News By/Courtesy: Daksh Dave | 27 Jun 2020 23:31pm IST

HIGHLIGHTS

  • Apple
  • Microsoft
  • Tech

Microsoft (MSFT) aims to close down its 83 physical retail stores in a way that highlights the beauty of what Apple ( AAPL) has achieved for its retail operations. After all, it's not as if Microsoft 's main hardware company is in dire straits right now. The Surface PC / Tablet series is now running at a rate of $5 billion, plus annual sales, and has recently been lifted from investments made to help both remote staff and students. And although Xbox's sales are down right now due to the close of the Xbox One cycle, the franchise remains on a solid footing and will see a major boost in sales later this year when the Xbox Series X rolls out. Nevertheless, Microsoft decided that it was not getting enough to make a return — whether in terms of retail revenue or growing interest in its hardware and that of OEM partners — to keep its physical retail stores going, rather than depending on its online stores and third-party retailers.

Apple, it's fair to say, has no plans to do something similar to its 500-plus Apple Stores — not even at a time when overall retail foot traffic is significantly down (and some Apple Stores are closed) in many large markets due to COVID-19. Apple, it's safe to assume, has no plans to do something similar to its 500-plus Apple Stores. In fiscal 2019 (ended in Sep. 2019), Apple generated around $81 billion in revenue (31% of the total revenue of $260.2 billion) from its physical and online stores. While Apple does not say how much of this revenue comes from physical stores as opposed to e-commerce, both channels are assumed to account for large portions of it, and several third-party surveys show that Apple is the world's largest physical retailer in terms of sales per square foot.

Furthermore, while this is impossible to measure, it seems that Apple Stores have done quite a lot over the years to persuade millions of customers to purchase a second, third, or fourth Apple product. Likewise, with the help of Apple 's investments in-store features such as its Genius Bars and Free Today in Apple's teaching programs, stores also seem to have done a lot to keep users of a particular Apple device loyal when it's time to upgrade.

There are a couple of things at stake here. First, Apple is by far the largest consumer electronics/tech hardware manufacturer in the world in terms of sales. Global demand, which collectively exists for its products, means that many of its retail stores (often located in major metro areas) would generate significant revenues even if so-called execution, in a way that smaller consumer electronics stores would not produce. Second, Apple has done a lot of positive things to make its stores friendly places to check out, learn about, buy, and get customer service for its products. And in the meantime, it has been able to bear the expense of doing it, such as hiring individual Apple Stores with staff and paying up for renting prime real estate. Second, as many readers are likely to claim, there is a degree of customer loyalty to Apple products and the Apple name that is unparalleled among major consumer/tech hardware vendors.

THIS ARTICLE DOES NOT INTEND TO HURT THE SENTIMENTS OF ANY INDIVIDUAL, COMMUNITY, SECT, OR RELIGION ETCETERA. THIS ARTICLE IS BASED PURELY ON THE AUTHOR'S PERSONAL VIEWS AND OPINIONS IN THE EXERCISE OF THE FUNDAMENTAL RIGHT GUARANTEED UNDER ARTICLE 19(1)(A) AND OTHER RELATED LAWS BEING FORCE IN INDIA, FOR THE TIME BEING.

Section Editor: Pushpit Singh | 28 Jun 2020 10:15am IST


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