Report: Apple Overhauling iPhone Retail Strategy

Apple (AAPL) is hammering out a strategy to sell more iPhones through its retail stores rather than online or through carriers’ stores or other outlets, in a move to blunt competition from Google’s (GOOG) Android-based devices, according to a report in 9to5 Mac.

With some 80 percent of iPhones sold in locales other than Apple’s own retail stores, the vendor believes it has fallen short of leveraging the iPhone as a “gateway product” to lead customers to make additional in-store purchases such as the iPad or Mac computers, according to the report. Apple figures that bringing more iPhone sales in-house, so to speak, would expose customers to other Apple products when they may be most receptive to buying.

Apple’s top brass detailed the vendor’s new retail plans at an offsite meeting at San Francisco’s Fort Mason attending by retail store leaders worldwide, the report said. Apple chief Tim Cook is said to have addressed the contingent, as did Apple’s Internet Software and Services senior vice president Eddy Cue and Software Engineering senior vice president Craig Federighi.

The vendor has yet to replace John Browett, its former Retail senior vice president, who it canned some eight months ago after he spent less than a year on the job. With that in mind, Cook reportedly told retail managers that “Apple retail is the face of Apple,” ostensibly to quell some concerns over Apple’s leadership plans for the slot.

At the meeting, Cook is said to have expressed a desire to bring sales numbers for the iPhone at Apple’s retail stores more in line with service figures for the device at the outlets—about half of serviced iPhones are fixed or replaced at the vendor’s retail locations. To bump up iPhone sales in its retail stores, Apple will offer a lineup of incentives for customers buying the iPhones and the Apple stores selling them, possibly starting with a new Back-to-School promotion later this summer, the report said. Details of the incentives will be offered at a quarterly retail meeting at the end of this month, according to the report. 

Other boosts to the retail store strategy may include Apple’s new trade-in program to spur iPhone 5 sales and the long-rumored budget iPhone, should it appear at some point, the report said. Apple is said to have struck a deal with Miami-based mobile device distributor Brightstar (STAR) to operate the trade-in/buyback program for older units, which the vendor thinks could bring an onslaught of new buyers to the iPhone and possibly keep first time buyers away from Android-based phones.