Selling Apples All Over The World

Apple's entry into the retail business was greeted with scorn. Wasn't Gateway, Apple's superior in direct sales and in total unit volumes, bailing out of retail, chastened?

Apple's performance in the retail space has since been compared to Best Buy and to Tiffany's -- with Best Buy and Tiffany's trailing Apple. Apple's decision to acquire retail expertise before committing to a specific retail strategy turned out to be a good move: it led to good pre-market testing advice, and kept Apple from building stores that would fail like everyone else's.

Given that Apple's retail stores are now recognized as a success, the question becomes: what can Apple do to press its advantages, and when should we become concerned that will Apple run out of room to grow? [1] There's a user on dotMac who offers us some graphic insight how far Apple's pushed its growth (whole data set here):


Significantly to this observer, growth has increasingly included foreign store openings. Foreign sales serve to capitalize on two trends that are worth discussing a little. First, the United States dollar can really suck sometimes, and globally diverse sales are a hedge against both currency issues and against regional challenges. Secondly, though, non-US sales play to a latent strength in Apple's development platform. Cocoa is built for localization. Developers need not test against different language-specific versions of the operating system, as might be a risk on some other platforms, that might require bolt-on language packs that don't help applications' own localization, but can compile once and distribute apps that, when launched, will display the user's identified most favorite language that is supported by the application. Change language preferences and re-launch, and you get the app in a new language. One app for worldwide launch and for worldwide sale to folks wanting English, Spanish, Japanese, Chinese, Korean, French, Italian ... slick, eh? And the more Apple actually has customers demanding all these languages, the more valuable the feature will be. Developers wanting access to all these customers without wanting to make and support multiple different app versions will preferentially write for the platform.

You might think "hey, Microsoft already took first-place in the available-app race; Apple is a bit late." But suppose you were talking about a device in which Microsoft wasn't the leader in either installed systems or in offered applications -- like smartphones? Immediately reaching zillions of smartphone users with your new app, in their native language (assuming you can at least hire someone to translate your label's competently), would be very attractive, no?

Since Apple's smartphone development environment and its desktop development environment are both XCode and OS X, getting support for the desktop after luring developers to build apps for the smartphone seems a fairly short step. Add the worldwide application opportunity, and the possibility that enterprises can distribute a single device with a single set of installed applications in a single version for worldwide use by all personnel requiring any language the enterprise chooses to support with its applications, and one sees an interesting reason to invest in OS X and Cocoa in the future.

And an interesting reason folks might later find themselves persuaded to buy.

As Apple rolls out stores in new countries, it is better able to locally train personnel to support subsequent rollouts in the same country. A look at the pace of rollouts in Euroopean countries seems to bear out this hypothesis, and may inform observers on the likely trajectory of rollouts in China and other places only just now getting stores.

The fact that Apple's development tools run on MacOS X, and are themselves written in Cocoa, suggests that Apple's ability to encourage new developers in each of these markets is superior to that of some platforms whose localized support faces technical barriers. Also: XCode is available without additional charge with every installation of MacOS X, and upgrades are available to anyone with a no-charge, lowest-tier membership in the Apple Developer Connection.

Upshot:

• Apple retail stores seem strongly-associated with sales.
• Apple retail stores are being opened regularly.
• Apple retail stores are reaching countries that haven't got much Apple exposure yet.
• Apple's platform has features that make it more valuable the more linguistic diversity exists on the platform.
• Apple's GPS-enabled smartphone looks to sell like hotcakes worldwide when it launches next month.
• Apple's Mac business stands to benefit from network effects that improve the value of the platform on which the smartphone runs, because it is the same platform.

I intend holding Apple shares through the announcement of quarterly results for the period including the international iPhone launch. I expect to look at the then-existing store rollout data to see whether I am happy or deliriously happy with Apple's international performance. I will be paying special attention to any results we can ascertain from Apple's "App Store", its worldwide portal for selling smartphone applications to the entire international installed base in all supported languages (well, it's only these apps at launch, but iTunes Music Store was at one time just music and no television shows or films, too).

[1] Well, if you are Dell the question becomes whether there's a seat for you on this retail bus. Apparently, though, not bothering to stock merchandise turned out to be a bust. Palm's retail foray didn't pan out, either. Gizmodo's article, hilariously-supported-by-art, asks whether Microsoft will try retail next.