Apple Stores, iPhone and iPad Are a Perpetual Sales Motion Machine

Last Updated Jan 26, 2011 3:35 PM EST

A recent Needham & Company analysis has shown an Apple (AAPL) secret success triumvirate: the iPhone, iPad, and Apple store. The combination of product design aesthetic and the smartest retailing operating in existence creates a marketing infrastructure that boosts the products, the outlets and the brand, all at the same time.

You can't over-emphasize how important the stores are to Apple's current success. It's not just having its own retail outlets. If that were true, Microsoft's (MSFT) efforts to open its own stores would be a sure win. Not that you could tell from the outside, because Microsoft doesn't report the results separately. The company plans on building new stores, but they lack the cool factor of Apple stores.

That's cool as in cold hard cash. Here are some of the figures (and a few implications) from analyst Charlie Wolf at Needham:

  • Last quarter, Apple stores showed 95.2 percent year-over-year growth. Same store revenues were up 69 percent.
  • International stores were 27 percent of the 323 open by the end of the quarter. But as Apple saw 62 percent of its overall sales internationally, there's a lot of room to open more stores.
  • Although the stores were initially intended to be 6,000 square feet, some are far larger, and the average is 7,740 square feet per store.
  • With a total of 2.5 million square feet of retail and annual store revenues of $47. million, Apple stores see an average of $6,190 per square foot of space. That's so far beyond other retailers as to entitle Apple to a class of its own.
  • The stores account for about 20 percent of the estimated number of Windows users who switch to Macs.
  • Visitors per store have increased three-fold since 2002.
Given that no other retailer has managed to even get in the neighborhood of Apple's success, the chance of Microsoft pulling that off is about zero. Google hasn't even tried. That leaves Apple with an enormous advantage in pushing the iPad and iPhone. And, according to Wolf's estimates, non-Mac revenue -- those iPads and iPhones -- jumped 62.3 percent in Apple's FY 2010. Last quarter? Up by 168.4 percent, year-over-year.

The press on the products brings people into the stores. The stores grab attention in their locations and pull people in to buy the products. They all work together to push the company's brands. Android has made great strides, but how long can that hold out, especially with the lawsuits mounting and no indemnification for the hardware manufacturers? Apple's plan has been virtually flawless, with stores and mobile forming interlocking pieces of a foundation for success.

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    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.