Apple: Winning Converts Worldwide, One Store at a Time

On Thursday, Apple opened its largest U.S. store, a building in Boston with a glass and steel facade that a senior company executive said reflected Apple's plan to expand its retail ventures at home and abroad.

Sandwiched between aging brick buildings on Boylston Street, the store features a ground floor with more than 100 Mac computers, a second level for iPod music players and iPhones and a third entirely for service. The store is Apple's second-largest, after the one on Regent Street in London.

Single Brand Focus

Ron Johnson, an Apple vice president and head of retailing, said the service center was designed to handle 1,000 customer inquiries a day. The Boston store also features a glass spiral staircase from the ground floor to the third.

Most other retailers would go broke offering this level of service, said J.P. Gownder, senior analyst at Forrester Research in Cambridge, because they normally sell many different brands.

"They're selling so many disparate brands," Gownder said of other electronics retailers. "They can't really push any brand over any other brand."

The Boston store also offers a glimpse into the latest retail thinking at the company, which is based in Cupertino, Calif., as it prepares to continue its international expansion with a new store in Beijing this summer.

The effort comes amid increased competition for Apple. Research In Motion (Nasdaq: RIMM) said Monday that it was introducing a new high-end version of the BlackBerry, the Bold, or 9000. The company said it intended it for its core base of business users but also hoped that it would catch on in the broader retail market. The new model has twice the screen resolution of the current Curve BlackBerry model. It matches the resolution of the iPhone, whose screen is larger.

Color-Coded Help

At the Apple store in Boston, "concierges" stand at attention in orange shirts bearing the slogan "I know people," part of changes made recently to more thoroughly identify Apple employees' roles by the color of their shirts.

A sales force of "specialists" wears aqua, while technicians, known as "geniuses," wear dark blue; all project a trademark retail image that has helped drive sales growth.

"These stores have served them very, very well and really raised the bar in terms of technology customer service," said Michael Gartenberg of JupiterResearch, a technology consultancy.

In its financial quarter to March 29, Apple's store sales jumped 74 percent, to nearly US$1.5 billion.

Average revenue per store in the quarter reached $7.1 million, up 48 percent from a year earlier. Meanwhile, quarterly operating profit at the stores more than doubled, to $334 million.

Spreading Influence

Johnson, the head of retailing, said Wednesday that an international retail presence would be an important driver of future sales.

"Today, Apple is about 50 percent international revenue and about 50 percent in the U.S.," he said. "We increasingly want to get our retail presence out in the other countries."

Apple's latest filings with the U.S. Securities and Exchange Commission show that the company operated 208 stores at the end of the quarter, compared with 177 a year earlier. Of those stores, nine were considered "high profile," operations located in high-traffic neighborhoods with extensive amenities and products.