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.
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.”