Apple Halts Expansion. Is it Desperation or Genius?

Apr 30 2009, 10:05am CDT | by Robert Evans

It's recently come in through the grapevine that Apple has cut back on new store openings this year. They've also stopped hiring new retail workers and cut back on hours, all part of a new cost-saving initiative in line with the recent drop in retail store profits.

While Apple still has yet to close a single store, this move may be a sign that Apple has hit the extent of how widely they can expand their retail empire. While Apple profits are the highest they've ever been their retail division isn't doing so well. Even Apple fanatics are looking to the Internet to buy their new gear. As the economic pinch continues, this trend is certain to increase across the board.

Cutting back on expansion is a smart move for Apple to make. They know that their retail outlets can't compete with online shopping, and so they're halting expansion before it becomes unprofitable. Apple stores are still quite profitable, but too many of them would have turned into a major drain on the company when profits start to slow down.

Apple's stayed in the game as long as it has by being prudent. They realize that physical retailers are quickly becoming less and less necessary. They'll always exist in some form, but speedier deliveries and consistently lower online prices will someday sound the death knell of the megamarts. Only the strong and the stylish will survive.

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Robert Evans
The excitement about new smartphones, tablets and anything mobile drive Robert to unearth the latest rumors and developments in this fast moving space. He adopted 4G as soon as it become available and knows where the mobile market is going.
Robert can be contacted directly at robert@i4u.com.