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Apple’s Global Distribution Channels

Apple is one of the leading technology companies in the world, making everything from phones to computers to earphones. They have really created a full ecosystem to connect all their products and services. Apple has 510 stores worldwide but also sells its products through third-party sellers and carrier providers. Apple is able to generate huge amounts of sales through direct and indirect distribution channels worldwide.

Apple designs its products in California, but the rest of the product is process throughout the world. There are many complicated parts to Apple’s products, and it would be difficult for one manufacturer to make them all so Apple has to work with multiple manufacturers throughout the world. Components are made all over the world by specialist of each part and sent to two main assemblers in China to manufacture the final product, Foxconn and Pegatron. This drastically reduces cost of goods for Apple due to the cheaper labor in China. Products are then sent all over the world to its consumers through different distribution channels.

Illustration of iPhone with world map on the screen showing where iPhone components come from

Apple’s direct distribution channel includes their physical stores and their online store. Apple physical stores allows them to really control their brand image and customer perception of them. All their stores worldwide have the same clean white design with a high employee to customer ratio. This creates a really strong brand image in consumers’ minds as they are seeing the same design everywhere they go. They also often open their stores in high traffic locations to get as much exposure as possible. Apple also sells directly through their website. Their website can be access from all parts of the world and offer a huge range of languages.

However, even though Apple puts a lot of effort into their physical stores, a large part of their sales and revenue comes from indirect distribution channels. In 2018, Apple reported that 29% of their net sales came from direct channels and 71% came from indirect channels. Consumers can buy Apple products from third-party sellers and carrier providers. This includes stores like BestBuy, Walmart, and Target as they are easily accessible and might offer discounts. Apple creates a good brand image through their physical stores and sells their product through third-party companies.

Links:

https://www.lifewire.com/where-is-the-iphone-made-1999503#:~:text=Foxconn%20is%20Apple's%20longest%2Drunning,%2C%20Singapore%2C%20and%20the%20Philippines.