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Apple wasn't selling commodity PCs and had the profit margin to operate stores on extremely expensive real estate. The stores themselves ended up being advertis

• gumby 5y ago
  That was not the analysis at the time. Also back then they didn’t have the fat margins. But the dealer network was thin so the risk of losing the channel wasn’t the risk people thought it was. I’m actually surprised they did as well as they did.
  • selectodude 5y ago
    Apple's gross margin was always pretty high even if their fixed costs made them highly unprofitable. I'll grant that the Apple Store concept was a hail mary but they weren't a company losing money on every computer and hoping to make it up in volume as Dell and Gateway ended up being at the time. They had the cashflows to make the concept work.
    • gumby 5y ago
      We're talking about 2001 when apple's revenues were declining and it was losing money, though it had been in even worse shape a few years before. The stores were part of a Hail Mary.