3" and "AppleTV9.2." Only a handful of people likely know for sure what either of those codes really mean, but the speculation game plays on.