iPhone to be available at 2000 store fronts on launch
Apple's inaugural mobile handset, iPhone, will be available for sale at 2000 retail store fronts when it goes on sale for the first time next month, putting the device within reach of most US households.
During the sit-down, Apple retail chief Ron Johnson and Director of Mac Product Marketing Tom Boger informed the analyst that those store fronts would consist exclusively of Apple and AT&T retail stores. (That breaks down to approximately 160 U.S.-based Apple outlets and roughly 1840 AT&T wireless boutiques.)
"Apple affirmed its goal of June release for iPhone and expressed confidence in meeting its target of 10 million unit shipments in 2008 given iPhone's superior user experience, which Apple referred to as 'transformational,'" Neff wrote in a summary of his discussions.
He added that, in addition to iPhoneâs revolutionary touch interface and intuitive software capabilities, Apple is focused on differentiating iPhone from the rest of the pack by improving every facet of its user experience, including at the point of sale.
In regards to its retail store initiatives, Apple noted that it currently operates 181 stores worldwide (161 in US and 20 international) and will continue to expand its store presence, although at a measured pace that will be based on the availability of key real estate locations.
"In addition, for international store openings, Apple noted that its strategy is to focus on regions with high Apple installed base first (i.e., Japan, UK, etc.) and then expand to other regions," wrote Neff. "As part of its multichannel strategy, Apple noted that it is expanding its store-within-store (staffed by Apple employees) at Best Buy from 50 to 200 as Apple sees it as another way to reach its customers."
While there are concerns about potential execution issues resulting from Apple's rapid growth and broadening product portfolio, the Bear Stearns analyst said it appears to him that the company is managing its growth by leveraging resources across the company. For example, he said, the company has adopted the Leopard operating system for iPhone as well as Macs, which minimizes the strain on resources.
The Cupertino-based firm has laid out a "very selective" product roadmap, he added, with a particular emphasis on the timing of introductions and what products it has decided not to pursue. In fact, the analyst said, Apple noted that the coordination and close cooperation between different groups enable the company to provide superior user experience to customers.
Neff, who is maintaining all of his current estimates on Apple, holds an "Outperform" rating on shares of the company with a price target of $143 per share. His meeting with Apple executives follows a similar sit-down between UBS analyst Ben Reitzes and other members of the Apple's leadership earlier in the month.