Apple Appoints New Retail Head As iPhone Sales Slump Drags On

With sales of its signature iPhone slumping and CEO Tim Cook shifting the emphasis to Apple's booming services business, the company announced on Tuesday that long-time retail head Angela Ahrendt will be leaving the company after a five-year stint at the consumer tech giant.

And on Wednesday morning, the company revealed that Ahrendt - who joined Apple from British fashion house Burberry - will be replaced by Deirdre O’Brien, currently the company's head of HR, who will now enjoy a new (if unorthodox) dual role as head of retail and people.

Angela

Angela Ahrendt

Analysts greeted the news of O'Brien's appointment with enthusiasm, though some noted that her combined role could be a source of confusion.

"We are encouraged that a core Apple insider took over the reigns at this juncture," said Dan Ives, an analyst 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 endeavor."

Still, others questioned O’Brien’s dual role. "Combining HR and retail into one position is more than a little bit odd," Michael Gartenberg, a former senior marketing executive at Apple, wrote on Twitter. "Apple clearly didn’t want the retail position to be left blank. It will be interesting to see how this plays out longer term."

O'Brien is a more than 30-year veteran at Apple. And her ascension to the retail chief job makes her the first company insider to take on the role since Ron Johnson, the original architect of the Apple store, left the company in 2011, according to Bloomberg.

The nature of O'Brien's new role is unique, and some might argue reflective of the company's impending shift away from retail to focus more on its services business. Though, as the Financial Times noted, before stepping into the HR chief role, O'Brien was involved with some of the company's early product launches.

O'Brien

Deirdre O’Brien

Before coming to Apple, Ahrendt was credited with reviving the fortunes of Burberry. And while at Apple, she helped pioneer the modern Apple store layout, where staff roam around with iPads - a layout that cuts down on lines, but has been criticized by some for being "too chaotic."

Also, Ahrendt's departure comes as the company has backed away from her vision for the Apple Watch, which she sought to market as a luxury product - with some early models retailing for as much as $10,000. In recent interviews, Cook has teased that the next iteration of the watch will have more of a health and wellness focus. 

During her nearly eight years at Burberry, Ms Ahrendts was hailed for reviving the British fashion brand with a combination of savvy digital marketing and an enticing in-store experience that appealed to a younger generation of consumers, alongside an expansion into China just as the luxury market there took off. At Apple, she has described its retail stores as “town squares” — venues not just for selling products but for customer support, talks and concerts, and educational programmes. She often sought out landmark sites for new stores, such as London’s Covent Garden, New York’s Grand Central Station and, opening soon, the former Carnegie Library in Washington, DC.

Cook has reportedly also started to rethink the "no-discounts" approach favored by Ahrendts. In order to reduce the company's reliance on mobile providers, Cook has been toying with an approach whereby Apple will offer customers discounts on the newest phones if they trade in their old phones.

Apple has blamed the slump in iPhone sales on the slowdown in China (which it cited as the primary reason for its first quarterly revenue guidance cut in 16 years last month) and the fact that consumers have been waiting longer to upgrade their phones.

But we can think of at least one way O'Brien could stimulate sales and distinguish herself as a visionary in the retail field, all at the same time: Announce across-the-board price cuts for newer iPhone models.

The company's customers, and probably its suppliers, would thank her.