Apple to Open First Retail Store in San Jose, Calif., Area.

     Apple Computer's first Bay Area retail store opens 10 a.m. Saturday at 451 University Ave. in Palo Alto. Apple is pushing ahead with the plans, despite an economy that looks increasingly unpleasant for retailers. 
     Consumer confidence plunged last month to the lowest levels since the start of the Persian Gulf War, according to the Conference Board. In a special survey the New York group took after last month's terrorist attacks, 11.4 percent of respondents said they will postpone major purchases. 
     Apple's computers, which start at $799, qualify as major purchases -- but Ron Johnson, Apple's vice president of retail, said Apple is determined to plow ahead with its strategy. The company is in this for the long haul, he said. 
     "This is a tough time to open generally any retail store," Johnson said. But "we are as committed to our retail strategy as we have ever been." 
     Johnson said Apple still plans to have 25 retail stores open across the country by the end of the year, and hire 675 employees. During the economic boom, Apple streamlined manufacturing, cut inventory levels and built up a $4 billion stockpile of cash. That should serve the company well heading into the retail effort, when it is important to correctly gauge demand. 
     "The key thing to think about is managing your inventory well," said Johnson, a former Target executive who has been in the retail business for more than 16 years. "Retailers have trouble in times like this when they have inventory to mark down." 
     Palo Alto store manager Steve Cano worked with Apple products at the CompUSA on Market Street in San Francisco before he came to Apple. He said the 28 Palo Alto store employees include three independent filmmakers and a Netscape executive who works part time, and that about 500 people applied for positions. 
     Apple Chief Executive Steve Jobs said the economic slowdown has not dented his resolve. In an interview, he paraphrased a line at the end of the movie "When Harry Met Sally": " `Once you figure out what you want to do for the rest of your life, you're anxious to get started.' This is going to be a fantastic way for us to get a lot of new customers, we hope, and to really take care of the ones we have." 
     Jobs said he looks forward to visiting the store, which is not far from his Palo Alto home. 
Not everyone in the Apple fold is enthusiastic about the stores. Several Apple retailers have voiced fears in the past several months that they will now get less attention from Apple, and that Apple-branded stores will lure customers away from them. Apple has said it wants its stores to serve as examples for third-party retailers, not to replace them.
     The atmosphere in the Palo Alto store is markedly different from that of Jobs' favorite retail location, an upscale New York home-furnishings store called Moss. That shop in the Soho neighborhood is named after design guru Murray Moss, and it's very serious about keeping things just so. Not only is touching the merchandise off-limits there, taking notes is forbidden, too. 
     Though design is a trademark of Apple products, Jobs wants customers to touch things in the Apple store -- to edit movies, burn music CDs and try out the new Mac operating-system software. The 6,000-square-foot Palo Alto store has a feel that's part art gallery, part perfume counter. Light streams in through large windows through which one can spot people lounging at the Borders bookstore across the street. 
     "All of our competitors sell the same exact product. You buy a Dell or Compaq or HP, and these are all the same computers with a different logo on them," Jobs said. "We have a different strategy. We think we're winning because we're innovating. We want to be able to communicate these innovations to our customers." 
     Apple has not disclosed locations for other Bay Area stores, but company officials have hinted more could be coming. Months ago, Apple said it will open more stores next year, but the timing and location depend on the performance of the first group. According to Apple's Web site, eight have opened so far. 
     Apple did not give specific crowd estimates for opening weekend, but said "thousands" might show. Apple store openings generally draw between 800 and 1,500 people.