Apple Remodels Stores

Ron Johnson, Apple's SVP of Retail, has been talking to USA Today. He says that Apple will be opening 25 stores this year. This is down a little from the forecast of 35 - 40 given by CFO Oppenheimer at Apple's Q1 conference call. We are told that three of these store openings are to be in Europe - one in France, one in Italy, and one in Germany.

Johnson also explained that Apple plans to remodel some 100 of its stores this year, to make room for more customer training and more display space. The Genius Bar space is going to be increased by some 50%, and new display tables will enable 'twice the amount' of Macs and other products to be on display.

Despite this on-going investment in remodelling their stores, Johnson acknowledged that the recession has affected Apple's retail footfall. He says that while it is still strong, traffic is certainly down on last year.

HP Nosedive

Hewlett Packard's 09Q2 numbers tell a very mixed story, and the supporting slide deck tells this story the best through its tables and charts. Overall sales are down by just over 3% compared with the same quarter one year ago [although at constant currency they were up by almost 3%]. But, PSG's [the Personal Systems Group] sales were down 19%, while IPG's [the Imaging and Printing Group] sales were down 23%.

PSG's desktop revenues fell by 24%, with notebook revenues falling by 13% year-on-year. But when measured by units, desktop sales were down 13%, while notebook sales were up by 14%.

IPG's hardware units were down 27% year-on-year, with consumer segment [principally ink jet printers] sales down by 23%, and the commercial segment [principally laser printers] sales down by a whopping 36%. Supplies revenues - for many years, the major contributor to HP's profits - were down 14%.

Overall, HP's figures are a better indication of the current state of the market than Intel's recent pronouncement that we've reached the bottom of the market. HP is principally a channel-centric company, using a two-tier distribution model in EMEA. That may mean that these numbers have, in some ways, been distorted by de-stocking activity at their wholesalers and also at the resellers and retailers. But that, should only be a one-time activity, and we saw evidence of de-stocking last quarter. So we must presume that HP's figures represent the reality of the marketplace, and that it is the on-going twin perils of price deflation and shrinking demand.

DSGi Sells

Wal-Mart's Electronics

Commission Ends

Carphone Warehouse has announced that 

Differentiation

While price points will always be one element in the war for market share, PCs aren't all the same, and so price can't be the only differentiator. In a recent article - Decoding the Hype on Gadgets - David Pogue, the personal technology columnist for The New York Times, says that: "The cheapness of a computer is certainly an important factor. In fact, to some people, it's the single most important factor."

But, Pogue goes on to say that: "When something is made exclusively to be cheap, there's a price to be paid somewhere else. You may love your PC's cheapo price, but you may not love the manufacturer's low-rated, outsourced customer support. Or the ugly patchwork of stickers, logos and panels underneath. Or the huge, ungainly power brick. Or the obnoxious pre-installed junk-ware that drags the thing to a crawl from the first time you power it up. Or the annual antivirus-software subscription that you'll need for Windows. Or the time you'll lose trying to learn the potluck programs on your new PC from different companies, each with a different interface and conventions."

That's quite some rant from - it's clear to see - an avid Apple fan. But it could just as easily be about the differences between different PC brands - or, indeed, almost any core technology product. So why is it that so many retailers simply line up products, irrespective of brand or functionality, in a linear sequence based solely on price? That's just lazy retailing, and as a result, it's no surprise that consumers - especially those who aren't natural propeller heads - have precious little idea about how to choose the right product for their needs.

Attach

IDC in the US has just released some headline data from its Beyond-the-Box survey. This survey tries to assess the size of the PC 'basket', while making a distinction between consumers and small businesses.

Within the first 12 months of buying a PC, a US consumer will spend an average of $0.87 on additional PC-related purchases for every $1.00 spent on a PC. More than 50% of the survey respondents buy these accessories in retail stores at the time of purchase, while a further 20% or so will buy from retailers' online web-shops.

For small businesses, more than 50% of their accessories budget is spent at the time of purchasing a PC, while a further 26% of their budget is spent within the next three months. Small businesses [defined by IDC as those with less than 100 employees] spend an average of $284 on accessories and such like for each PC they buy.

Simon Herrick

Simon Herrick, CFO at Kesa, was one of the attendees at last week's World Retail Congress in Barcelona. According the The Observer, Herrick's hopes for his firm is today's tough climate were taken from a quote by Emmanuel-Joseph Sieyes who, when asked what he had done during the French Revolution, answered 'Survived'".