Apple Plans to Sell as Much as Best Buy

After having met with a team of Apple leading members, Prudential Equity Group said on Monday the company expects most iPhone sales to take place in their retail chain of stores. Prudential analyst Jesse Tortora, Apple CFO, Peter Oppenheimer, Apple Sr. VP of Retail, Ron Johnson, and Apple Sr. Director of Mac Product Marketing, Tom Bogart were present at the meeting that took place in Cupertino.

"Apple said that the iPhone will be sold exclusively through its own stores, its website, and Cingular stores," Tortora noted after the meeting. Apple management expects that customers will want a live demonstration of the device's features that will be done in retail stores. Apple told Tortora they are expecting per store sales levels similar to those of Best Buy, US leading electronics retailer. Apple stores have about ten times less floor space then Best Buy. Analyst Jesse Tortora estimates a $30 million sales figure per store, or $5 billion over the entire chain of stores over the fiscal year.

Apple said they will focus on their four major categories of products: macs, iPods, iPhones and Apple TVs, the company "doesn't expect to broadly proliferate into any new categories for a while".

The company also acknowledged their consumer segment is not growing as fast as the education segment. The Prudential analyst wrote the company "believes that Adobe's launch of Creative Suite 3 in Q2 will help its Consumer segment, spurring higher sales of both Mac Pro and MacBook Pro".

Tortora was also told the company is comfortable with current iPod channel inventory of 4 to 6 weeks, and that its existing NAND flash contracts are structured in such a manner that Apple will be able to participate in the full extent of ongoing price drops affecting the solid-state memory.