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Fortune: ‘Why Apple is the best retailer in America’

Following Apple being named to Fortune’s list of most admired companies, the magazine has published an interesting article on the beginning of Apple’s retail store effort. “I started to get scared,” said Apple CEO Steve Jobs about depending on large retailers to sell Macs before Apple’s first retail store was opened. “It was like, ‘We have to do something, or we’re going to be a victim of the plate tectonics. And we have to think different about this. We have to innovate here.’” Apple’s 174 stores, which each attract 13,800 visitors a week on average, now produce sales of $1 billion a quarter for the company. The average Apple Store generates sales of $4,032 per square foot a year—more than Saks, Best Buy, and Tiffany & Co.

Jobs told Fortune how he helped kick off the retail effort. “We looked at it and said, ‘You know, this is probably really hard, and really easy for us to get our head handed to us.’ So we did a few things. No. 1, I started asking who was the best retail executive at the time. Everybody said Mickey Drexler, who was running the Gap.” Jobs then went after Ron Johnson, then a Target executive, to run the retail store operations. “One of the best pieces of advice Mickey ever gave us was to go rent a warehouse and build a prototype of a store, and not, you know, just design it, go build 20 of them, then discover it didn’t work,” said Jobs. Interestingly, the first Apple Store prototype was scrapped, delaying the launch of the first store by 6-9 months.

Another interesting detail in the article is that the Apple Store Genius Bar was conceived after the majority of a focus group told Johnson that the best service experience they’d ever gotten was from a hotel concierge. “When we launched retail, I got this group together, people from a variety of walks of life,” says Johnson. “As an icebreaker, we said, ‘Tell us about the best service experience you’ve ever had.’” Of the 18 people, 16 said it was in a hotel. “We said, ‘Well, how do we create a store that has the friendliness of a Four Seasons Hotel?’” The answer: “Let’s put a bar in our stores. But instead of dispensing alcohol, we dispense advice.”

San Francisco public transit warns commuters about iPod theft

Like many other recent warnings across the U.S. and abroad, San Francisco’s rail system has begun informing commuters that the iPod’s white earbuds are magnets for thieves. “Don’t be a target: Use earbuds other than the standard iPod white, or other aftermarket headphones,” the Bay Area Rapid Transit District, or BART, is warning in fliers distributed at the entrances to stations. “iPod theft is not unique to BART; it is a crime of opportunity occurring when an individual is seen wearing the familiar white iPod earbuds.” The flier states that 11 percent of robberies on the BART system were iPod thefts.

Case-mate debuts Clip for 2G iPod nano

Case-mate has announced the Clip, a plastic holster for Apple’s second-generation iPod nano. “The Clip perfectly grips the slimmer shape of the iPod nano 2G, and clips onto just about anything—a pocket, a purse strap or the outside of a briefcase or tote,” says Case-mate. “It is ideal for those who want quick or constant access to a docking station or voice recorder.” The Clip retails for $10.

Elecom Portable iPod Speaker Charger introduced

The Elecom ASP-P100 Portable iPod Speaker Charger ($59) is a combination iPod speaker system and charger. Available in black or white colors, the Elecom device draws power from an AC adapter or USB connection to provide audio playback and charging to a docked iPod. It can also do playback using 4 AA batteries and has integrated volume controls. The Elecom Portable iPod Speaker Charger works with fifth-generation iPods and iPod nanos.

Apple seen expanding use of flash memory

American Technology Research analyst Shaw Wu said that recent supply chain checks suggest that Apple plans to expand its use of NAND flash memory in iPods and Macs. In addition to a new “subnotebook” that will use NAND flash for its primary storage, Wu said Apple plans to soon have an all-flash iPod lineup. “Our sources indicate that Apple plans to migrate the rest of its iPod product line to NAND flash from HDDs (the current vPod is the only model remaining); however, fairly low price points and customer appetite for high storage capacities will likely prevent this from happening until late 2007-2008,” Wu said. “In addition, we are picking up that a widescreen vPod will not likely ship until after iPhone ships in the June timeframe to not take away from iPhone’s launch.”

Mix: Apple CFO, Google, (PRODUCT) RED, TiVo/Unbox

Speaking at the Morgan Stanley Technology Conference yesterday, Apple chief financial officer Peter Oppenheimer discussed the Apple TV and iPhone, as well as Apple’s retail plans.

Google CEO and Apple board member Eric Schmidt said Monday that Google and Apple are working together on “many more” new projects, which he did not identify. Schmidt said Google and Apple are “doing more and more things together. We have similar goals, similar competitors.”

(PRODUCT) RED items such as the special edition iPod nano have raised only $18 million worldwide for the HIV/AIDS charity. “The disproportionate ratio between the marketing outlay and the money raised is drawing concern among nonprofit watchdogs, cause-marketing experts and even executives in the ad business,” reports AdAge.

TiVo today announced that the Amazon Unbox movie service is now available to TiVo subscribers. The service enables TiVo users to download TV shows and movies from the Unbox store and watch them on their TV.

Creative intros first iPod speaker systems

Following a patent settlement with Apple last year, Creative Technology has officially introduced its first “Made for iPod” speaker systems. Announced only in Japan, the two portable, all-in-one systems include the Creative PlayDock i500 (29,800 Yen; shown right) and the Creative TravelSound i (17,800 Yen). The PlayDock i500 features a built-in subwoofer, charging iPod cradle and wireless remote. The more compact TravelSound features USB connectivity and can be battery powered. At January’s Macworld Expo, Creative displayed a number of iPod speaker systems and introduced its first iPod product—the Xdock Wireless, an iPod audio system that transmits music in the company’s “Xtreme Fidelity” format.

iTunes 7.1 update eases Vista problems

In addition to Apple TV support and other new features, the iTunes 7.1 update released yesterday also includes fixes for several Windows Vista issues, though a number are still unresolved. “Apple has released a new version of iTunes that addresses a number of compatibility issues with Windows Vista,” the iPod maker says in a new support document. “iTunes 7.1 is recommended for use with most editions of Windows Vista, however, Apple is actively working with Microsoft to resolve a few remaining known issues. This document will be updated as more information becomes available.”

Roth debuts vacuum tube amplifier with iPod dock

Roth Audio has unveiled the Music Cocoon MC4 ($769), a vacuum tube amplifier with a built-in iPod dock. Roth claims through the vacuum tube style design you’ll be able to hear “a real warmth and dimension” to the music you are listening to. Other features include power output of 13 watts (x2), speaker output with short circuit protection, volume control, iPod charging and an included remote control. The device also sports a 3.5mm jack on the back for connecting other devices. [via Gizmodo]

Keyspan releases TuneView remote update

Keyspan has released updated firmware for its TuneView iPod remote. The update increases scrolling speed, adds an ability to jump to a specified first letter within a large list, and improves overall wake-from-sleep performance. The TuneView remote can be updated by connecting it to the USB port on a PC or Mac and loading the new firmware. The $179 remote, released late last year, features a color LCD screen and 2-way RF connectivity that allows you to browse and manage an iPod throughout your house.

Intel plans chip for iPhone competitors

Looking to grow as a chip provider for portable devices, Intel CEO Paul Otellini said his company is readying a low-power chip designed for portable multiple-application devices that will compete with Apple’s iPhone. “Virtually every computer and handset manufacturer is struggling to figure out how they’re going to compete with Apple’s iPhone,” Otellini told analysts and investors at Morgan Stanley’s Technology Conference. “If we get the power and performance [of the Intel chip] right, it’s going to be a killer combination.” Otellini said the chip will be available later this year. Intel is the sole supplier of processors for Apple’s Mac computer lineup. There has been varying reports on who the supplier is for the iPhone processor, with most believing it to be Samsung or Marvell.

HoMedics intros iSoundSpa iPod alarm clock

HoMedics is offering the iSoundSpa ($80), a “Made for iPod” alarm clock that lets you wake up to your iPod, radio, beep tone, or nature sounds (ocean, rain, night, waterfall, brook, and sunrise). The iSoundSpa has a docking station which charges a docked iPod while in use and makes use of inserts to fit most iPod sizes. Time can be viewed either on the large digital LCD display or projected onto your ceiling via a blue light.

iTunes 7.1 shows international video, Apple TV details

In addition to Apple-documented changes from iTunes 7.0 to version 7.1, released today, several more interesting details have been discovered in the software and detailed by iLounge’s editors.

One change, a list of countries for which parental controls can be applied, shows Australia, Canada, Ireland, New Zealand, and the United Kingdom as newly selectable options for Ratings standards used outside of the United States. All of the countries save for the United Kingdom now have both TV and movie ratings; the United Kingdom now has selectable movie ratings, but not TV ratings. While not conclusive, the addition of this feature suggests that the iTunes Store will soon sell video content across all six of these territories.


Additional text discovered within the iTunes software reveals that it will support a maximum of five synchronized Apple TV hardware units at once, a previously unknown limitation. For additional information on these and other updates to iTunes 7.1, including full-screen Cover Flow and more, check out our new article, Instant Expert: Secrets & Features of iTunes 7.1.

Apple releases iTunes 7.1 update

Apple today released iTunes version 7.1. According to the release notes, the update adds support for the Apple TV, which is expected to ship later this month, as well as a new full screen Cover Flow view and improved sorting options. “Using iTunes 7.1, you can now enjoy your favorite iTunes movies, TV shows, music, and more from the comfort of your living room with Apple TV,” says the company. “iTunes 7.1 also supports a new full screen Cover Flow and improved sorting options to let you decide how iTunes should sort your favorite artists, albums, and songs.”

Apple ranked among most admired companies

Apple ranks 7th on Fortune magazine’s 25th annual list of the most admired companies. “You could say that Apple has landed—not only on our street corners and in our malls but also, for the first time, on the top ten of our Most Admired Companies list,” writes the magazine. “Apple’s peers have watched it upend industries from computers to music. And now it’s become the best retailer in America. In 2004, Apple reached $1 billion in annual sales faster than any retailer in history; last year, sales reached $1 billion a quarter. And now comes the next, if not must-have, then must-see, product (iPhone).” To create the magazine’s top 20, Fortune survey partners at Hay Group asked 3,322 executives, directors, and securities analysts to select the 10 companies they admire most.

Tune-In Bed pipes iPod music through headboard speakers

The Tune-In Bed ($700-$1000), currently for sale through Pottery Barn Teen, has audio input connections which let you hook up an iPod so you can listen to music through two four-inch speakers built into the headboard. The bed, which is available in twin, full and queen sizes, has a volume control knob and a pocket to hold the iPod as music plays.

University of Virginia students overwhelmingly choose iPod

Some 67% of first-year University of Virginia students own an iPod, according to the school’s annual technology survey. For the past 10 years, U.Va. has questioned every new student about the technology they bring to school—from their operating system to game console. In addition to the iPod usage, this year’s survey of 3,092 students also found that 20% of first-years are using Macs, which is up from just 3% in 2002.

“The question is, what is it taking the place of?” said UVa sociology professor Allison Pugh of the iPod. “If it is replacing a game of pick-up basketball, then the university is a poorer place because of their prevalence. If students are using iPods to drown out dorm noise so they can study, say, or to entertain themselves when they go running, then iPods aren’t necessarily a bad thing. Studies show that young people spend almost 2.5 hours listening to music every day. iPods are probably tapping right into that culture.”

Forums Friday: Black Docks, Season Passes, HDD2

Always hopping, the iLounge Discussion Forums are full of interesting topics this Friday; here’s a sampling of what your fellow iLoungers are talking about:

Everyone knows that Apple only sells white iPod docks - but why? Black iPods - and, of course, nanos - continue to be popular. Several readers discuss black Apple Dock alternatives for the iPod.

If you’ve bought an iTunes Store Season Pass to a TV show, share your impressions in this thread. A user’s thinking of taking the plunge and buying into the iTunes video library; iLounge forum moderator Audrey offers some helpful pointers. What do you think?

Now that DLO’s much-promoted HomeDock Deluxe 2.0 has been released, readers are beginning to put their just-received units through their paces. If you still have questions after reading our just-published First Look, dive into the forum discussion.

These posts - and literally over 1,000,000 more - are yours for the reading in the iLounge Forums. Take a peek today and see what you’ve been missing!

AT&T CFO: Up to 75% of iPhone buyers will be new customers

Up to 75 percent of iPhone purchasers will be first-time AT&T wireless subscribers, AT&T Chief Financial Officer Rick Lindner said this week. “The majority of those customers, two-thirds to three-fourths, will be coming from outside of our current wireless customer base and that’s a good thing,” Lindner said during a speech at a Merrill Lynch conference. The iPhone is likely to draw more customers to AT&T stores “at the launch and throughout the rest of the year,” Lindner said. “Creating more traffic in the stores means more sales.” AT&T (formerly Cingular) will be the exclusive U.S. carrier of Apple’s iPhone when it launches in June.

Mix: Apple COO, The Winner, Blockbuster, iPod mini drive

Apple Chief Operating Officer Tim Cook gave a presentation and took part in a Q&A session at this week’s Goldman Sachs Technology Investment Symposium. Cook discussed the iPhone, though no new details were revealed.

Apple’s iTunes Store is now selling the first six episodes of Fox’s The Winner in advance of the show’s March 4th premiere.

Blockbuster is in talks to buy Movielink as “a way to speed its entry into the online movie-downloading business.” Blockbuster would reportedly pay less than $50 million in cash and stock for Movielink, which is owned by five major studios.

GeekTechnique has posted an article on how to replace an iPod mini’s MicroDrive with a 4GB Compact Flash card.

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