Apple stores have seventeen times better performance than the average retailer.
That's Horace Dediu's April 18 summary of RetailSales' analysis of "retailers in the US." According to it, annual sales of $300 per square foot of a retail space (excluding restaurants) are "considered respectable," while jewelers regularly pull in double that amount. Luxury retailer Tiffany has annual sales of almost $3,000 per square foot.
Apple Stores, in contrast, top the list with over $6,000 in annual sales per square foot. Moreover, Apple also tops the chart in year-over-year sales growth, compared to the next 20 retailers that placed in the sales per square foot chart.
Apple sitting on massive cash piles
Last year, Apple's cash hoard grew to eclipse the size of the United States' federal government's. And early this year, Apple surpassed international oil company Exxon to become the most valuable company in the world, in terms of its market capitalization (the share price times the number of shares outstanding).
Part of the reason Apple's been doing so well is because the company's products dramatically outsell their competitors. Every Android tablet put together, including the popular Barnes and Noble Nook Tablet and Amazon Kindle Fire, hasn't matched the (more expensive) iPad for raw sales volume, as John Gruber of Daring Fireball explained late last year. And it took every Android smartphone manufacturer put together to beat Apple's iPhone line in the fourth quarter of 2011, according to Gartner.
It's not just Apple's sales volume that's allowing it to break records, though. Apple's products -- and retail stores -- are make a lot more money per gadget sold and square foot of retail space opened, than anyone else in the market.
Greater than 50 percent operating margin
That's according to Dediu's infographic, based on his and iSuppli's research. About half of the $630 average price of the iPhone (most people don't pay the full price because they sign up for a two-year contract) goes to the costs of manufacturing, packaging, software development and running the App Store. Through it, Apple pays app developers an estimated $12 per iPhone sold, compared to about $15 per phone on Chinese laborers. The biggest expense is $50 per phone, on flash memory.
Those profits, according to another chart further down the page, are far greater than those made by any of Apple's phone competitors, both per phone and altogether. Samsung comes the closest to matching Apple for overall profit, but it sells tens of millions more phones. And every time an iPhone is sold, it makes more profit for Apple than the average Motorola or Samsung device makes in revenue.
Taken together
Between massive profit per square foot of retail space and device sold, and the virtuous feedback cycle caused by Apple's using its profits to monopolize essential hardware components (according to CNN Money's Philip Elmer-DeWitt), it continues to grow its business faster and bigger than any of its competitors. And as Instapaper developer Marco Arment explains, another reason Apple is doing so well is because of its head start; when the iPhone and iPad were released, it took its competitors about a year before they released directly competing devices, and those (like the Motorola Xoom and T-Mobile G1) didn't sell nearly as well.
Don't expect Apple to use its profits to move its factories to America, though. Part of the reason its costs are so low is because everyone else's manufacturing infrastructure is also in China, allowing Apple to get needed parts without having to ship them from overseas.
Jared Spurbeck is an open-source software enthusiast, who uses an Android phone and an Ubuntu laptop PC. He has been writing about technology and electronics since 2008.
