updated 02:46 pm EDT, Wed July 30, 2014
Struggling chain attempting to reinvent itself to survive the modern market
In an interview, electronics retailer Best Buy CEO Hubert Joly believes that the day of the tablet may already be over. Citing observations at his stores, the CEO claims that the company has "actually had a revival of the PC business at Best Buy," giving credit to Microsoft for discontinuation of Windows XP, and to Apple for continuing to innovate for consumers.
Joly says in an interview with Recode that "the tablets boomed and now are crashing. The volume has really gone down in the last several months" and claims that "the laptop has had something of a revival because it's becoming more versatile." He points to the advent of convertible two-in-one devices, which can function as both tablet and laptop, as a watershed point in the migration back to computers
Referring to the decline that he is seeing in the tablet market, Joly said that "once you have a tablet of a certain generation, it's not clear that you have to move on to the next generation." Apple CEO Tim Cook made similar remarks in his last quarterly earnings conference call, in which he reconciled the issue of lower-than-expected iPad sales. However, with the US and Canadian market driven by Apple's iPad, Joly may just be misinterpreting data from this point in the market cycle.
The CEO lauds Apple for the way it "continues to do interesting things," saying that in the chain's "Mac sales have actually done quite well." However, deflation in the Windows market has been the primary problem with the PC industry before its apparent rebirth last quarter at Best Buy.
"So you now find laptops at $300 that used to cost $1,000" Joly notes, adding that "if there's more innovation at the high end of Windows, then you can have a revival."
Recode criticized the CEO for having "rented out" the chain to Apple, Microsoft, and Samsung. The CEO denies this as a problem, and says that the store-within-a-store concept gives consumers the opportunity to learn about "these giant ecosystems: the Apple world, the Android/Samsung world, the Windows world" in half an hour.
Best Buy could be called beleaguered. The company has been fighting industry trends for years, with consumers "show-rooming," or evaluating products in its stores for purchase elsewhere. When asked about the future of the company in light of the competition, Joly believes that "we'll be around in 50 years. We have a unique role to play for customers."