“I give them two years before they’re turning out the lights on a very painful and expensive mistake…”
That’s a quote from a pessimistic analyst in a Bloomberg Op-Ed dated May 20, 2001 — just one day after Apple opened its first retail locations.
The arguments against brick-and-mortar retail are sound, for the most part. It’s an expensive proposition to open a retail location that could quickly become nothing more than a showroom for Amazon.com. And almost everywhere you look, old-school retailers are getting crushed as consumers opt for the convenience of online purchases.
Yet Apple has proven that if you do it right — and if your product line is good enough — retail can thrive, even in the tech space. Twelve years after its first foray into upscale malls in high-rent districts, Apple’s retail juggernaut brought in the sales. Apple makes roughly $6,050 for every square foot of store space. That’s more than twice high-end jeweler Tiffany & Co.’s $3,017 per square foot, according to consulting firm Retail Sails (via Forbes).
But the billion-dollar question goes to Google:
Can the king of search make retail work?
Google topped $800 for the first time today. Over the past five months, it has separated itself from Apple, helping to lead the Nasdaq higher while Apple steadily slipped. Now rumors are swirling that Google is planning to open stand-alone retail locations — possibly as early as the holiday season.
Google stores could be a boon for the company. It’s already proven it can innovate (working prototypes of Project Glass and self-driving cars come to mind). But if Google can demonstrate the worth of its new innovations at retail locations to an endless supply of potential customers, a new period of growth could be in its future.
Don’t bet against them…
for The Daily Reckoning
Greg Guenthner, CMT, is the managing editor of The Rude Awakening. Greg is a member of the Market Technicians Association and holds the Chartered Market Technician designation.
"There has been an issue that has preoccupied my mind for a long time," writes Dr. Marc Faber. "In economics, it is generally accepted that if the quantity of money and credit is increased, prices will rise… However, since economics is so complex… I question whether the expansion of central banks' balance sheets and policies of zero interest rates could have a deflationary impact…" The good doctor wrestles with the question, in today's essay...
The Biotech iShares ETF is up 23% since the Oct. 15th bottom. No, that is not a typo. Biotechs have torched the S&P over the past two months--more than doubling the returns of the big index. And biotechs as a group are up more than 38% year-to-date. In fact, since we first highlighted the June comeback, the Biotech iShares have gone nowhere but up.
The oil market has been under siege for six months. From service providers to producers this downturn has been painful. Of course, we’ve known all along that oil prices were a little toppy over the summer. In fact, when asked just how low oil prices could go I usually answered with a simple “lower than you’d expect…”
Our forecast that Cuba would be open and integrated within 5-10 years is on track after yesterday's big announcement. Ahead of schedule, even. Click here to see how some investors have profited and what the island's likely future is...
The opportunity to sell and install LEDs is enormous. We’re talking about over a billion lighting fixtures. And the areas with the largest potential -- like parking lots -- have barely begun to change. Banker to the presidents Chris Mayer says you could triple your money in this new tech trend. Here's what you need to know.
It's a theme we've shared with you since April. And it's only gotten worse. The gaming industry has come under all sorts of pressure--a situation I first noticed in the charts. The powerful, multi-year uptrends started showing cracks. And it wasn't long before those cracks turned into gaping holes you could drive a friggin' truck through. That's where things stand today.