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Apple to open first retail store in Virginia

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CIOL Bureau
New Update

Peter Henderson

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SAN FRANCISCO: Apple Computer Inc. will open its first retail store in

Virginia on May 19, the company said Monday, confirming long-standing rumors

about the personal computer maker's plans. Apple wants consumers to "Shop

different", it said in a play on its "Think different" marketing

campaign.

That tag line was at the close of an invitation to media ahead of the opening

that read, "On Saturday, May 19, Apple will open its first retail

store." Months of rumors that the maker of Macintosh computers would branch

out into retail stores have thrilled consumers and concerned the storeowners who

have been selling Apple computers, who are worried of their profits.

Analysts have been more concerned that the company, which returned to profit

last quarter, might sink resources in a white elephant project. Apple has a hit

with its online store, which brings in a hefty portion of company sales, but the

personal computer industry has long been asking whether bricks as well as clicks

are necessary to move hardware.

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"That's big news," said Thomas Armes, president and chief executive

of Elite Computers & Software, an independent Apple dealer that is located

across the street from Apple's headquarters. Apple had not broken the news to

resellers, he said.

"I have mixed feelings about it. I think it is definitely a good thing

from the Apple branding standpoint," he said. "Given that we have a

retail store, we might potentially compete with an Apple retail store."

Apple will open a store in Silicon Valley capital - Palo Alto, California, which

is next door to Apple's home base in Cupertino, Palo Alto town planners had said

in November, expecting the store to open in April 2001.

But Apple had not commented, and a spokeswoman said it would not say anything

now in addition to the invitation. Apple already has a showroom at its

Cupertino, California, headquarters, but it sells its wares primarily through

resellers and the Internet.

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Apple trapped itself in an inventory backlog nightmare when sales slowed late

last year. That was one good reason for the company to avoid a major move into

retail, Lehman Brothers’ analyst Dan Niles said. Stores in Littleton,

Colorado, Buffalo and New York City, New York and Bloomington, Indiana were also

in the works, he said.

But competitor Gateway Inc. had shown the pitfalls of retail by opening a

chain which it has recently cut back, he said. "I don't mind it more as a

branding event," rather than the start of a major chain of company-owned

stores, he said. "I don't want Apple getting into the retail store

business."

(C) Reuters Limited 2001.

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