Best Buy beats quarterly earnings expectations, plans to expand Apple Watch availability to all 1050 stores by October, start selling AppleCare
Best Buy deepens links to Apple, says watch has been a smash hit — Best Buy BBY continued its remarkable turnaround last quarter, with a big assist from Apple AAPL .
Context & Ripple Effects
The August 7 rollout of the Apple Watch at Best Buy has already paid off within a single quarter: the retailer beat earnings expectations with what it calls 'a big assist from Apple,' and is now moving from the initial store subset to all 1,050 locations by October while adding AppleCare to the offer. That caps a year of deliberate re-alignment toward Apple — Best Buy had earlier reversed course to support Apple Pay in its iOS app and stores.
First-order effects
- Best Buy gets two immediate lifts: Watch-driven traffic and revenue in the quarter just reported, plus higher-margin AppleCare attach on every unit once service plans go on sale alongside the device.
- Apple gains a nationwide physical distribution channel for its newest category without opening a single new store of its own — all 1,050 Best Buy doors become Watch points of sale by October.
Second-order effects
- Early demand signals were strong enough to justify the fast expansion: Watch sales initially outpaced the original iPhone and iPad launches and topped $1B in early revenue, giving Apple leverage to push deeper into third-party retail while squeezing shelf space for rival wearables at big-box chains.
- For competing smartwatch and fitness-band makers, Best Buy's floor space becomes zero-sum — every Apple display with an AppleCare pitch attached raises the bar for their own retail placement and attach-rate economics.
Third-order effects
- If the pattern holds, the retailer-as-Apple-services-arm deepens over time: six years later this same relationship puts Best Buy Health's Lively emergency and fall-detection services onto seniors' Apple Watches, turning the original accessory-shelf deal into a healthcare channel.
- Stratechery's March analysis argued Apple's design prowess, retail reach, and customer base made it best positioned to own wearables — Best Buy's accelerating commitment is one more data point that category distribution is consolidating around the ecosystem leader rather than staying neutral.
The trend: Consumer-electronics retail is reorganizing around Apple's ecosystem, with big-box chains evolving from neutral resellers into dedicated distribution and services channels for the platform leader.