Steve Jobs CNBC Interview, 5th Ave. Apple Store

2006-05-188:00English

Transcript

Machine transcript in the original language. It may contain errors. Select a timestamp to play that moment.

Welcome back to Street Signs.
Apple making a big bet on the Big Apple.
The computer giant now is a prime piece of real estate
on Manhattan's luxury-lined Fifth Avenue.
Apple's new showcase store opens tonight in the city that never sleeps.
And fittingly, it will be open 24-7, 365 days a year.
What is behind this retail strategy?
Joining us live from Apple's newest store is CEO Steve Jobs.
Mr. Jobs, it's a great pleasure to have you with us.
Thank you.
Glad to be here.
Well, I want to start off first with exactly where you are.
Midtown Manhattan, the home of Bergdorf.
You're right across the street.
Prada, Cartier, a lot of stuffy luxury stores.
Perhaps the biggest headline here is that Midtown Manhattan is finally cool enough for an Apple store.
Well, you know, we went into retail about five years ago.
opened our first store actually five years ago today.
And they've succeeded beyond our wildest dreams.
And one of the stores was here in Manhattan in Soho.
And it was our most expensive store to build.
And we were a little concerned that, you know, how much business would it do?
And it's just, again, done phenomenal business.
We've got so many Mac users here in New York.
And that store has gotten so crowded
that we realized we had to open a second store in New York City.
And we found this incredible location
where the largest real estate developer in New York,
Harry Mackleau, had just bought the GM building.
And he saw our Soho store and he said,
you've got to be in my new building.
And we said, well, where do you have in mind?
And he said, well, underneath the plaza, there's some stores.
And we said, subterranean?
Are you crazy?
But we called him back a day later,
and we said, we got this crazy idea.
What if we could redo the plaza
and make it this beautiful plaza,
we'll put our store underneath it,
and we want an entrance right in the middle of the plaza.
And he said, what kind of entrance?
We said, how about a 32-foot glass cube?
And he loved the idea, and we got it through the city,
and we built it, and it's opening tonight,
and we're pretty excited about it.
Now, you said that the Soho store
was extremely expensive.
I got to imagine, given all of the enthusiasm
with which you described everything down to the Cube,
that this one was even pricier.
Well, you know, what's interesting
is we've never believed in the philosophy
of having flagship stores that don't make money.
Every single one of our stores makes money.
And so although we do spend a little more
on these stores in New York, you know,
construction is more expensive.
And we also, you know, they have to stand up
to a lot of use.
They still do very well for us.
And now here's the big question.
And our producer, Ellen Igas, she
was very interested in this one.
The 24-hour concept.
What is this going to be?
The biggest pickup location in all of greater New York?
You know, one of the things we decided very early on
was we wanted to provide great service to our customers.
And so half the employee, we have 300 employees
that will work in the store.
Half of them are dedicated to things like our Genius Bar,
which you can come in and for free get your questions
answered, get your computers repaired.
Whatever you need, we try to take care of for you.
And so we're highly service oriented.
And it's gotten to the point with our Soho store
where we open at 6 o'clock in the morning
to serve people at the Genius Bar,
and we don't close till midnight.
And we thought, you know, it isn't very much further
go where we could just try a store that's open 24 365.
And so if you're working on your film editing,
and at 2 o'clock in the morning you've got a problem,
we're going to be there for you.
All right.
So a genius can meet a Bergdorf blonde.
But here's the big question.
Is this another way of your saying to your customers
that you're continuing to expand in retail,
and they're not going to be able to buy a Mac ever
in a Circuit City or a Best Buy?
Oh, no.
You know, I think, again, we have partnerships with both Circuit City and Best Buy.
We sell primarily iPods through them.
But you can buy Macs and a lot of independent resellers.
It's just that we want to invest more to make an even better buying experience.
And I think the buying experience and the ownership experience of owning a Mac
is maybe the best of any product I know.
and it's because of the investment we're making in these stores
and because of the passion we have for really taking care of our customers.
But you're willing to expand then the distribution beyond the stores
because it's interesting, you've got the Intel chips now, you've got...
computers that can run OS 10 as well as running Windows.
Is your goal eventually to have Apple be even bigger?
To sell to corporations so that there's not a Dell here on my desk at CNBC,
but a Macintosh? Well, you know, one of the advantages we have is
is we have a market share of around 5 percent, depending on which
market research firm you listen to. And, you know, you could say, well, that's
that's that could be bigger. And of course, we'd like it to be bigger.
One of the advantages is, you know, we've only got to convince 5% of the rest of the world to buy a Mac, and we've doubled our market share.
So clearly these stores, we're hoping, will help us grow our company.
And indeed, almost half the computers we sell in our stores are to people that have never owned a Mac before.
But you think you're going to get a 10% market share in the U.S.?
You know, we don't predict, but we'll be glad to tell you how we're doing.
All right. Well, let me ask you this then.
In terms of your growth internationally, you talked about that.
Is that going to be a big focus for you?
Because a lot of analysts I spoke with, they said,
hey, the one thing we want to hear from Mr. Jobs is,

Transcript

Machine transcript in the original language. It may contain errors. Select a timestamp to play that moment.

Welcome back to Street Signs.

Apple making a big bet on the Big Apple.

The computer giant now is a prime piece of real estate

on Manhattan's luxury-lined Fifth Avenue.

Apple's new showcase store opens tonight in the city that never sleeps.

And fittingly, it will be open 24-7, 365 days a year.

What is behind this retail strategy?

Joining us live from Apple's newest store is CEO Steve Jobs.

Mr. Jobs, it's a great pleasure to have you with us.

Thank you.

Glad to be here.

Well, I want to start off first with exactly where you are.

Midtown Manhattan, the home of Bergdorf.

You're right across the street.

Prada, Cartier, a lot of stuffy luxury stores.

Perhaps the biggest headline here is that Midtown Manhattan is finally cool enough for an Apple store.

Well, you know, we went into retail about five years ago.

opened our first store actually five years ago today.

And they've succeeded beyond our wildest dreams.

And one of the stores was here in Manhattan in Soho.

And it was our most expensive store to build.

And we were a little concerned that, you know, how much business would it do?

And it's just, again, done phenomenal business.

We've got so many Mac users here in New York.

And that store has gotten so crowded

that we realized we had to open a second store in New York City.

And we found this incredible location

where the largest real estate developer in New York,

Harry Mackleau, had just bought the GM building.

And he saw our Soho store and he said,

you've got to be in my new building.

And we said, well, where do you have in mind?

And he said, well, underneath the plaza, there's some stores.

And we said, subterranean?

Are you crazy?

But we called him back a day later,

and we said, we got this crazy idea.

What if we could redo the plaza

and make it this beautiful plaza,

we'll put our store underneath it,

and we want an entrance right in the middle of the plaza.

And he said, what kind of entrance?

We said, how about a 32-foot glass cube?

And he loved the idea, and we got it through the city,

and we built it, and it's opening tonight,

and we're pretty excited about it.

Now, you said that the Soho store

was extremely expensive.

I got to imagine, given all of the enthusiasm

with which you described everything down to the Cube,

that this one was even pricier.

Well, you know, what's interesting

is we've never believed in the philosophy

of having flagship stores that don't make money.

Every single one of our stores makes money.

And so although we do spend a little more

on these stores in New York, you know,

construction is more expensive.

And we also, you know, they have to stand up

to a lot of use.

They still do very well for us.

And now here's the big question.

And our producer, Ellen Igas, she

was very interested in this one.

The 24-hour concept.

What is this going to be?

The biggest pickup location in all of greater New York?

You know, one of the things we decided very early on

was we wanted to provide great service to our customers.

And so half the employee, we have 300 employees

that will work in the store.

Half of them are dedicated to things like our Genius Bar,

which you can come in and for free get your questions

answered, get your computers repaired.

Whatever you need, we try to take care of for you.

And so we're highly service oriented.

And it's gotten to the point with our Soho store

where we open at 6 o'clock in the morning

to serve people at the Genius Bar,

and we don't close till midnight.

And we thought, you know, it isn't very much further

go where we could just try a store that's open 24 365.

And so if you're working on your film editing,

and at 2 o'clock in the morning you've got a problem,

we're going to be there for you.

All right.

So a genius can meet a Bergdorf blonde.

But here's the big question.

Is this another way of your saying to your customers

that you're continuing to expand in retail,

and they're not going to be able to buy a Mac ever

in a Circuit City or a Best Buy?

Oh, no.

You know, I think, again, we have partnerships with both Circuit City and Best Buy.

We sell primarily iPods through them.

But you can buy Macs and a lot of independent resellers.

It's just that we want to invest more to make an even better buying experience.

And I think the buying experience and the ownership experience of owning a Mac

is maybe the best of any product I know.

and it's because of the investment we're making in these stores

and because of the passion we have for really taking care of our customers.

But you're willing to expand then the distribution beyond the stores

because it's interesting, you've got the Intel chips now, you've got...

computers that can run OS 10 as well as running Windows.

Is your goal eventually to have Apple be even bigger?

To sell to corporations so that there's not a Dell here on my desk at CNBC,

but a Macintosh? Well, you know, one of the advantages we have is

is we have a market share of around 5 percent, depending on which

market research firm you listen to. And, you know, you could say, well, that's

that's that could be bigger. And of course, we'd like it to be bigger.

One of the advantages is, you know, we've only got to convince 5% of the rest of the world to buy a Mac, and we've doubled our market share.

So clearly these stores, we're hoping, will help us grow our company.

And indeed, almost half the computers we sell in our stores are to people that have never owned a Mac before.

But you think you're going to get a 10% market share in the U.S.?

You know, we don't predict, but we'll be glad to tell you how we're doing.

All right. Well, let me ask you this then.

In terms of your growth internationally, you talked about that.

Is that going to be a big focus for you?

Because a lot of analysts I spoke with, they said,

hey, the one thing we want to hear from Mr. Jobs is,