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Best Buy deal may feature Apple boutiques

updated 10:35 am EDT, Thu April 5, 2007

Best Buy Apple boutiques

Apple's new, expanded distribution deal with Best Buy may increase the effective number of distribution points for Macs by 10 percent and bring new boutique layouts to showcase Apple products. Analyst Gene Munster of Piper Jaffray said that while the growing presence of Macs and other Apple products at Best Buy will not affect the firm's outlook for Mac sales in the June or September quarters, the strengthening relationship will bring higher visibility, including boutique-like Apple stores in some locations. Best Buy, which sold Apple TV one week ahead of other retailers, announced it would increase the number of retail locations stocking Macs from 57 today to about 200 by this fall.

"We believe Apple's store within a store at Best Buy will be much different compared to the current pilot store rollout, which was a table with Apple products on it," Munster told clients in his research report.

"The difference is we expect some (smaller number) of these 200 stores will have walled-off Apple stores, while others will have improved layouts. What is clear, you won't wander around Best Buy to shop for Apple. A good way to think about Apple & Best Buy is the Coach or Chanel store within a store concept at Nordstrom," the analyst continued.

According to Munster, the expanded retail presence at Best Buy accounts for only a 2 percent increase Mac distribution; however, the firm estimates that volume of visitors through Best Buy equates to about a 10 percent increase in Mac distribution points. As of December of 2006, there were a total of 7,500 worldwide Mac distribution points.

The analyst noted that the new agreement with Best Buy will offset the impact of the recent announcement of CompUSA store closings, but overall will result in an increase of less than one percent in Mac distribution points. Earlier this year, the struggling retailer announced the closing of 50 percent of its retail stores, or about 126 locations.

"Due to CompUSA's closings, the addition of 200 Best Buy stores to the Mac channel means that Mac distribution points continue to increase," Munster wrote. "But this news indicates that the pilot is succeeding, and further expansion should have a material impact."

The relationship is headed in the right direction and could result in a full expansion to Best Buy's 822 retail stores, the analyst concluded.




by MacNN Staff

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Comments

  1. Chris Paveglio

    Joined: Dec 1969

    0

    walls suck

    walled off corners of the store suck. Apple needs to be front and center, right inside the front door, so as soon as buyers see it they can buy it. the failure of the last 'store within a store' apple did was because it was so far away and looked like a secret cove. Plus the horrible salespeople knowledge.

  1. msuper69

    Joined: Dec 1969

    0

    Salespeople

    That is the weak link in the whole deal, whether it's Best Buy or any other outlet (excluding Apple of course). The computer salespeople don't even know much about PeeCees, much less Macs.

  1. Jittery Jimmy

    Joined: Dec 1969

    0

    Good idea

    Although this sounds stupid on the surface, it actually is a good idea for a couple reasons:

    First of all, many consumers think that they can get a Mac at any store. Of course, most PC vendors don't sell Macs. Now, some consumers walk in for a Mac and walk out with a PC. That issue will be reduced.

    Secondly, a boutique implies both special status and special sales people. I don't know if you've been to a retail electronics store recently, but the folks there are not specialists of any kind. Clearly, Apple's retail stores are in contrast to this. If BestBuy goes the same route, not only will customers have a better retail experience, but BestBuy itself will be following Apple in becoming a top-notch tech retailer. Without this, BestBuy has nothing to differentiate itself from the other multitude of retailers.

  1. webraider

    Joined: Dec 1969

    0

    Been there.. done that

    This has been done before. I believe it was either Circuit City of Sears but this idea is not a new one. I wonder what makes Apple think this time around will be "different". Don't get me wrong... Best Buy selling Apple is a good idea... and on paper a Store in a store has always been a good idea... I hope this works this time around...but I'm just curious why Apple is thinking this time it will work.

  1. SubPop

    Joined: Dec 1969

    0

    ...different?

    but I'm just curious why Apple is thinking this time it will work.

    I think the first time around, Apple was the retarded little brother that was hidden in the back of the computer store. The iMac had just come out and, other than that, there was nothing really cool about going into that little cove in the back of the store. Now with the iPod, iPhone, and other i"things", it will be the "cool" part of the store, not the "cage where we keep 'those' computers".

  1. manleycreative

    Joined: Dec 1969

    0

    meh…

    Apple is going to look like a second banana to the "mainstream" again and will also tarnish the first rate, swank appeal of their products in the Apple Store.

    Apple does it's own thing and needs to show that through their stores.

    Apple and Apple users have to be snobs because Joe Shmoe comp user DOES NOT CARE!

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