Apple's rotting retail sales will taint the electronics food chain, Barron's Plugged In author Mark Veverka says.
While foot traffic at Apple's (AAPL) 250-odd retail stores more or less held up (-1.8% from last year), customers aren't walking away with all that much - as same-store revenue fell 17.4% in the December quarter vs. a year ago. "Shoppers were not in a spending mood," Needham hardware analyst Charlie Wolf says, noting Apple's pricer lineup of iMacs and iPhones may not be a panacea for the cash-strapped shopper.
More than just bad news for Apple, Veverka says the severe drop in December sales "are a harbinger of depressing news for the entire electronics food chain":
Manufacturers, component suppliers, chip makers and semi-cap equipment makers all have to ratchet back their operations to reflect the lack of consumer demand. Yet it is an even more sobering development for mall owners, who have come to count on Apple stores as their new rock-star anchors - outperforming nearly every other retailer in their centers.
Still, Wolf notes that the typical Apple store produced sales of $4,700/square foot - undoubtedly the highest among retail chains in the country. The impact of its stores will remain powerful once some semblance of normalcy returns to the economy, and will continue to produce robust revenue for Apple - as long as it continues to deliver iconic wares.