Apple stores reportedly prepping for major iPhone upgrade push in bid to increase sales

On the same day new data appeared to show that sales at Apple’s retail stores are currently in decline, a 9to5Mac report claims the Cupertino company will this week launch a new drive at its brick-and-mortar sites to get customers to upgrade their old iPhones to one of the latest models.

According to the unnamed source, the tech giant will on Thursday begin contacting owners of older iPhone handsets by email, inviting them to visit their local Apple store to upgrade to the latest 5S or 5C models. It’s not clear if Apple will offer any incentives to upgrade, though without anything extra to tempt customers, it’s easy to imagine most will wait for the launch of the iPhone 6 – which could happen any time in the next six months – before switching handsets. 

Managers at Apple stores across the US will reportedly be briefed on the sales push on Tuesday, with other marketing initiatives expected to follow soon. The company’s new retail chief, Angela Ahrendts, began her first full week in the job on Monday and therefore will be overseeing this latest bid to boost sales.

This week’s push by Apple to get more people into its stores is thought to be linked to a strategy drawn up at a special meeting between the company’s top executives last summer. At the gathering, Apple CEO Tim Cook reportedly expressed his disappointment at the sales performance of the iPhone through the company’s stores, pointing out that only 20 percent of iPhone purchases are made via that channel.

Previous initiatives designed to boost handset sales at its retail sites have included back-to-school promotions offering iPhone buyers gift cards for the app store and a trade-in program for its phone, with the latter at the center of the latest drive to boost sales at its stores.

Sales decline

Data compiled by Needham analyst Charlie Wolf and released to investors Monday claims to show a March decline of 5 percent in year-on-year sales at Apple’s retail stores, with Wolf attributing the drop in part to the lack of new product releases. Tim Cook said in February the company has new products on the way, though of course there’s no clear indication as to when they’re likely to arrive.

In his note to investors, Wolf said the Apple stores’ sales performance is also “hostage to the company’s distribution strategies.”

He explained, “Mac sales in the stores were adversely impacted in 2009 when Apple broadened Mac distribution in the US, adding other chains, such as Best Buy, as resellers.”

He added that iPod sales in Apple’s stores nosedived when iPod demand caught up with supply and Apple responded by vastly increasing the number of outlets selling the product. “Same-store sales have also been affected by the roll-out of the iPhone to carrier stores around the globe,” the analyst said.

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