Could Apple (AAPL) End Up With 1,000 Retail Stores?

Analysts are constantly speculating about what Apple (NASDAQ:AAPL) will do with its $25 billion in cash. The company has no track record of buying back shares or issuing a dividend. Apple rarely buys other firms and when it does, the transactions are small.

Apple has 300 retail stores worldwide and Global Equities Research thinks that number will go to 1,000. The question is “why”? There are a number of good answers.

Apple currently sells a large number of its Macs and iPods through retail partners. These companies collect a portion of the retail price for the items. Apple still controls the high end of the PC business for machines that cost over $1,000. If Jobs & Co. can keep 100% of those Mac sales, a long-term investment in real estate and workers may pay off fairly quickly.

Apple also has to deal with the growing possibility that AT&T (NYSE:T) will not be its exclusive cellular carrier partner in the US and that it will end up offering iPhone service on a number of carriers in some of the world’s largest countries including the UK, China, and the US. Apple will be going through the math of whether it make more money selling iPhones through its stores and offering cellular carrier options to customers than having cellular carriers sell the iPhone which traps them into a single service plan, often for two years.

Will Apple open a lot more stores? Probably. The math works in the company’s favor.

Douglas A. McIntyre