November 5, 2003 3:22 PM PST

Apple eyes more sales to government, business

Apple Computer said Wednesday that it is experimenting with new efforts to boost sales of Macintoshes to business and government customers.

Apple sales chief Tim Cook told financial analysts that the company last month launched a direct effort that's aimed at the creative market and government entities, with 70 Apple employees working in either field sales or telephone sales.

Cook said the company has also established employee purchase programs at about 100 companies in recent weeks, an effort Cook said will build advocates for bringing the Mac into the workplace.

"This is a way for Apple to kind of get in the back door," Cook said at a meeting for financial analysts the company held in Cupertino, Calif., and broadcast over the Internet.

Cook said more than 1,250 value-added resellers now sell Mac gear, with most of those recruited in the past 12 to 18 months.

The company also launched a program last month in which resellers can sell Apple gear without actually taking title to the products, a move Cook said will both help existing Mac sellers as well as recruit new resellers.

With those changes, as well as Apple's own retail stores and the increased business on its online store, Cook said Apple's sales effort is dramatically different than it was three years ago.

For smaller business, Apple is hoping to draw on its network of more than 70 retail stores.

Although the company started its stores with its eye on consumers, it said it has increasingly focused on small business. Such sales now make up 10 percent of retail store sales, up from 2 percent in 2001.

Retail chief Ron Johnson said the company is aiming to have that total reach 20 percent. "We think we can get there soon," Johnson said.

To boost small business sales, the company plans to make every Wednesday "business day" and is also trying to cut service turnaround time for business customers and offer them the ability to make service appointments with the "genius" of their choice.

Also, more of Apple's sales are coming from things other than Macs these days. In fiscal 2000, sales of things other than computers such as its iPod, monitors and software--so-called "beyond the box" sales--made up 13 percent of Apple's revenue. In fiscal 2003, which ended in September, such sales made up 28 percent of Apple sales and accounted for 37 percent of Apple's gross margin dollars.

But Cook said, unlike some competitors, "we haven't forgotten the box."

 

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