How did you actually view the hardware (and software) before purchase?

In the Greater Apple Universe, those days still exist in most places and for most people (or at least half of them).

Apple has announced the iPhone to be introduced into the European market in (Northern Hemisphere) Fall 2007 and in Asia in early 2008.

Will there be huge lines outside the Apple Stores?

Will we see the same media coverage of those lines of consumers waiting to purchase the iPhone?

That coverage was estimated to be worth over US$400 million of free coverage for Apple BEFORE the release weekend alone and it no doubt boosted interest in all of Apple products. In years to come there will be academic papers breaking down the success points of the marketing and media tactics by Apple that presented such a windfall.

There may also be interest in academic papers breaking down the weakness in some of the Apple's management decisions that concern their business activities outside the US borders and what lost opportunities are possibly foregone by lack of execution and poor management decisions.

Let's examine the current situation.

Out of the 190 retail stores Apple runs, there are 10 in the United Kingdom (UK) and 1 in Italy.  At least the 60 million British citizens have ten stores to share.

(The other international stores include 7 in Japan and 4 in Canada.)

There is one retail Apple Store store on the continent of Europe for its 290 million people to line up for the iPhone. The Italians will have to be very accommodating for that queue.

That is a continuing glaring shortcoming by Apple's leadership.

Having lived just over half of my life away from nearby Silicon Valley and what some there might call overseas, I wonder why Apple has not recognized they need to break the traditional mould and achieve penetration into greater markets and greater profits by recognizing people interested in their products may live in other places from where they live. Apply the same retail metrics, especially the patience to locate the right location for a store and execute in a timely and planned fashion as you have in the US market. It does require greater understanding and flexibility but it can be done with determination.

By not finding the appropriate management and marketing expertise along with the European or Asian leadership to carry out the same successful retail presence in some of these markets, Apple leaves revenue and potential profit on the table.

It also loses an opportunity to get consumers to take a serious look at a switch to the Mac via the iPod and iPhone and the Apple Store support (sales, touch and feel the product, help infrastructure).

It also possibly loses some of that US$400 million free media coverage in the case of the European iPhone launch.

[Note the growing number of web site and newspaper pages that report on the rumors of which European telecom carrier Apple is in talks with over the iPhone for the European market.]

Apple already has much of its revenue from non-USA operating segments so it is a great tribute to its products they sell so well without the retail presence internationally. It is also likely a tribute to its distributors in some of those countries but it is also handing them some fantastic growth numbers in revenue and profit.

But one has to ask what would the sales numbers and market percentage held if they did have that direct retail presence as in the US market instead of their distributors?

With many cities in Europe boasting populations of over one million, it is hard not to conclude that Apple has not tried hard enough in establishing their retail outlets or it is simply bad management and leadership.

Securing the right location at the right rent to support the same type of Apple Store presence they have in the US given the same metrics of the location takes time. But it is taking too much time with profit and revenue is being left on the table and market share likely lagging as a result.

The San Francisco and New York stores were not the first one established. Those accolades are held by the Glendale, California and McLean, Virginia stores.

European flagship stores are not needed everywhere but greater retail presence is overdue. A European retail presence is required yesterday in their equivalent to Glendale and McLean.

More effort please Apple.

Let me share some additional information and scattered thoughts in no particular order.

Lost Gatos

Los Gatos is a beautiful little town at the every southern edge of the Silicon Valley. It has 28,500 people and its citizens are well to do. 28,500 and it is going to have an Apple Store soon. With those numbers I hope it can be profitable though I am not sure what other indirect contributions it can make at this point given its location. It is only a few miles to the nearby existing Oakridge store. There are plenty of Apple Stores in the 50 miles northwards to San Francisco. I count seven stores existing there already.

Distributors and re-sellers

Do note that distributors and re-sellers step in and fill the void by the lack of retail presence by Apple. Gravis in Germany, Renaissance in New Zealand, Designer Group in Hong Kong and parts of China. Sometimes Apple's assistance in these type of arrangements can be quite significant and advertising and promotional payments can cover quite all kinds of excuses. Perhaps it doesn't cover lazy management that doesn't strike out on its own and execute a retail presence. The distributors are more more interested in promoting themselves and all the other products they carry as well as the Apple products. And they keep some of the sales and profit.

Australia and Canada -- big physical land mass and few people

There are five major cities in Australia that have one million or more people and the great majority of the 21 million Australian citizens live within these cities or nearby. There is not a single retail Apple Store in operation though it appears Sydney is taking applications for a store presence. Some of those lucky 30 million Canadians get at least 4 stores.

Japan performance

Japan has seven retail stores. Given the lackluster performance of Japan in Apple's financial reporting one simply has to ask what is the problem? This has been going on for more than two years now. Something has failed seriously there.

Online Apple stores

There are 24 individual country online Apple Stores. Since Belgium and Switzerland have two common languages there are 26 individual web sites. Of the 24 count, there are two stores for North America, fifteen for Europe, and seven for Asia Pacific. The business flowing directly has recently been cited as one reason for downward profits in Apple's New Zealand distributor yet they adopt and move in creative ways to expand their long-term future in the Apple and Mac related market of New Zealand.

Pricing

For years Apple's pricing in non-US markets have been criticized and frequent larger exchange rate movements have exposed at times huge differences from the stated US$ suggested retail price. They became absurd at times. Canadians drove over the border to purchase, Australians bought laptops in Singapore and Hong Kong if they were traveling through those places, Taiwanese flew to Hong Kong for the day to buy a laptop to bring back. Indians, Malays, Thais and Indonesians did the same.

They were perfectly rational decisions given that the lack of attention to exchange rate movements and subsequent re-adjustment in the suggested retail price in the local currency. Buy it cheaper. There has been some recent comments I have read online that more attention to this is resulting in greater frequency than in the past so their products are achieving a perception that suggested retail price is being met and there is not an additional penalty for buying the product locally. In Australia, gasoline prices are adjusted throughout the day and sometimes within a twenty percent range in a single day alone. One reason given by the suppliers is the exchange rate movements. I am not suggesting Apple adjusts prices that frequently but one must keep a weekly perspective to exchange rate movements and aim for that suggested retail price to keep pace.

Esprit

The management and execution of the clothes designer and retailer Esprit in Europe is worthy of study by Apple management into Europe retailing and wholesaling. It is a radically different product they are pitching from Apple's but their success has to be recognized. Some common characteristics are shared with Apple's image and tactics exist. While Esprit pulled out of the US a few years ago as they wanted more control of their operations and they are being very cautious about re-entering there.

Yet at the same time they succeeded wildly in Europe through store location, frequent design introductions into the retail inventory to attract customer visits, pricing, friendly service and "bright" image with "open style" flagship stores supplemented with smaller outlets. Their performance record also illustrates that hiring the right managers for the market location and conditions is very important if not vital. The previous Chinese Hong Kong majority shareholder hired the right Europeans to execute the retail operations in Germany, Denmark, Belgium, The Netherlands a decade ago. With a passion to detail, they have built their own team to execute continual successful expansion. The expansion into France, Spain, Italy and Portugal has been occurring in the last few years and they have just announced they are going to re-jig the Asian operations to perform better.

They recently have announced placed poor store location to have hurt their Asian operations and they are going to review that situation. Those analyzing the share price comparison should take note that the majority shareholder of Esprit continually sold down his shareholding over the last four years (worth over two billion dollars) yet the share price continued to rise with the company's performance and expansion in Europe.