SAN FRANCISCO • Apple named its third retail chief in seven years, seeking to shake up store operations for a new era in which the company looks beyond pricey iPhones.
On Tuesday, Apple said company veteran Deirdre O'Brien would replace Ms Angela Ahrendts, who served in the role for about five years.
Ms O'Brien is the first insider tapped to run the Apple division since Mr Ron Johnson opened the first Apple store in 2001 and left a decade later. The departure of Ms Ahrendts, Apple's top female executive, was a surprise. But it also marked a turning point for the company and its approach to retail.
Sales of the iPhone - Apple's biggest product line - peaked last year, putting more pressure on chief executive Tim Cook to find new revenue streams while experimenting with promotional pricing tactics that Ms Ahrendts eschewed.
With smartphone demand stagnating, Apple is building new digital services and subscription businesses that do not need as large a network of retail stores as its consumer hardware operations.
For the first time, the retail chief will also have other priorities because Ms O'Brien will continue to lead human resources.
When Ms Ahrendts joined Apple in 2014, she brought a luxury focus from her time running designer apparel company Burberry Group.
She turned Apple stores into stylish showcases for products, including the Watch that was initially marketed as a luxury product, with some models costing more than US$10,000 (S$13,500).
The expensive Watches did not sell well and Apple refocused the device as a health-tracking accessory.
About a month before Ms Ahrendts' departure was announced, Mr Cook warned that the company would miss its holiday sales target for the first time since 2001.
In December, the company asked retail employees to promote the new iPhones using methods not seen before. Technicians were told to push upgrades to consumers with out-of-warranty devices. Senior sales staff had to make sure other retail workers suggested upgrades, and easels offering generous trade-in deals for the iPhone XR were erected in stores.
Apple's online home page was also replaced with reduced iPhone pricing that required a trade-in of older models.
Mr Cook called the announcements "bittersweet" on Twitter, thanking Ms Ahrendts and saying he could think of "no one better" than Ms O'Brien to run Apple's retail.
Ms O'Brien has worked at Apple since the 1980s and before taking over the company's human resources function, was a vice-president in charge of sales and operations. As vice-president of people, she oversees worker development, recruiting and employee support.
"We are encouraged that a core Apple insider took over the reins," said analyst Dan Ives at Wedbush Securities. "An outsider running retail going into one of the most pivotal, defining periods for Cook & Co in the company's history would have been a risky endeavour."
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