Eideard

NEWS: ANALYSIS & COMMENTARY
By Cliff Edwards

For years, Apple Computer CEO Steven P. Jobs has tried working with retailers to make shopping for Apple’s stylish products as appealing as using them–everything from setting up kiosks to special sections adorned with Apple’s Think Different posters. Still, the computer maker’s share has fallen, and Jobs figures he knows why. “Buying a car is no longer the worst purchasing experience. Buying a computer is now No. 1,” he griped at the MacWorld trade show in January.

Now, he’s taking matters into his own hands. On May 19, Apple will open a swanky new retail store–the first of as many 110 nationwide–at Tyson’s Corner Galleria mall outside Washington. While Apple execs won’t comment on their plans, the idea seems clear: Well-trained Apple salespeople in posh Apple stores can convince would-be buyers of the Mac’s unique advantages, including its well-regarded iMovie software for making home videos and its iTunes program for burning custom CDs…

The way Jobs sees it, the stores look to be a sure thing. But even if they attain a measure of success, few outsiders think new stores, no matter how well-conceived, will get Apple back on the hot-growth path. Jobs’s focus on selling just a few consumer Macs has helped boost profits, but it is keeping Apple from exploring potential new markets. And his perfectionist attention to aesthetics has resulted in beautiful but pricey products with limited appeal outside the faithful: Apple’s market share is a measly 2.8%. “Apple’s problem is it still believes the way to grow is serving caviar in a world that seems pretty content with cheese and crackers,” gripes former Chief Financial Officer Joseph Graziano.

Rather than unveil a Velveeta Mac, Jobs thinks he can do a better job than experienced retailers at moving the beluga. Problem is, the numbers don’t add up…Apple would have to sell $12 million a year per store to pay for the space. Gateway does about $8 million annually at each of its Country Stores. Then there’s the cost of construction, hiring experienced staff. “I give them two years before they’re turning out the lights on a very painful and expensive mistake,” says Goldstein…

Maybe it’s time Steve Jobs stopped thinking quite so differently.

An example why – before making a business decision, equity purchase, or maybe just buying a new TV set – you should consider the opinions of several analysts. Not just one.

Thanks, Charles Jade