Print 37 comment(s) - last by TakinYourPoint.. on Aug 29 at 3:17 PM

Apple's new retail chief looks to trim the fat

Odd things have been happening at Apple retail stores over the last few weeks. Earlier this month, reports started surfacing that a number of retail workers at Apple store locations had been laid off. Apple responded to those reports by saying that it had "messed up" in its retail hiring formula but hadn't laid anyone off. 
"Making these changes was a mistake and the changes are being reversed," said Kristin Huguet, Apple spokeswoman, at the time. "Our employees are our most important asset and the ones who provide the world-class service our customers deserve."
However, reports are coming in that Apple stores are seeing their budgets cut, and a bigger emphasis is being placed on revenue. With a market cap of well over $600B and record profits quarter after quarter, it seems a bit odd to be placing such a heavy focus on revenue and cutting the budget of its retail outlets which have historically been very customer friendly. reports that employees still haven't received an official explanation of changes made in staffing levels, and that signs continue that Apple is focusing on revenues and profit instead of customer satisfaction.
According to sources cited by, employee performance standards have been modified to place an emphasis on sales functions. Reports also indicate that more small products will be stocked at Apple retail stores and several budget categories for the retail outlets have been cut, including the budget for store maintenance.
Sources say that workers are allegedly being evaluated based on the number of contracts sales for iPhones they're able to generate and a number of "essentials per hero product" sold with each product such as cases, and accessories. The sources also indicate that the number of training areas in stores is being reduced to accommodate the extra small products and accessories.

Sources: IFO Apple Store, Apple Insider

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I'm sorry
By FITCamaro on 8/28/2012 10:13:47 AM , Rating: 4
Apple ever cared about anything else? As well as any other company? That's their job. Provide products/services their customers want at a price they'll pay and customer support they'll tolerate.

Apple customers just are far more gullible than others and will pay a premium for shinier things than others have.

RE: I'm sorry
By retrospooty on 8/28/2012 10:48:07 AM , Rating: 1
Wait. They are shiny? Now I want one. ;)

RE: I'm sorry
By mydogfarted on 8/28/2012 10:53:49 AM , Rating: 5
Welcome to post-Steve Jobs Apple. Love him or hate him, Steve made the company an innovation and profit monster. Current management has no idea what to do going forward, so they fall back to traditional corporate thinking - coast on their following, cut corners where they can, and make as much money as they can before the bottom drops out. Sure, Apple products are over-priced and locked into their proprietary systems, but Jobs knew how to make people want them.

RE: I'm sorry
By paydirt on 8/28/2012 11:26:59 AM , Rating: 2
Apple does need to keep an eye on their costs and shouldn't wait for a recession to cut costs.

Apple store employees should be BOTH helpful and a good salesperson. They have to walk a fine line though.

RE: I'm sorry
By bobcpg on 8/28/2012 1:31:51 PM , Rating: 1
Welcome to post-Steve Jobs Apple. Love him or hate him, Steve made the company an innovation and profit monster. Current management has no idea what to do going forward, so they fall back to traditional corporate thinking - coast on their following, cut corners where they can, and make as much money as they can before the bottom drops out. Sure, Apple products are over-priced and locked into their proprietary systems, but Jobs knew how to make people want them.

+6 +7 +8...

This is so true. You couldn't have said it better! I actually have nothing else to add because your post was perfect.

RE: I'm sorry
By Ammohunt on 8/28/2012 2:03:39 PM , Rating: 2
So we are back the years of the beige macs....oh lord!

RE: I'm sorry
By BSMonitor on 8/28/12, Rating: 0
RE: I'm sorry
By hiscross on 8/28/12, Rating: 0
RE: I'm sorry
By 91TTZ on 8/28/2012 12:16:11 PM , Rating: 4
I think there is a lot of confusion about PCs and mobile devices.

The PC isn't going anywhere. It's just that the whole mobile scene is relatively new so all the hype is surrounding that market. Of course new markets grow faster than established markets. That doesn't mean that the established markets are going away, it just means that the new ones will grow faster until they reach a point of equilibrium.

I remember just a few years ago all the hype was surrounding netbooks and nettops. People hyped up the Atom CPU, saying how netbooks were going to take over laptops. A few years later and we see a totally different picture. Netbooks ran their course, became mature, and gathered the market share that they were going to take. Both netbooks and laptops are still around, and their respective market shares indicate customer demand for them.

The entire tablet craze will eventually come to an end and the hype will go away. Once the hype clears you're left with a mature product that's going to do what it's going to do. The tablet won't go away, it's here to stay. It'll have a place in your home just like your PC and smartphone.

RE: I'm sorry
By Apone on 8/28/2012 12:08:06 PM , Rating: 2
@ BSMonitor

Or if the Mac's performance since bringing Intel onboard was somehow lacking

The Mac's performance was lacking; This is why Apple switched to Intel know, the same CPU's used in Windows PC's...

To criticize people for buying sleek, stylish products over mass quantity, cheaply made as possible revenue churners is pretty lame.

So you're telling me that Mac owners did their due diligence before shelling out double/triple the cash for a Mac? And didn't just jump on board the Apple bandwagon because their friends are doing it and to be socially accepted?

You can dislike Apple for its policies and practices, but don't blame the customers who enjoy simple, straightforward computing experiences... In a shiny box, as you say.

Explain to me exactly what is so mind-numbingly difficult about Windows 7.

@ hiscross

The post-pc whiners are having a hard time getting over the fact that their dull PC is fading into the sunset.

Thank you for clarifying; I had no idea the reasoning behind buying a Mac computer was because it came down to being a beauty contest and not important factors like upgradeability, cost, flexible hardware configuration, etc.

RE: I'm sorry
By FITCamaro on 8/28/2012 12:52:10 PM , Rating: 2
This post does the rest of my explaining.

And there is no real difference in build quality between Apple's phones and tablets and any of the other top tier manufacturer's really.

As far as their laptops, yes the build quality is high. Other's can build the same thing, just most Window's users aren't willing to shell out the premium for an all aluminum case just so it looks pretty. And while Apple might make it look good, it certainly leaves something to be desired when it comes to actually cooling their laptops. Using the user as a heatsink is hardly good design

RE: I'm sorry
By FITCamaro on 8/28/2012 12:46:17 PM , Rating: 2
I've had this screen name longer than you've been on here. And no longer even own a Camaro. But can't change it and wouldn't if I could. Then all my "fans" wouldn't know who I am.

RE: I'm sorry
By Argon18 on 8/28/2012 11:53:27 AM , Rating: 3
That's just not true. I suspect you've never been into an Apple store. Baseless slandering if all you're doing, and its shameful and dishonest.

I've dropped out of the Apple ecosystem, I no longer use any of their products. But when I did, the in-store experience was generally phenomenal. The workers really bend over backwards to help you, which is a very rare quality indeed, especially these days.

I bought a Macbook Pro used, off of craigslist, and the power cord was fraying on the end of it. I brought it in to the store, and they replaced it for me, for FREE. It's a $90 power supply they gave me for free. They didn't owe me anything, I bought it used from craigslist.

I bought my mother an iPad for Christmas a few years ago. A few months AFTER the warranty expired, it started acting flaky. She brought it into the store and they gave her a BRAND NEW iPad2, right there on the spot. Free replacement, free upgrade, and all after the warranty had already expired.

I'm a Linux guy now, no more Apple for me, but the in-store experiences I've had there were refreshing, certainly better than any other electronics retailer in the US.

RE: I'm sorry
By FITCamaro on 8/28/2012 12:53:22 PM , Rating: 1
Where did I say their in-store experience was poor?

I was commenting on the fact that the article says they're cutting back staff that undoubtedly will affect their customer service.

RE: I'm sorry
By ritualm on 8/28/2012 3:35:42 PM , Rating: 2
Any chances Apple Retail Stores will head down the same well-trodden path as Best Buy?

Ya know, the company that finally owned up to the fact that pushing revenue over customer service simply does not work in the retail game.

RE: I'm sorry
By FITCamaro on 8/28/2012 3:56:09 PM , Rating: 1
Pretty much all retail stores have terrible customer service now driven by our high minimum wage and the state of the economy.

RE: I'm sorry
By jeff834 on 8/29/2012 7:15:36 AM , Rating: 2
You must have been living in a cave before 2008. If the poor customer service in retail stores is driven by the high minimum wage and the state of the economy, how do you explain the poor customer service that existed when the minimum wage was lower and retail sales were at record highs?

The reason you have poor customer service in retail is not because businesses are paying their employees too much, it's because they aren't paying them enough. Salespeople used to work on commission years ago. Sure you had to be a little more wary of BS artists, but they actually gave a crap whether or not you bought something and they wanted you to be happy so you would come back to them or recommend them to friends.

Best Buy was a big part of changing that model, because they realized they could hire barely literate teenagers at nearly minimum wage and ride them about numbers and make a bigger profit. Back in the day, when stores with commissioned salespeople still existed, you would have no trouble getting help with something. Go into a Best Buy and try to get help, you practically have to set up a bear trap and hope you catch an unsuspecting employee.

I'm not a fan of Apple really, but I guarantee the people working in their stores are knowledgeable about the products and make more than minimum wage. Although I would guess it's probably still not a livable wage, let alone one you could plan retirement on.

RE: I'm sorry
By semiconshawn on 8/28/2012 5:02:02 PM , Rating: 2
Apple customers just are far more gullible than others and will pay a premium for shinier things than others have.

Exactly. I mean seriously a Samsung S3 is what like $199-$299 on contract and an iPhone is like $199-$299 on contract.

RE: I'm sorry
By TakinYourPoints on 8/28/2012 5:26:00 PM , Rating: 1
Facts have no place in a circlejerk

The goal of a business is to make money
By tayb on 8/28/2012 3:06:51 PM , Rating: 2
The goal of a business is to make money. Apple wants to make more money.

RE: The goal of a business is to make money
By TakinYourPoints on 8/28/2012 3:58:01 PM , Rating: 2
Except that putting customer service at a higher priority than making money is what made Apple so much money in the first place. Put making money at a higher priority and strangely enough, you make less money in the long run.

Remember the Dell of the mid/late-90s? Amazing customer service. Then the race to the bottom in PC prices began and customer service was thrown in a ditch, now Dell's name in the consumer space is trash.

Quote from an article that is pretty damning.

At the most basic level, Jobs served as the champion for former retail chief Ron Johnson's vision of Apple stores focused on consumer satisfaction, and without Jobs to protect that vision Apple has slipped into a numbers-focused perspective for its retail operations.

"Johnson was champion of customer satisfaction, designing and staffing the stores to provide a superior experience for visitors and buyers alike. He was able to win over Steve Jobs with the concept that revenue and profit should be a secondary goal of Apple’s retail stores.

But in 2009, Jobs took six months of medical leave and put Tim Cook in charge of the company, including the retail stores. Cook is primarily an “operations guy,” sources explain, and his natural focus is revenues and profits, not customers. While Jobs was away, Cook and chief financial officer Peter Oppenheimer began to confront Johnson on his customer-centric retail philosophy—both felt the stores didn’t generate enough revenues to justify operating expenses."

Given that customer experience is Apple's business (even their products are a direct extension of that), they are screwing the pooch by messing with a retail formula that has worked so well for so long. It is the most successful retail chain in history, what more do they want?

RE: The goal of a business is to make money
By ritualm on 8/28/2012 5:54:01 PM , Rating: 2
Make more money so Apple can afford to increase Tim Cook's pay raises. And several other top-level execs.

If it's the beginning of the end for Apple, then this "focus shift" is a step in the right direction. Time for some popcorn.

By TakinYourPoints on 8/28/2012 7:25:27 PM , Rating: 2
It is mind-boggling that they're messing with a method that has been so overwhelmingly successful: Put user-experience before profit and profits will follow.

If this also trickles down to compromising their user-focused product and technology design, then they really will be done for.

By tayb on 8/29/2012 10:07:24 AM , Rating: 2
I've read reports of rampant waste, theft, forgery, and bribery at Apple stores. Hundreds of thousands of dollars of equipment given away to friends of employees, as perks to nearby businesses for free drinks, as payment to businesses for services rendered (personal or otherwise), as devices to shatter for fun at "Apple Parties", etc. Quote from a Gizmodo article.

But the Genius crew wasn't just yanking all these phones so they could make calls with both ears. They took them just so they could break them. Ronald used this inventory loophole—which he and Jake both say is harder to exploit these days—to go through countless iPhones for the sheer absurdity of it. At parties with other Apple employees, they'd all get tanked, pull out their phones, and spike them to the ground, laughing as the Gorilla Glass and circuits sprayed. Sounds more entertaining than flip cup, at least—and to Jake and the rest, it was a sort of game. How many phones could they squeeze out of oblivious, infinitely-stocked Apple? In the early days of the phone, the only limit seemed to be the audacity of the Geniuses. They even traded gear for free drinks.

It sounds to me that Jobs had a very laissez faire attitude about the Apple stores which led to an "anything goes" mentality among the employees with stores wasting/squandering/stealing hundreds of thousands of dollars worth of equipment. Tim Cook seems to be trying to cut down on that sort of thing and make the stores more profitable. That doesn't mean he is going to make the stores less consumer friendly.

Stalling the economy
By dgingerich on 8/28/2012 12:05:26 PM , Rating: 2
Talk about stalling the economy. Apple has huge amounts of cash on hand, and isn't spending any of it or sending it out as dividends. That sucks out the lifeblood of the economy, stalling everything. Last I heard, they have $60 billion sitting around doing nothing, much of it overseas.

At least Google is spending theirs on tons of projects. The project may not go anywhere, but they're spending the money.

Think of the economy like a circulatory system. If someone lays around and their blood pools in low spots, that blood isn't able to be used to deliver O2 and nutrients to the body, making the person more lethargic, increasing the problem. On top of that, the pooled blood dies slowly, causing it to be even less effective, and possibly toxic, when it finally does begin circulating again.

Companies sitting on unspent money, like Apple is doing right now, makes the economy even more lethargic, stalling recovery. Government policies, like increasing corporate taxes and making employee benefits cost more, cause companies to let money sit, compounding the problem. They aren't hiring. They aren't doing projects. They aren't reinvesting. The money sits around, doing nothing, and stalls the economy.

With the amount sitting at Apple, around $60 billion, and the amount that money would be changing hands in a year, about 8 to 10 times in a slow year, we're talking about costing the US GDP about $480 to $600 billion, and that's just from Apple. Apple alone, just hiring unnecessary retail employees and paying them a total of $10 billion, could cause a huge upsurge in the US economy and help a lot of people recover their lives. Instead, they let it sit. It's probably costing them more than it would in taxes to actually spend it.

RE: Stalling the economy
By dgingerich on 8/28/2012 1:38:03 PM , Rating: 2
Wow, I just got an update on Apple's cash situation. They have over $400 billion in the bank. In other words, they are single-handedly stalling the US economy.

RE: Stalling the economy
By B~ on 8/28/2012 2:13:02 PM , Rating: 2
Apple alone, just hiring unnecessary retail employees and paying them a total of $10 billion, could cause a huge upsurge in the US economy and help a lot of people recover their lives.

Value needs to be a primary consideration, as creating a job for the job’s sake only robs the payer.

When economist Milton Friedman observed mine workers in China digging a canal using shovels, he asked why they were not using modern machinery. He was told that this was a “jobs program” and that using shovels employed more workers. Friedman then quipped that they should give the workers spoons, not shovels. China had lost sight of the fact that the purpose of the work was to build a canal to increase commerce and enhance the lives of the citizens.

Better answer would be to hire the labor for something gainful to the economy, society, and the company, rather than to squander 10 billion to pay people to twiddle their thumbs.

RE: Stalling the economy
By dgingerich on 8/28/2012 4:54:32 PM , Rating: 2
At the rate they're affecting the US economy, they'd be better off spending for the sake of spending. To have this much money sitting around doing nothing is causing so much slowdown that people aren't buying their goods. If they spend on more projects, employ more people in general, as Google is doing, they'd get that money back out there to be reused. That money would make the rounds in the system, increase the economy in general, and everyone would make more money in the process. This would in turn allow more people to buy their goods, and most likely make them more profit than what they'd spent.

Granted, Google is spending on worthwhile projects, exploring different prospects and markets. They're even spending massive amounts of money on creating their own broadband ISP. (I hope they come here, being stuck with Comcast really sucks.) Google would easily have as much money as Apple if they had saved it up, yet Google is probably the only reason we're still under 10% unemployment.

Gotta fund the lawsuits
By Rukkian on 8/28/2012 10:11:46 AM , Rating: 2
They have to find somewhere to cut due to the amount of money they are paying lawyers all over the world. While the 1B they got awarded will go a long ways, they also know that competition will be stifled, so they can drop their service.

RE: Gotta fund the lawsuits
By 91TTZ on 8/28/2012 12:18:42 PM , Rating: 2
They weren't awarded any money yet. The jury made the recommendation and the judge has to review it before it's awarded. Once that happens the award waits until the appeals are exhausted.

RE: Gotta fund the lawsuits
By freedom4556 on 8/28/2012 6:31:16 PM , Rating: 2
Can't wait until the laywers figure out that it is possible for them to sue themselves out of a job. Not much use for lawyers in a monopoly.

Huge mistake
By TakinYourPoints on 8/28/2012 3:00:53 PM , Rating: 1
Cutting back on retail is about the worst mistake Apple can make.

Customer experience and satisfaction IS Apple's business, everything they do is the product of that.

Apple stores are probably the most successful retail business in history. Pinching a few pennies to compromise this, thus making for a worse customer experience, is horribly shortsighted. Their retail is insanely successful, customers love it, and you're already making money hand over fist, so why mess with a winning formula?

Cook and Co sounds like they're backpedaling but I'm certain that they'll try to compromise on retail again. Its the first time I've made this complaint, but this would never have happened under Steve Jobs.

RE: Huge mistake
By darkhawk1980 on 8/29/2012 7:37:22 AM , Rating: 2
I'm not surprised this is happening. Consider how their rivals are now catching up (or beating them) in market share now. The only way to make those profits increase is to cut the retail stores back.

Good for them, this is the beginning of the downfall for them. Once customers start getting pissed off that they aren't getting good service on their 'high quality, over priced' goods, they'll realize paying half the price for the same thing is actually a good idea, even if it has Android on it.

RE: Huge mistake
By TakinYourPoints on 8/29/2012 3:17:46 PM , Rating: 2
Your argument is based on the idea that Apple's profits are declining. Their profits and sales figures are rising faster than anywhere else in the industry. The iPhone by itself makes more money than Microsoft Office and Windows combined. The growth of Android phones hasn't been at the expense of the iPhone, both are selling more units as the market continues to expand.

RIM and Windows Phone have been the main casualties so far, and even among Android handsets you're seeing a dominant player emerge, Samsung, while HTC and Motorola see stagnating or declining sales.

"Half the price for the same thing" is also false, given that something like a Galaxy S3 costs the same as something like an iPhone 4S (and soon iPhone 5) with or without a contract.

Lawyers are Expensive O.o
By spamreader1 on 8/28/2012 11:16:33 AM , Rating: 2
That is all.

PC World says "Hi"
By Lonyo on 8/28/2012 2:15:33 PM , Rating: 2
PC World says "Hi".

Just thinking...
By ven1ger on 8/28/2012 7:22:55 PM , Rating: 2
The way I see it, the reason for these cutting back on their budgets is that Apple is forecasting that their products are not going to be selling as well in the future.

First, the lawsuits are draining money, not really sure any of these have actually panned out financially for Apple as yet, and possibly it could hurt them seriously if their products get banned in other countries.

Secondly, a company that is supposed to be cool may be hurting their own image with all these lawsuits/bans/etc. Just doesn't live up to the cool image anymore, may be a major turnoff with not just tech junkies, but image conscious people who want cool gadgets and not lawsuit happy companies.

Third, Apple is falling behind developing their products beyond the first few iterations. As others have commented, the SGIII has or may have already surpassed the Iphone, Android looks more polished than IOS, etc. The other tech companies have been steadily progressing or advancing almost on a steady progress while Apple seems to be taking longer and longer with coming out with advances in their technology. Even Apple admitted that technology wise they couldn't compete with Samsung as they just keep coming out with newer and better devices.

Things are looking like back in the old days of Apple, they flourished for a while with the Apple and the original Macs, but eventually they couldn't keep up with Microsoft and all those PC computer manufacturers that were making faster and cheaper computers. A single company trying to keep the operating systems and developing of the equipment all to oneself, becomes a lot more difficult to keep innovating against other companies that only have to worry about either the operating system (Google, Microsoft) or developing hardware (Samsung, HTC, ASUS, etc...). Resources get diminished being spread too thin.

I think that Apple is looking at their marketshare in virtually every market getting smaller and smaller. While Apple may have cash on hand as $400 billion, that doesn't last long if your expenditures exceed your revenue, which I think may be what Apple is looking at in the near future.

"A lot of people pay zero for the cellphone ... That's what it's worth." -- Apple Chief Operating Officer Timothy Cook

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