As it turns out, this is the single most profitable retail store on the planet. Not even Tiffanys in New York makes anywhere near as much money per square foot as the Apple stores do.

And yes, people warned Apple about Gateway. I was friends with the guy who was a top VP at Gateway then, and I can tell you top executives at Gateway had no clue how to deal with their situation. Apple did their homework, they had the right product and they have the single-minded belief in what they are doing that doesn’t exist anywhere else.

I nearly agreed with you until I read the news about this new store opening.

Don’t you agree that an 8,500 square foot store for a company that sells a hand-full of products is newsworthy? What about the fact that “the size and scale of the store, and the amount of stone that was used both eclipse any previous Apple store project”? Ok, we can skip the “stone” issue, but at least the article was newsworthy enough for you to read it!

And in addition, you added your comment to this site :); so you just contributed to paying the salary of someone. That is why they write articles and report new about Apple.

Amazing the way Apple manages to get the media to reprint the same story with new headlines dozens of times, with that kind of free cover, you could sell anything for twice the price.
Whats next, “Apple staff eat lunch”
or “Apple sells stuff to people”

In business, often the difference between profit and loss is margin, and Apple’s margin is BIG. This year, 2009, Apple’s gross margin is over 30%, whereas Gateway’s margin was around 5% when they were creating all those stores.

Why do companies pay big money to put their ads in Times Square? This is Apple’s way of doing Time Square – the fluff (all that glass) enhances the brand, and the store pay’s the bill. So look at the building; it’s much more than advertising (that is, to sell products). It’s about branding. All Best Buy can do for Apple is to sell Apple’s products. But it is up to Apple to increase the strength of the Apple brand. Still, you ask, why all that glass – how does it enhance the Apple brand? Simple, it’s called “Cool”. You may think it is boring, but the kid’s love it.

Why in the year 2009 does a company with a proven track record selling online suddenly jump to open brick and mortar stores and at what cost?

Hopefully Apple reviewed Gateways play book and came up a different game plan. Gateway too had a brilliant idea to open Country stores across the US. People could now see the product before they shelled out the cash; brilliant! They were very popular and so they decided to expand and expand they did. What Gateway failed to realize was those first couple of stores had tons of sales from people that didn’t live anywhere near those stores. Often times driving great distances just to see and purchase the product. But 349 stores later the profits turned into expenses. Adding insult to injury and further complicating the justification for those stores several pre-built models became available on the shelfs of every Office Max. Only a few years after they reached 349 stores they closed them all down. Where are they now?