6 ms·

I think one point people are missing: Apple stores, even if they exist mainly to promote the brand, are MASSIVELY profitable. In fact, they are one of the most

I think one point people are missing: Apple stores, even if they exist mainly to promote the brand, are MASSIVELY profitable. In fact, they are one of the most profitable store chains in the world. By contract, I believe that Microsoft was always running most of their stores at a loss. Even for a massive company like Microsoft, continuously running an unprofitable division is hard to maintain.

thrwn_frthr_awy 6y ago
Also, Apple has continued to pay their retail employees throughout the closures. If the Microsoft stores were already struggling for profitability, closing the stores may have been the better choice rather than to having to layoff and then try to rehire.
- josephpmay 6y ago
  Except that they are keeping all of them employed.
- postingawayonhn 6y ago
  The article mentions that there will be no layoffs and the staff have already been redeployed to remote roles.
bredren 6y ago
I saw Ron Johnson speak around 2012 in San Mateo. He oversaw the initial rise of the Apple Store. I remember him saying Jobs told him there was basically an unlimited budget to make the stores a success. The difference is it only took Apple three years to reach $1B in annual sales.
- lotsofpulp 6y ago
  > The difference is it only took Apple three years to reach $1B in annual sales. It took far more than that to earn the trust of consumers. Microsoft decided to sit back, collect rent on Windows/Office, and let other business do the hard work of customer service and let their customers deal with malware on their laptops. Contrast with Apple, who put customer service front and center, opened stores that my parents could go to and talk to someone if they had a problem. They took ownership of the product. And now they are rewarded with the profits. Microsoft had all the cash in the world to make it happen. But instead, they put Candy Crush in the start menu.
  - loydb 6y ago
    > Microsoft had all the cash in the world to make it happen. But instead, they put Candy Crush in the start menu. And got rid of Pinball. :(
    - yellowstuff 6y ago
      https://devblogs.microsoft.com/oldnewthing/20121218-00/?p=5803 https://devblogs.microsoft.com/oldnewthing/20121218-00/?p=58...
      - blibble 6y ago
        that's one of the pathetic excuses I've ever read they're an OS developer and they can't spend a day figuring out a floating point bug? maybe redirect some of the time integrating Candy Crush
        mrguyorama 6y ago
        They don't own the code
        bcrosby95 6y ago
        According to the link: they licensed the code and had access to it. But none of them wrote it and they couldn't justify the days of debugging that would be required when they had millions of other LOC to test and port.
        jodrellblank 6y ago
        Windows 7 came out in 2009, at least three years before candy crush. > they're an OS developer and they can't spend a day figuring out a floating point bug? Maybe it’s bad to argue by appeal to authority, but I take Raymond Chen’s side that it was a hard problem to debug in the time available over some internet sneering that it must have been easy, any day.
        6y ago
- ridiculous_fish 6y ago
  > opened stores that my parents could go to and talk to someone if they had a problem Yes, the Genius Bars are just fantastic! You make an appointment and then you get help from someone knowledgeable, in person, for free. And that person is authorized to accept repairs, etc. The Big Idea of the Genius Bar is that it's there to help. It's not there to upsell like Geek Squad. It's not hoping you'll go away like typical CS reps. Its mandate really does seem to be "make Apple customers happy."
ChrisMarshallNY 6y ago
This is purely anecdotal. Take it with a grain of salt. We have a "high-end" Simon mall, in a town near where I live. It's quite "upscale," with Saks Fifth Avenue, Bloomingdales, etc. It has an Apple Store near the South entrance, and a Microsoft Store, near the center. The Apple Store is always packed. I haven't been there in a few months, so I have no idea what's going on with it at the moment, but it has always been jammed, when I have gone there; even at early or late hours. I have never found a time when it is not crowded. The Microsoft Store, on the other hand, usually has more staff than customers, with the staff playing XBox in the sitting area outside the store.
- gipp 6y ago
  Sure, but a large portion of the Apple store crowds has always been people just hanging around and goofing off on the laptops. IIRC it's policy in those places to always let people do that however long they want, even if there's clearly no intent to buy anything. I've always wondered what portion of those crowds are actually customers. EDIT: Yes, everyone, I understand the marketing and lifetime-value reasons for doing that. I'm just questioning the value of comparing crowd sizes as a direct measure of relative instantaneous revenue/success.
  - ChrisMarshallNY 6y ago
    That happens in many stores. I call them "store groupies." Around here, vape stores have them in droves. I remember them hanging around Science-Fiction bookstores; often using the back rooms to have D&D games. I think that every one of them becomes a customer, eventually. Many of them become evangelists, which can sometimes be even more valuable.
    - k12sosse 6y ago
      and store employees call them "loiterers". A herd of human waste, with no money or no intent to purchase anything.
      - 6y ago
basch 6y ago
The apple store crowd is roughly 7% people confused about the error that says backups have stopped working unless you pay $.99. wondering what they can do to make the error go away. Wondering what they can delete and how.
chasd00 6y ago
Apple store sales per square foot beat even Tiffany's and it doesn't take much room to display diamonds. https://chainstoreage.com/news/most-profitable-retailers-sales-square-foot-are#:~:text=1%20retailer%20in%20terms%20of,to%20research%20provided%20by%20CoStar https://chainstoreage.com/news/most-profitable-retailers-sal....
rschapman 6y ago
That's interesting to hear. Do you have inside knowledge on that? A former colleague in the HR space worked for Apple retail said that many of them were actually not profitable on the whole. They served lots of purposes but most of the value was intangible and not revenue driven. She/I may be wrong but it's counter to what I was told.
- sharkjacobs 6y ago
  There was a study which was in the news cycle[1] a few years ago that claimed that Apple stores were the most profitable retail space by square foot. [1] https://www.cnbc.com/2017/07/29/here-are-the-retailers-that-make-the-most-money-per-square-foot-on-their-real-estate.html https://www.cnbc.com/2017/07/29/here-are-the-retailers-that-...
josuepeq 6y ago
Revenue per square foot is high. Profit, not so much. The “family room” employees now make up most of the Apple Store staff. One can buy an iPhone anywhere, but same-day service to fix that iPhone is more limited. I mean, where would you go? The cost of payroll for Geniuses, Technical Specialists, Genius Admins, and Trainers, is quite a bit higher than for sales staff - higher pay and the larger headcount of the department. Because of this, any profit from the sales side is absorbed by the tremendous cost of operating their service business.

thrwn_frthr_awy 6y ago

Also, Apple has continued to pay their retail employees throughout the closures. If the Microsoft stores were already struggling for profitability, closing the stores may have been the better choice rather than to having to layoff and then try to rehire.

josephpmay 6y ago
Except that they are keeping all of them employed.
postingawayonhn 6y ago
The article mentions that there will be no layoffs and the staff have already been redeployed to remote roles.

bredren 6y ago

I saw Ron Johnson speak around 2012 in San Mateo. He oversaw the initial rise of the Apple Store. I remember him saying Jobs told him there was basically an unlimited budget to make the stores a success. The difference is it only took Apple three years to reach $1B in annual sales.

lotsofpulp 6y ago
> The difference is it only took Apple three years to reach $1B in annual sales. It took far more than that to earn the trust of consumers. Microsoft decided to sit back, collect rent on Windows/Office, and let other business do the hard work of customer service and let their customers deal with malware on their laptops. Contrast with Apple, who put customer service front and center, opened stores that my parents could go to and talk to someone if they had a problem. They took ownership of the product. And now they are rewarded with the profits. Microsoft had all the cash in the world to make it happen. But instead, they put Candy Crush in the start menu.
- loydb 6y ago
  > Microsoft had all the cash in the world to make it happen. But instead, they put Candy Crush in the start menu. And got rid of Pinball. :(
  - yellowstuff 6y ago
    https://devblogs.microsoft.com/oldnewthing/20121218-00/?p=5803 https://devblogs.microsoft.com/oldnewthing/20121218-00/?p=58...
    - blibble 6y ago
      that's one of the pathetic excuses I've ever read they're an OS developer and they can't spend a day figuring out a floating point bug? maybe redirect some of the time integrating Candy Crush
      - mrguyorama 6y ago
        They don't own the code
        bcrosby95 6y ago
        According to the link: they licensed the code and had access to it. But none of them wrote it and they couldn't justify the days of debugging that would be required when they had millions of other LOC to test and port.
      - jodrellblank 6y ago
        Windows 7 came out in 2009, at least three years before candy crush. > they're an OS developer and they can't spend a day figuring out a floating point bug? Maybe it’s bad to argue by appeal to authority, but I take Raymond Chen’s side that it was a hard problem to debug in the time available over some internet sneering that it must have been easy, any day.
        6y ago
ridiculous_fish 6y ago
> opened stores that my parents could go to and talk to someone if they had a problem Yes, the Genius Bars are just fantastic! You make an appointment and then you get help from someone knowledgeable, in person, for free. And that person is authorized to accept repairs, etc. The Big Idea of the Genius Bar is that it's there to help. It's not there to upsell like Geek Squad. It's not hoping you'll go away like typical CS reps. Its mandate really does seem to be "make Apple customers happy."

ChrisMarshallNY 6y ago

This is purely anecdotal. Take it with a grain of salt. We have a "high-end" Simon mall, in a town near where I live. It's quite "upscale," with Saks Fifth Avenue, Bloomingdales, etc. It has an Apple Store near the South entrance, and a Microsoft Store, near the center. The Apple Store is always packed. I haven't been there in a few months, so I have no idea what's going on with it at the moment, but it has always been jammed, when I have gone there; even at early or late hours. I have never found a time when it is not crowded. The Microsoft Store, on the other hand, usually has more staff than customers, with the staff playing XBox in the sitting area outside the store.

gipp 6y ago
Sure, but a large portion of the Apple store crowds has always been people just hanging around and goofing off on the laptops. IIRC it's policy in those places to always let people do that however long they want, even if there's clearly no intent to buy anything. I've always wondered what portion of those crowds are actually customers. EDIT: Yes, everyone, I understand the marketing and lifetime-value reasons for doing that. I'm just questioning the value of comparing crowd sizes as a direct measure of relative instantaneous revenue/success.
- ChrisMarshallNY 6y ago
  That happens in many stores. I call them "store groupies." Around here, vape stores have them in droves. I remember them hanging around Science-Fiction bookstores; often using the back rooms to have D&D games. I think that every one of them becomes a customer, eventually. Many of them become evangelists, which can sometimes be even more valuable.
  - k12sosse 6y ago
    and store employees call them "loiterers". A herd of human waste, with no money or no intent to purchase anything.
    - 6y ago

basch 6y ago

The apple store crowd is roughly 7% people confused about the error that says backups have stopped working unless you pay $.99. wondering what they can do to make the error go away. Wondering what they can delete and how.

chasd00 6y ago

Apple store sales per square foot beat even Tiffany's and it doesn't take much room to display diamonds. https://chainstoreage.com/news/most-profitable-retailers-sales-square-foot-are#:~:text=1%20retailer%20in%20terms%20of,to%20research%20provided%20by%20CoStar https://chainstoreage.com/news/most-profitable-retailers-sal....

rschapman 6y ago

That's interesting to hear. Do you have inside knowledge on that? A former colleague in the HR space worked for Apple retail said that many of them were actually not profitable on the whole. They served lots of purposes but most of the value was intangible and not revenue driven. She/I may be wrong but it's counter to what I was told.

sharkjacobs 6y ago
There was a study which was in the news cycle[1] a few years ago that claimed that Apple stores were the most profitable retail space by square foot. [1] https://www.cnbc.com/2017/07/29/here-are-the-retailers-that-make-the-most-money-per-square-foot-on-their-real-estate.html https://www.cnbc.com/2017/07/29/here-are-the-retailers-that-...

josuepeq 6y ago

Revenue per square foot is high. Profit, not so much. The “family room” employees now make up most of the Apple Store staff. One can buy an iPhone anywhere, but same-day service to fix that iPhone is more limited. I mean, where would you go? The cost of payroll for Geniuses, Technical Specialists, Genius Admins, and Trainers, is quite a bit higher than for sales staff - higher pay and the larger headcount of the department. Because of this, any profit from the sales side is absorbed by the tremendous cost of operating their service business.