Talk about a blast from the past. Best Buy (NYSE:BBY) is currently experimenting with the concept of selling a wide variety of Apple's (NASDAQ:AAPL) Macintosh computers in its stores for the first time since 1998. Whether this development will be "halo" or "hollow" for Apple remains to be seen.
True enough, Best Buy occasionally sells Macs in some of its stores already, with a wider selection on its website (and it already sells iPods and iPod accessories). The difference here is that it may consider peddling a wider selection of Macs (maybe even the full line) in more of its stores. The test currently only applies to seven Best Buy stores in Southern California and it has been going on for four weeks; Best Buy said at its annual shareholders' meeting that it's testing whether this would be a profitable move. The sheer fact that Best Buy is interested may imply that the retailer feels there is untapped demand for the machines.
People have long theorized that Apple could benefit from a "halo effect" from the runaway success of the iPod, and even though the computers have enjoyed greater popularity, many people have noted that the halo effect hasn't really lived up to the expectations. (Apple's last quarter showed a fairly sedate increase in Mac sales, although some prospective purchasers may have been waiting for new Mac models with Intel (NASDAQ:INTC) chips.)
The limited availability of Macs has probably always proved a barrier for many consumers, even beyond price. Mac fanatics tend to get their computers from Apple's website, an Apple Store, if there's one close by (there are only about 150 bricks-and-mortar Apple Stores), or an Apple reseller.
On that note, there may be some risk for Apple. Macs have long attracted loyalists as opposed to mainstream users, and Apple has been able to have more control over its customer service, an element many Mac fans hold in high regard. (Granted, Apple is training some Best Buy employees involved in the test.) Spreading itself too thin might dilute the emotional connection that Macs have with their customers (I'd argue that many other PCs are more like commodities), and that could have a slightly negative effect on the Apple brand.
Best Buy's experiment is no surprise; it has been doing rather well lately and has made much of its customer-centric initiatives based on local demographics. Indeed, it stands to reason that some of those focused stores might do well by offering Macs, which have never been widely available through other retailers that people might look to for computers, like Circuit City (NYSE:CC), Costco (NASDAQ:COST), or Wal-Mart (NYSE:WMT).
The experiment's possible effect on Apple is the most interesting question. If it can get its Mac line into all 700-plus Best Buy stores, Macs have a good chance to appeal to an even greater mainstream audience. And despite my own questions as to whether the Mac mystique might get a little bit diluted by broader distribution, if the test's a success and Best Buy expands the initiative to more stores, it would be good news -- especially since some folks are beginning to wonder if Apple's incredible run with iPods is starting to lose momentum.
Best Buy and Costco are Motley Fool Stock Advisor selections. Wal-Mart and Intel have been recommended by Motley Fool Inside Value .
Alyce Lomax does not own shares of any of the companies mentioned.
