While those of us in big cities have the convenience of official Apple stores and their reputation for great customer service, thousands of small cities across America have zero options for Apple-authorized support and expertise. These small urban centers could be a lucrative market, which is why GameStop (NYSE:GME) has recently completed its acquisition of Simply Mac. This retailer is an Apple-authorized retail chain located primarily in the Mountain West region and is focused on bringing the Apple Store experience to smaller cities across the United States.
A little Simply Mac history
GameStop's newest addition was founded in 2006 and has 20 locations as of this writing, with two more set to open in Montana and Idaho. The company's vision is "to be the premier provider of Apple technology solutions in North America, providing world-class service."
Looking at the company's reviews across locations, it appears Simply Mac is living up to its promise of world-class service for the majority of its locations, which rate similar to official Apple Store reviews.
What does this mean for GameStop?
This acquisition is supposed to add synergies to both companies in a variety of ways. On the most recent earnings call, GameStop executives noted that locating Simply Mac stores close to current GameStop locations, leveraging real-estate expertise at GameStop, and utilizing PowerUp Rewards would help drive positive results for both companies. Investors should also expect to see GameStop's recent acquisition of Spring Wireless push growth into the mobile phones and wireless category, especially when combined with Simply Mac.
All in all, it looks like the addition of Spring Wireless and Simply Mac could drive revenues in a very big way for the company over the long term. One firm, Sterne, Agee & Leach, commented that it thinks the concept can generate anywhere from $1.0 billion to $2.5 billion in revenue for GameStop five years from now, or $0.60 to $1.55 in earnings per share. These figures would be a healthy boost for GameStop's top and bottom lines, and coupled with what appears to be successful new console sales, could fuel optimism in the stock going forward.
At first glance, the Simply Mac brand looks to be a wonderful addition to GameStop with its niche market and lucrative status as an Apple-authorized retailer. In the video below, Motley Fool analyst Blake Bos digs into this new business and tells investors just what Simply Mac means to GameStop.