20-20 Hindsight

...Jobs thinks he can do a better job than experienced retailers a t moving the beluga. Problem is, the numbers don't add up. Given the decision t o set up shop in high-rent districts in Manhattan, Boston, Chicago, and Jobs's hometown of Palo Alto, Calif., the leases for Apple's stores could cost $1.2 mi llion a year each, says David A. Goldstein, president of researcher Channel Mar keting Corp. Since PC retailing gross margins are normally 10% or less, Apple w ould have to sell $12 million a year per store to pay for the space. Gateway do es about $8 million annually at each of its Country Stores. Then there's the co st of construction, hiring experienced staff. "I give them two years before the y're turning out the lights on a very painful and expensive mistake," says Gold stein."

What's more, Apple's retail thrust could be one step forward, two s teps back in terms of getting Macs in front of customers. Since most Mac fans a lready know where to buy, much of the sales from Apple's stores could come out of the hides of existing Mac dealers. That would bring its already damaged rela tions with partners to new lows.

Indeed, rather than taking on the retailers who ought to be its pa rtners, Apple would do better improving how it works with them. A good step wou ld be to end the "think secret" approach that shrouds every new-product announc ement. Covert operations worked beautifully when Jobs first arrived on the scen e; his charismatic stage presence and Apple's eye-popping designs created price less buzz. Now, retailers complain that the secrecy prevents them from doing ad vance advertising to hype sales and clear out inventory. "They are the most sec retive company I've ever done business with," says one top retailer. "They shou ld let the news leak out, to convince the world how exciting their stuff is. Th at's how everyone else does it." Maybe it's time Steve Jobs stopped thinking qu ite so differently."