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Apple Marks 10 Years of Retail Store Success
By Adam Dickter
Posted: May 19, 2011 2:40pm PDT

From mistake to blockbuster success -- that's the story of Apple's retail stores at the 10th anniversary. Apple boldly opened its first store in Virginia as computer maker Gateway was closing its stores. Now Apple is reportedly planning a refresh of its stores. But some Apple store employees are expressing dissatisfaction and want to unionize.

Ten years ago, Apple CEO Steve Jobs offered a "private" video tour of Apple's inaugural retail store at a mall in Tysons, Corner, Va. The proud proprietor showed off areas dedicated to home and professional users and invited customers to come and see the company's latest products and "see what it's like to have wireless connection to the Internet," which was a big deal at the time.

In the video, discovered on YouTube by The Washington Post, Jobs also shows off the software gallery; shelf space for non-Apple products, including Sony camcorders and Palm Pilots; and stands behind the very first genius bar, with the disclaimer, "I'm not a genius."

Today, plenty of business analysts and Apple shareholders may disagree, as Apple now has 300 retail stores around the country, a key component in the blockbuster sales engine that has made Cupertino, Calif.-based Apple the eighth most profitable company in the U.S. and number 35 in this year's Fortune 500.

Risky Business

The direct retail push was widely considered a risk. BusinessWeek at the time said the stores might be "one step forward, two steps back in terms of getting Macs in front of customers" because it would take away business from Apple's distributors.

"Given that at that point Gateway was in the process of closing all their stores, I'd say it was a bold move, and at the time many predicted failure," said technology analyst Michael Gartenberg of Gartner Research.

He was referring to the Irvine, Calif.-based Gateway, which saw its fortunes slip after the burst of the dot-com bubble in the late 1990s and whose final outlets closed in 2004.

"Apple's success at retail underscores the level of attention they have paid to every part of the retail process and become a model for the retail industry," Gartenberg added.

With sales of iPads, iPods, iPhones and Mac computers booming, Apple is reportedly getting ready for an "Apple Store 2.0" refresh, with a heavy emphasis on personal setup of devices, according to reports.

In another clever move, reports said, the company may replace conventional signs around the stores with interactive iPads, which serve the purposes of allowing quick, detailed product information (and perhaps reducing staff demands) as well as promoting the tablet computer, which has had sales of more than 15 million in just more than a year.

The blog 9 to 5 Mac also said the company will also create bigger, better electronic displays and launch a new app for personalized store visits. There are also reports of a new product launch to commemorate the anniversary.

State of the Union

It's not all wine and roses, though.

Macworld reports that a group of workers in California's Bay area -- Apple's backyard -- are using the anniversary as an opportunity to get press attention for an effort to unionize. A person claiming to work at one such store told the magazine there are concerns about "break schedules, training opportunities, the selection and hiring process for internal candidates for open positions, and wages."

A group calling itself the Apple Retail Workers Union sent a statement to Macworld saying "we work in one of the most demanding retail environments while suffering through unfair treatment and compensation, among many other various issues ... We deserve better. Our time has come."

Apple didn't respond to our request for comment in time for publication and didn't respond to Macworld.

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