Apple Inc (AAPL)

[langostino]

Spastic - pieces of the puzzle

You're certainly right that there's no objective way to determine what portion of marginal additional sales resulted from the investment in stores, and what portion from the investment in the Switch Campaign.

My point was, that even if you gave 100% credit to the Switch campaign for every marginal additional sale that it possibly could have generated, it would have been a bomb, from a return on investment standpoint. So even in the most generous, most favorable light, it was a loser.

I happen to agree with you, in your belief that the investment in the stores was responsible for many times the number of marginal additional sales that were created by the Switch Campaign. While it's fairly easy to quantify that the Switch Campaign was a bomb, the stores are another story. They are producing well, for now. In a couple years time, we'll have a more accurate picture of what their real carrying cost is. They are clearly helping the company in a number of ways. But they are reducing the operating leverage by increasing the proportion and absolute total of fixed costs. When (hopefully) Apple begins to grow the top-line, the existence of the growing investment in the stores will serve to mute the leverage with which those top-line numbers flow to the bottom line.