PC hardware tends to be an area where most retailers lose money or barely make a profit. Especially in the aggressive desktop market, where parts are cheap and suppliers are many. That isn't the case for Apple, who, foot for foot, is making more money than expensive jewelers, bringing in about $4,032 per square foot in their retail stores. With the culture that Apple endorses and the wide range of Apple-branded products they offer, it is easy for them to cater to their target customers. It works great, apparently:
Apple's recipe works like crack. Apple gives customers instant gratification by keeping inventory in stores, unlike its rivals. Apple has opened its stores slowly, building up anticipation for its stores. Finally, those stores are some of the toniest in retail---encouraging customers to drop far more money than they might in a dusty computer shop or utilitarian web site.
On top of developing extreme brand loyalty, the immense popularity of the iPod and its billions of accessories have no doubt helped Apple in establishing themselves. They are blaming some of their $200 million profit on good store location, with 170 retail stores around the world, 150 of those being in the U.S.