Apple Stores: Brilliant Branding but a New Product Speed Bump

Tuesday Aug 7, 2012 by Jon Steiman - Co-Founder, Spottah

Apple TV is an aberration from every other Apple product. Rather than being an all-in-one device, Apple TV is a component that plugs into televisions manufactured by others. Apple, therefore, cannot control the entire experience and thus the overall experience isn’t that good. This is why you don’t see people camped outside for days waiting for the newest Apple TV.

The next and most obvious frontier for Apple is building an actual TV. This is definitely on the company’s mind; CEO Tim Cook was quite cagey when asked about his company’s plans at D10. An Apple TV set is technically feasible. Apple knows how to make beautiful large screens; the 27-inch iMac is a great example. And Apple knows how to take an existing product and totally reinvent it.

So if it isn’t technology, creativity or desire, what is holding Apple back from bringing a TV to market? My guess: Retail square footage. By most measures, Apple’s move into retail was brilliant. Retail enabled Apple to control the customer experience, and thus its brand. This is difficult to achieve when selling through independent channels like Best Buy or Staples. But the drawback is limited space for additional - and significantly larger - products like a line of TV sets.

According to RetailSails.com, the average Apple store is 7,886 sq ft. While I don’t have the exact figures, my guess is that the median is much smaller because there are handful of flagship stores at 20,000+ square feet and then hundreds of smaller footprints in regional malls. Either way, one thing is certain: the stores are cramped. Finding floor space to display 15 TVs ranging from 27 to 60-inches, plus hundreds of units of inventory, is no easy feat.

Big Box retailers will be better equipped to distribute an Apple TV. Since they already have space for TVs, it is simply a matter of taking space from a poor selling brand. Apple doesn’t have this luxury. Sure, Apple will no longer be selling the Apple TV “puck” but that will hardly make a dent in the space required.

Retail square footage will continue to be a hurdle. Apple, I predict, will enter the 3D printing market. Currently, there is a huge valley between hobbyist and enterprises. Thirty-six years ago, Apple was founded to fill a similar valley in computing. Today, Apple is the best equipped company to deliver to the masses a beautiful 3D printer and a “Blueprint Store.” To do this, though, Apple Stores will require significantly more square footage.

In summary, Apple’s move into retail was a branding homerun. But on the downside, the company now has less flexibility to bring new, physical products to market without simultaneously investing in retail expansion.

Jon Steiman is the CEO & Co-Founder of Spottah.  You can find this post, as well as additional content on his blog located here.  You can also follow Jon on Twitter (@jonsteiman) by clicking here.

< back to all blog entries

Categories: