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View Full Version : Apple responds to reseller contract disputes (Dell, Target..)


medea
Apr 10, 2003, 01:49 PM
"Following yesterday's Think Secret report that Target and Dell will no longer be carrying the iPod, Apple has announced that those dealers who rejected the new reseller agreement account for only a small percentage of Apple's revenue. "As part of the regular renewal process with Apple Authorized Resellers, we invited our resellers in the U.S. to sign new agreements as of April 1, 2003," Apple said in a statement released on Thursday. "Resellers that have not currently renewed made up less than 1.5% of Apple's worldwide revenue in 2002." The MacObserver notes that Apple's net sales for 2002 were US$5.742 billion, with that 1.5% representing a potential of some $86 million in lost revenue. Apple also said that "since contracts only expired recently, some contracts continue to be signed." According to the MacObserver, some 50 dealers and resellers in the U.S. are not signing the new agreement that puts specific restrictions on them in dealing with Apple."
http://www.macobserver.com/article/2003/04/10.11.shtml

Sounds like it shouldn't hurt apple that much in the long run, and to be honest I personally have not witnessed many iPods being moved through the Target stores here, or Best Buy either.

yzedf
Apr 10, 2003, 03:02 PM
$86,000,000 in lost revenue. OK fine. Thing is, that program (iPod's at Target/Dell) started in what, October of 2002?

Apple sells more 10GB iPod's than anything else. That is 215,538 iPod's that will no longer be sold by Apple, assuming they sold just the 10GB units.

Of course that is not the only product available that accounts for the $86 million, but it is a huge chunk of it.

This is foolish, and they are already trying to downplay their own idiocy. Steve Jobs is an innovator, no doubt. But he is an ass when it comes to dealing with people that want to sell "his" products. The man brings OS X and iPod's and how many other new exciting products to market, and Apple's market share has not risen appreciably? He better watch out, or he will be tossed out on his arse again by the board...

Any way you try to spin it, Apple selling less, is BAD.

ftaok
Apr 10, 2003, 03:05 PM
Apple's response sounds more like spin to me.

Of course losing Target and Dell as resellers for iPods isn't going to be a big percentage of Apple's Worldwide revenue. It's an Apples and Oranges comparison.

I'd like to see the percentage of iPod revenues that Target and Dell was responsible for. I'm guessing that it's higher than 1.5%. That's the number that I'd like to see (if I was a shareholder).

In the end, as long as CompUSA and Best Buy are still selling iPods, losing Target and Dell shouldn't hurt too much.

yzedf
Apr 10, 2003, 03:15 PM
Apple's US sales for 2002 were:

http://biz.yahoo.com/e/021219/aapl10-k.html

$3,088,000,000

$86M out of $3.088B is 2.78% for the year. But that $86M was mostly in the 4th calendar quarter = $772M (based on 1/4 of 3.088B). That is more like 11.14%

There are a lot of big assumptions here... but you can see the trend. Apple threw away more than they are willing to admit to, I am sure.

ftaok
Apr 10, 2003, 03:24 PM
Originally posted by yzedf
Apple's US sales for 2002 were:

http://biz.yahoo.com/e/021219/aapl10-k.html

$3,088,000,000

$86M out of $3.088B is 2.78% for the year. But that $86M was mostly in the 4th calendar quarter = $772M (based on 1/4 of 3.088B). That is more like 11.14%

There are a lot of big assumptions here... but you can see the trend. Apple threw away more than they are willing to admit to, I am sure. It seems that the $86MM number includes the total revenues generated by the 50 retailers who got cancelled. I'm only interested in the revenues generated by the iPod by Target and Dell (these guys were only selling iPods, right?).

I'm sure that Target and Dell aren't responsible for $86MM of iPod revenues for 2002.

I don't think that Apple will be releasing these numbers any time soon.