Report: Apple Retail Stores Now Focused on Revenue, Receive Budget Cuts
August 28, 2012 8:57 AM
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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
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.
IFO Apple Store
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8/28/2012 7:22:55 PM
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.
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