Apple’s Retail Strategy Is Still Paying Off in a Big Way
NEW YORK (TheStreet ) — Apple (AAPL ) no longer breaks out the sales of its retail store business as part of its quarterly results, but industry analysts who follow the consumer-electronics leader say the rest of Apple’s report suggests its retail operations remain strong at a time when the company is launching its most anticipated product in years.
Apple’s retail stores received attention recently for having only display models of the Apple Watch and only allowing customers to place orders for the device. The practice was promoted in an email and video by Angela Ahrendts, Apple’s senior vice president of retail. She encouraged retail employees to push consumers to purchase an Apple Watch through Apple’s online store.
Ahrendts’ method of promoting the Apple Watch was seen by some as a change in Apple’s retail strategy. Historically, the company has hyped up the first-day sales of new products, leading to long lines outside Apple’s stores.
But analyst Tim Bajarin of Creative Strategies said the absence of the Apple Watch in the Apple stores was more of a “one-off” event than a change in the company’s retail direction.
“You can’t glean any retail information from the Apple Watch,” Bajarin said. “That had to do with their supply chain. But you can get a pretty strong understanding that since their [overall] numbers did well, you have to believe that retail is stronger than ever.”
For the fiscal second quarter. Apple said it earned $13.6 billion, or $2.33 a share, on revenue of $58 billion. In the same quarter a year earlier, Apple reported a profit of $10.2 billion, or $1.66 a share, on $45.6 billion in revenue. Sales of the iPhone and Mac were among the quarter’s highlights, with iPhone revenue rising 55% from a year ago to $40.3 billion on the sale of 61.2 million units. Mac revenue rose 2% to $5.62 billion on 4.6 million units.