Yet another advantage is Apple’s wide net of its own global retail shops and online stores; for customers, this means they can avoid a markup from a third party like Best Buy.
This is only partially correct. Apple's retail stores are expensive to run, and that cost is Apple's.
You're right that there is a cost associated with having the stores but those are largely fixed costs and the amount of product Apple sells through the stores is so massive that the markup is pretty small compared to the markup associated with selling at Best Buy, et al.
Apple stores are among the most profitable retail venues in the world.
That fixed cost still has to be spread across all sales. Also, while the Apple stores are highly successful they are also a potential financial liability if things go sour since they only stock one productline.
The fact that they sell primarily Apple products is an advantage even if things went sour.
The Apple store gives Apple promotional and marketing support, it is a support venue. The customer walks in to an environment designed to promote Apple products not dishwashers, Xooms and Xbox 360s.
Things might go sour at some point, but Apple is sitting on $50 billion in cash and liquid assets, even if everything went south sales-wise, the advantages of exclusively promoting their products is probably worth it to them.
Their retail partners have been fair-weather friends and more likely to be a negative factor if things went sour than any fixed costs of running the stores.
The problem is that B&O doesn't sell anything that young people are interested in. So they don't have the same amount of traffic (of people buying stuff) in their stores.
They have 2 major product lines:
1) Why pay 3-5 times as much for a simply rebranded Sony tv? In old days B&O made their own electronics, but todays B&O tv is just a standard display wrapped in a B&O plastic frame and is no better than a standard Sony TV.
2) hifi sets (cd-players, tape recorders, vinyl players, etc) are obsolete because young people have all their music on their iPod/computer.
B&O is a company that sells quality horse wagons in a time when young people have switched to cars.
Comments
Yet another advantage is Apple’s wide net of its own global retail shops and online stores; for customers, this means they can avoid a markup from a third party like Best Buy.
This is only partially correct. Apple's retail stores are expensive to run, and that cost is Apple's.
You're right that there is a cost associated with having the stores but those are largely fixed costs and the amount of product Apple sells through the stores is so massive that the markup is pretty small compared to the markup associated with selling at Best Buy, et al.
Apple stores are among the most profitable retail venues in the world.
That fixed cost still has to be spread across all sales. Also, while the Apple stores are highly successful they are also a potential financial liability if things go sour since they only stock one productline.
The fact that they sell primarily Apple products is an advantage even if things went sour.
The Apple store gives Apple promotional and marketing support, it is a support venue. The customer walks in to an environment designed to promote Apple products not dishwashers, Xooms and Xbox 360s.
Things might go sour at some point, but Apple is sitting on $50 billion in cash and liquid assets, even if everything went south sales-wise, the advantages of exclusively promoting their products is probably worth it to them.
Their retail partners have been fair-weather friends and more likely to be a negative factor if things went sour than any fixed costs of running the stores.
This was exactly the reasoning of the high-end hi-fi retailer B&O - they opened flagship stores around the world, and it didn't turn out well.
The problem is that B&O doesn't sell anything that young people are interested in. So they don't have the same amount of traffic (of people buying stuff) in their stores.
They have 2 major product lines:
1) Why pay 3-5 times as much for a simply rebranded Sony tv? In old days B&O made their own electronics, but todays B&O tv is just a standard display wrapped in a B&O plastic frame and is no better than a standard Sony TV.
2) hifi sets (cd-players, tape recorders, vinyl players, etc) are obsolete because young people have all their music on their iPod/computer.
B&O is a company that sells quality horse wagons in a time when young people have switched to cars.