Apple Looks to Open First Store in Samsung's Backyard
September 22 2016 - 7:20AM
Dow Jones News
SEOUL—Apple Inc. has made inquiries about opening its first
retail store in South Korea, in a signal that the technology giant
may be looking to step up competition in smartphone rival Samsung
Group's backyard.
Apple looked at sites across the street from the Samsung's
longtime headquarters in Seoul, according to people familiar with
the matter.
The Cupertino, Calif. company, which is Samsung Electronics
Co.'s biggest rival in the mobile-phone market as well as a major
customer of its smartphone components, is looking at locations near
the South Korean company's own three-story global flagship store in
Seoul's upscale Gangnam neighborhood, the people said. The company
has sent retail executives to South Korea in recent months to check
out potential sites for the store, they said.
The people warned that Apple's plan hasn't been finalized and a
store opening could take about a year.
"We have made no announcements about a store there," an Apple
spokesman said.
A spokeswoman for Samsung Electronics declined to comment.
South Korea, Asia's fourth-largest economy, has long been a
tough market for Apple. Smartphone sales are dominated by hometown
favorites Samsung and LG Electronics Inc., who together account for
about 80% of the smartphone market in the country. Apple doesn't
break out sales for South Korea separately.
After the launch of the larger-screen iPhone 6 and iPhone 6 Plus
in late 2014, Apple jumped to about a quarter of the market, before
its share fell below 10% in the second quarter of 2016, according
to data tracker Strategy Analytics.
Opening a glitzy flagship store would send a message that Apple
intends to compete hard on Samsung's home turf.
From a glass cube on New York City's Fifth Avenue to a Norman
Foster-designed store in Istanbul, Apple has used its prominently
placed retail stores to attract buzz for the brand and to sell
premium handsets. In Seoul, Apple has scouted potential locations
around the Gangnam subway station, Seoul's busiest and home of the
headquarters of Samsung Group, as well as another site on Seoul's
fashionable Garosu-gil shopping street, according to the
people.
In South Korea, Apple relies on third-party retailers who apply
for licenses to operate as authorized Apple resellers, as well as
carrier partners.
In mainland China, a critical market for Apple, the company has
opened 36 Apple stores, including in Shanghai and in second-tier
cities like Nanning, Fuzhou and Jinan. It has six Apple stores in
Hong Kong and seven in Japan.
Apple's hunt for retail real estate in Seoul comes as Samsung
grapples with a massive recall of its latest smartphones amid
reports of batteries in the Galaxy Note 7 catching fire. Analysts
estimate the recall could cost Samsung more than $1 billion.
Before the Note 7 recall, Samsung reported its most profitable
quarter in two years in July as Apple suffered a 27% drop in
quarterly net profit compared with a year earlier.
Samsung's share of the global smartphone market rose to 22.3% in
the most recent quarter from 21.8% a year earlier, according to
research firm Gartner. Over the same period, Apple's share fell to
12.9% from 14.6%.
Write to Jonathan Cheng at jonathan.cheng@wsj.com
(END) Dow Jones Newswires
September 22, 2016 07:05 ET (11:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Aug 2024 to Sep 2024
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Sep 2023 to Sep 2024