Tim Cook Wants To Sell More iPhones In Apple Stores, Which Will Be Tough

iPhone 5 Apple Store

Apple’s CEO wants to sell more iPhones, but only in his stores. The iPhone is Apple’s cash cow with its high profit margins, and it creates a “halo effect” that causes customers to buy other Apple products.

Less than 20% of iPhones are currently sold in Apple Stores, and Cook won’t stand for it. Despite the fact that 80% of customers buy their iPhones elsewhere, 50% bring them into the Apple Store to get serviced. If Cook wants the sales/repairs ratio to improve, there’s a lot of work that needs to be done.

new_iphone_sales_by_outlet

Consumer Intelligence Research Partners has provided AllThingsD with some figures on how iPhone sales are broken down between outlets. As you can see, AT&T and Verizon make up the bulk of sales, while Apple has been on a steady decline since last year.

9to5Mac first reported that Cook wanted to swing the pendulum back into Apple’s favor. “Even though 80% of iPhones are not sold at Apple Stores, 50% of all serviced iPhones are troubleshooted, repaired, or replaced at Apple Store Genius Bars. Cook reportedly hinted that he would like those numbers to be more in line,” according to the report.

One of the biggest issues with Apple selling more iPhones itself is a simple matter of size. There are only 250 Apple stores in the U.S. compared to 9,000 carrier stores that sell the iPhone. Another probable factor is that customers associate buying a new phone with their carrier, not the device’s maker. When an iPhone breaks, it’s logical to ask Apple to fix it. That train of thought doesn’t usually apply when buying a new device, at least in the U.S., and that works against Apple.

Carriers have been trying to drive customers away from iPhones and to Android handsets for quite some time. When someone walks in the AT&T store and is convinced to buy the newest Android device because the carrier makes more of a profit off the sale, Apple loses a potential customer.

Apple is doing what it can to get people to buy iPhones within its own walls. The iPhone is part of the company’s “Back to School” promotion for the first time this year, and there’s a new trade-in program rumored to be in the works. “When Apple debuts a new iPhone, its stores typically run at capacity — canceling vacations, hiring part-time staff, etc.,” according to AllThingsD. “Pushing the percentage of all iPhones sold through Apple Stores from 20 percent to 50 percent would likely require similar efforts.”

  • TheMartinDobson

    Half of the issue is having to make a daily appointment to get one at the apple store. My Ex and I went in to get her one a few years back and even though the store wasn’t overly busy (by Apple’s standards) we still had to make an appointment to reserve a phone and to get it signed up with one of the Apple Employees there… which was for after a certain time the following day. (?) We walked down to Rogers (I’m in Canada) and had one almost immediately. Hopefully this has been fixed.

  • technochick

    Half of the issue is having to make a daily appointment to get one at the apple store. My Ex and I went in to get her one a few years back and even though the store wasn’t overly busy (by Apple’s standards) we still had to make an appointment to reserve a phone and to get it signed up with one of the Apple Employees there… which was for after a certain time the following day. (?) We walked down to Rogers (I’m in Canada) and had one almost immediately. Hopefully this has been fixed.

    I have been dealing with apple stores for the last five years and at least in the US you never had to make an appointment to buy anything. Get it serviced yes, but not buy

    One easy way they can deal with the issue is new rules. No carrier store or other third party that is within say 30 miles of an Apple store can sell the iPhone, or carrier enabled iPads

  • Zod Buster

    Timmy! just start undercutting the prices ..be the cheapest source… simple business .. let go of your ego..

  • JimRPh62

    I’m an Apple fan, but a currently cash poor fan. I don’t own a smartphone. Though I love my old iPod Touch and the apps on it, I’m preparing to buy an Android phone because it’s cheaper than an equivalent generation iPhone, plus has more memory for the lower price. I’ve looked at the Google Play store and figure I can replace, if inadequately, the app functions I need. Sadly, Apple is a wonderful innovator, but their products are mostly for an elite class that can afford to pay for the nice gadgets with the prettier apps. I used to be on the lower rim of that group, but no longer. Now, I simply admire the view from below and spend my smaller amount of money elsewhere.

  • Lee Scott

    @JimRPh…i am an apple loyalist…i also sell phones for a 3rd party seller for att, sprint & verizon….#1 ive had the iphone 5, but for financial reasons had to let it go…i then switched to the note 2, quad core, 2gb ram, the whole shabang….i had the note 2 for all of 5 weeks, HATED IT! i then craigslisted it for even trade for an iPhone…i ended up getting the 4s, i can absolutely tell you my 4s (3g only) is 1000 times better experience than my note 2 was…constant never ending force closes, hardware failure (switched twice in 5 weeks), constant state of war of android software vs samsung software….BLEH! is the absolute best way to describe my 2nd android experience, i had the evo 4g also a few years ago before apple…

    with all that said i can absolutely assure you you can go into any 3rd party store, radioshack (where i work) and get a 4S for just $50 on contract. if you have that ipod touch you say you have and it’s not cracked or broken, with charger you can get possibly up to $50 trade value, therefore that will make your 4S free….i am telling you beyond a shadow of doubt, if you’re an apple fan, you will absolutely regret android, especially getting any kind of lower end device…android is good for what it is, people who haven’t experienced apple…that’s a fact, i know some go to android after apple, but many goto apple from android…ive been both ways and can attest, android at any price point, is still android….bleh!

  • joewaylo

    If they really want to sell more iPhones they should think about opening more apple stores locally first in lucrative cities with a high population in the $300k homes. Not just metropolitans. Most of the lucrative cities have tiny chain stores. Best Buy, AT&T, etc. but they don’t have an Apple Store officially there.

  • revdrcr

    Apple surely needs a wider geographic distribution for Apple stores. It would be interesting to know what zen-like logic has been used for locations up to this point. For example, in NYC, there must upwards of 6 or 7 Apple stores. I live in upstate NY, in the Capital region (Albany, Troy, Schenectady, Saratoga) and we have only one! There is an Apple store in Jackson, MS (state capital), but none in Columbia, SC (state capital) Go figure. Another factor is Apple Care Plus. Since it’s available on any iPhone purchased from any retailer, Apple stores are definitely going to see more phones brought to them for repair.

  • GunzRx

    @lee scott I’d say that I prefer a Z10 tbh. Best way is to offer something or market apple stores more, because apple already is the only mfg to do OTA updates all the time, if anyone can steal sales from carriers apple can.

About the author

Alex HeathAlex Heath is a senior writer at Cult of Mac and co-host of the CultCast. He has been quoted by the likes of the BBC, KRON 4 News, and books like "ICONIC: A Photographic Tribute to Apple Innovation." If you want to pitch a story, share a tip, or just get in touch, additional contact information is available on his personal site. Twitter always works too.

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