Byte of the Apple
Business Week Online
recommends eliminating independent Mac dealers that are too close to Apple retail stores. The column by Alex Salkever, technology editor for BusinessWeek Online, mentions
the recent lawsuit by some Mac resellers against Apple
and says that complaints by resellers are nothing new.
“For years, these dealers have griped that Apple headquarters treats them badly, withholding product shipments, refusing to address billing concerns in a timely manner, and pulling other sundry tricks. Apple has always denied these accusations,” Salkever writes. “But CEO Steve Jobs’ moves to build a fleet of his own retail stores and place Apple-badged employees in CompUSA’s big-box outlets to goose sales have only reinforced the indies’ impression of mistreatment.”
His solution? Apple should realize that the lawsuit is a wake-up call and “provide some clarification and guidance to the independents, many of whom have dedicated their life’s work to supporting the Mac.” Part of that is deciding whether the company wants any third-party resellers located near their own stores. Servicing the resellers is probably much more expensive than supporting the Apple Stores and the mothership can also pocket higher margins at its own outlets, Salkever opines.
Salkever thinks Apple should make the tough call and cut off all resellers that fall within a certain distance (though he doesn’t specify what the distance should be) while leaving alone the consultants who sell Apple wares as part of their business advising companies and organizations.
He notes that one-tenth of Apple’s worldwide sales now come from its own stores, according to Charles Wolf of the investment bank Needham & Company. Wolf calculates that Apple is getting a great internal rate (about 52 percent) of return on its store investments.
“So it seems Apple is doing a better and better job selling through its own stores,” Salkever writes. “And unlike the resellers, Apple’s snazzy outlets attract not just Macheads but Windows users who might make the switch. The stores even get sweet rental rates at malls because they’re foot-traffic magnets.”
However, he does think that Apple should beef up local resellers in places where they’re not planning on building their own stores.