Apple's Plan For Economic Bumps

If you don't already know by how, Apple stock got hammered with a 17% drop with a couple of downgrades.  It has since received 3% but the market has not closed yet as of this writing.

But with banks failing, housing bubble bust, huge slowdown in consumer spending, companies should be reining in costs, circle the wagon, and, in some cases, cut their workforce.  But not Apple.

As of August this year, there are about 240 stores with about 70 more future stores to be opened.  It like I hear a new store open every week.

In the past, Apple had stated they were going to innovate their way through of economic troubles.  I guess they failed to mention the expansion part too.  At the time, it sounded like just talk.

Thinking back now and with questions about Apple's $20 billion in the bank (good banks I hope), they stand to do a lot of things some of their competitors, even big ones with smaller amount of cash on hand, cannot do.  last week, HP and Dell both announced intentions to cut notebook R&D for the coming fiscal year.  That's the typical response I would expect from corporate entities that are trying to get past economic turbulence and hope for brighter days.

Now both HP and Dell will weather any problem in the near term because they both have a lot of cash and lines of credit but they also have a lot of moving parts, a lot more than Apple.  There, Apple can poise to position itself to expand even during dark financial days for the rest of its competitors.

  • Has the cool factor - still make gears and mobile devices like the iPod and iPhones that everyone wants.
  • With cash and more every quarter, Apple can afford to expand and plan for long-term growth, if it may mean at the expensive of short-term margins.
  • A good analogy is that Apple Stores are like embassies and Geniuses are good-well ambassadors who help you with Macbook or iPhone questions.
  • Increased visibility.  With 2,000 ATT store locations, 240 Apple stores, and about 600 Best Buy locations, the iPhone can be in places where it naturally isn't like Verizon or Sprint retail locations.  The increase footprint gives Apple added exposure.
  • Added retail locations offer Apple a better fighting chance against Samsung, Nokia, and Blackberries that are just about everywhere you go.
  • If you want something done, do it yourself.  Apple presence in the past was stunted by sales people untrained in Apple-ware and have zero or little knowledge about its software and hardware.  By training its own people at Apple stores and Best Buy locations, it stands a better chance of provider potential customers the right information (propaganda?).
  • Apple's pull.  Having an Apple store is a good thing.  It draws retail traffic.
  • Location, location, location.  In southern California, you've got stores - South Coast, Pasadena, Manhattan Beach, Century City, Beverly Center, The Grove, and Newport just to name a few.  You can't get more retail shelter from economic woes on Main Street than these "bling bling" locations.  I'm sure it's like that everywhere else.  

I wonder if Apple knows something we don't about consumer spending and their growth prospects. While I don't claim to know anything about their plans, take a look at where they've got the stores and you'll find economic bullet-proof.  It stands to gain a lot when the economy turns around.

Still, I really am looking forward to these innovative new products Mac blogs keep advertising about.

Source:  Wiki Apple Store (there's like a wiki entry for everything) and info Apple Store

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