Apple’s 400 or so retail stores have become a profitable mecca of sorts for Apple’s few hundred million customers. In fact, the Apple Store is a key point of differentiation from other manufacturers. Instead of disrupting the market with a better product, Microsoft has adopted the Burger King strategy of building restaurants near McDonald’s and a few dozen stores have popped up around the country.
This strategy is brain dead. Then there’s word that Google wants to open retail stores, too. That idea is also brain dead. Apple’s retail stores are profitable because Apple makes a lot of money on each device, and sells far more than anyone else except Samsung. How can Google and Microsoft hope to make money in retail when their products don’t have the same margins as Apple?
The market is ripe for some disruption and Amazon might be the perfect company to do it. How so?
Amazon should buy Radio Shack.
Think about it. Amazon can afford it. Radio Shack’s market cap is barely $300-million; chump change for Amazon. Radio Shack operates over 4,000 retail stores, an order of magnitude greater than Apple’s palace-like stores.
Radio Shack stores would serve two very important purposes for Amazon. A retail presence for the Kindle Fire and future products to compete with Apple, Microsoft, Google, and Samsung. Customers would be able to touch and feel Amazon’s products.
And, Radio Shack would be an excellent way for Amazon to ship products to a location where you can pick up what you ordered on your own schedule rather than sitting at home waiting for UPS or FedEx to show up.
4,000 stores to Apple’s 400 stores is a compelling reason for Amazon to buy Radio Shack. The price, even at a premium, is right. The timing is right. And 4,000 Amazon stores nationwide would be disrupting to all major players in the smart phone, gadget, and tablet industry.