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Apple's Retail Strategy

Techstination feature for Tuesday, November 25, 2003

Apple's retail store strategy starts to pay off. Bloomberg Boot Camp, a report on today's technology. Apple Computer opened its first retail store two and a half years ago. Now it's up to 70 stores in the U.S... .and it's about to open up another in the famed Ginza district in Japan. Ron Johnson is Apple's senior vice president for retail...

"Apple is a very popular brand in Japan. A few years ago, when personal computers were really reaching their hey day, we had almost 20 percent market share. In Japan, there's a great history of European brands, American brands opening stores and people like to buy western things. And we think putting a great store on the most important shopping street, really in the world, will be an amazing thing."

In the last quarter, Apple did 200 million dollars worth of business in its stores... and for the first time... they were profitable. The stores give the company a chance to show off its chief advantages over the competition... design... and ease of use. The iPod digital music player, says Johnson, is proving to be the big draw...

"I've personally been in retailing for 20 years... I was at Target for 16 years. I've never seen a product sell at the rate of the iPod. At the SoHo store, for the last three months, every six minutes, on average, we've sold an iPod. And this is a 299 to 499 dollar item."

Apple is hoping its iTunes digital music software and online music store... will generate even more iPod interest. Bloomberg Boot Camp, I'm Fred Fishkin.