New iPad to Be Sold at Wal-Mart First

http://www.bloomberg.com/news/2012-03-15/wal-mart…

Apple is apparently going to start selling the new iPad in Wal-Mart stores starting at midnight tonight, 8 hours ahead of Apple stores opening tomorrow.

Has Apple ever done something like this before? I thought they were keen on ensuring that their own stores were the best places to buy Apple products. Why would they want people lining up in front of Wal-Mart rather than in front of their own stores?

 
Connor:
Wal-Mart paid Apple $15MM in order to be the priority seller.
15 mil is nothing. There has to be a better explanation for this.
"Sincerity is an overrated virtue" - Milton Friedman
 

Ya 15 mill is nothing (maybe 150?), but even then why would a company like Apple decide to do this? I'm quite surprised...

"If you survive to my age and you rack up a CV like mine, you can look at HR and say, "Fuck you. I don't try out."- Eddie
 
Best Response

simple. Apple stores sells much more than the ipad. Because of the layout in their stores the majority of staff/floor space will be occupied attending people going just for the ipad. This would remove a significant part of the volume at their stores while having the same/better margins for their ipads sales.

 
Unforseen:
simple. Apple stores sells much more than the ipad. Because of the layout in their stores the majority of staff/floor space will be occupied attending people going just for the ipad. This would remove a significant part of the volume at their stores while having the same/better margins for their ipads sales.
this
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AndyLouis:
Unforseen:
simple. Apple stores sells much more than the ipad. Because of the layout in their stores the majority of staff/floor space will be occupied attending people going just for the ipad. This would remove a significant part of the volume at their stores while having the same/better margins for their ipads sales.
this

Interesting, hadn't thought about that.

 
Unforseen:
simple. Apple stores sells much more than the ipad. Because of the layout in their stores the majority of staff/floor space will be occupied attending people going just for the ipad. This would remove a significant part of the volume at their stores while having the same/better margins for their ipads sales.

why would the margins be the same/better at WMT (unless WMT is paying apple to be able to sell the tablets)? in their own stores, apple doesn't have to pay a cut of the selling price to a third party.

also, customer traffic in the apple store is managed when they release these things. they make people wait in line...it's not like everyone just floods the store and overwhelms the staff (not sure if that's what you're implying...?). all else equal, i would think apple would want more traffic at the apple store because then they buy other products while they are there (just like any other retailer...increased traffic is good for retail).

i think this wal-mart strategy just gives apple more of a distribution footprint at the moment of the product release (when people are most excited about the product) and, more importantly, it addresses a different customer demo. they're selling the cheaper version at wal-mart. apple products are typically fairly expensive and bought by city dwellers who are more well off. all of those people already own apple and/or will buy this ipad. by selling the lower end sku at wal-mart they can hit a lower-income demographic that probably doesn't normally buy as many iphones/ipads.

i think apple's probably just trying to extend their dominant tablet market share by selling to lower-income customers. if 100% of the market uses apple's tablet, they win.

 

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