Apple and Dealer Relations

[xtekdiver]

Re: Shameful way Apple treats dealers

Originally posted by MacRAND
Dahl,

This should make you mad at Apple's treatment of independent dealers:

http://www.thinksecret.com/news/specialistchanges.html

Special Report: Apple cuts Specialist reps; further dealer changes Monday

November 2 - Exclusive Apple will announce Monday that it is firing many of its dealer Representative Apple Executives across the U.S., replacing them with existing inside phone liaisons and upping Apple Specialists' requirements to achieve certain discounts on equipment by as much as 40 percent...

Dirty dealing, Apple. Shame!

And why praytell is Apple doing this? Because these people are not representing Apple the way Apple want's to be represented. These changes are reflective of the fact that the current state of affairs isn't working and Apple isn't selling enough computers. Out with the old and in with the new! If your current plan isn't working then change it. That is all they are doing here.

 

[xtekdiver]

Originally posted by voicegy
But I wasn't quoting you, xtekdiver, I was quoting sethypoo.

Yes I know, sorry, but I don't know how to respond to your quote when your quoting from another post. It gets a bit confusing.

 

[xtekdiver]

Re: Broken promises, misrepresentations & lack of integrity

Originally posted by MacRAND
xtekdiver, you make a very good point about all these beautiful new Apple Stores throughout the country (2 high end stores in Metro-Phoenix area), they have set a high standard for independent Apple and PC stores to follow.

But, "screw them" Apple has apparently done, with misrepresentations, broken promises, and a serious lack of integrity. Suggest you read all of the link to my previous post. If you value personal and corporate integrity (enron scandal), then you should be concerned about Apple's misconduct. Selfish and Narcissistic behavior is inexcusable. Ethical behavior should be the standard, not the almighty bottom line.

Apple should be encouraging and protecting honest independent dealers, not undercutting their prices by unfair business practices. We don't tolerate it from Bill Gates and MS, nor should it be condoned just because it's Steve Jobs and crew at Apple, because the poor babies only have a 3.5% market share.

Problem is, without competition and alternatives, you and I become eventually become victims of our own greed when we ignore inappropriate corporate behavior and support greed. Macs are good value, but why should we pay a premium over a fair market price just for the privilege of having a place for someone's children to sit on beanbag chairs and play MacGames in the Apple Store while Daddy shops. I want to know why the Epson scanner for a few hundred dollars is rated as highly as a Nikon scanner for over $1,000 - and whether I should upgrade my HD in my iBook or simply replace it, and why is the Canon i70 a better mobile printer than the HP which appears to cost less - the Geniuses at the Apple store either don't know the answers, or they aren't allowed to share their real knowledge.

You say:
"Screw em! Buy from Apple.com.
Why should we care if somebody can't make a go of a business selling Apple products?
There is no competition; they all sell the computers at the same price."

The competition is underhanded, and indirect like manipulation of rebates and discounts. Apple makes rules that it enforces agains Independents, yet regularly turning around and breaking them itself. It's dishonest and dirty.

Yes, competition is good for us all, but unfair business practices SUCK, regardless of who is to blame.

Who needs these companies anyway? Like I said in another post, these channels only exist because there wasn't one before. Are there resellers for Dell or Gateway? No. Why should there be for Apple? These people want to sell Apple products...great, let them. But when Apple no longer needs that channel then bye bye. Apple only answers to Apple. It is Apples' bottom line that's on the line. What happend to the clone makers? They are history! Apple let them exist then changed their mind. Why? Because they were cutting into the bottom line. There is nothing here that says that a company has to allow their products to be sold via other channels. If Apple lets you sell their products to make money, then great. But when they decide that you are a liability then they will say sorry, no more computers for you. Go find something else to sell. Why we as buyers should care about some reseller is beyond me. Apple is competing with the likes of Dell, HP, Gateway, Microsoft, ect. They are not competing with Joe blows computers. If Apple makes a great product and lets you sell it for them then consider yourself lucky, otherwise find another job. This whole competition argument is so misplaced.

 

[xtekdiver]

Business 101

OK, I am a slick computer maker and I make insanely great computers. Now, I need to sell my insanely great computers to the unwashed masses. Hmm., I could let other companies that have store fronts sell my products for me and let them make a profit. Sounds good. I get to sell my stuff and they get to profit from it.

Time passes.

Gee, our stock price isn't doing well and our bottom line is suffering in a bad economy. Lets see. My resellers are doing a piss poor job selling my products and I am not making very much money. I could sell my insanely great computers myself and pocket all the doe, stocks go up, and my share holders are very happy. Dear Mr. reseller, I just don't have enough computers for you, in fact, now that you mention it, we don't need your services anymore. Is that anti-competitive? No. Am I going to go to jail because I don't let other people sell my products? No. Resellers are just that...resellers. Let them go find something else to resell. They exist as a service to companies that either can't or don't want to sell directly to the consumer. That is the reselling business. They compete with other resellers not the manafacturer of the products they sell. If Apple wants to "screw" the resellers by giving their own stores priority then they have every right (and obligation) to do so. There is no law that says a company must use the services of another company to sell their products. These companies exist only because they are allowed to. Apple is not a reseller. They make their own products and have every right to sell them any damn way they want; which is to say the best way to make the most profit; and if that is not via a reseller then oh well, that's the breaks. Guess you will just have to find another product to hawk.

You see, I need to be competitive with those other companies that make crappy computers and software. And in order to be competitive I need to let everyone know just how crapy their stuff is, and the only way for me to do that is to sell my stuff myself. I know what makes my ensanely great computers ensanely great; that stupid reseller doesn't nor does he care, he just sells stuff. Unfortunately, he is selling my stuff, and sorry to say not enough of it for me to keep letting him sell it. My competitors are kicking my a$$ and my stock holders are getting a wee bit nervous. Better get my ship straight and my iMacs in orders, if you know what I mean.

I realize I am being a bit sarcastic here, and my intention is not to insult anyone, but only to make my point in a humorus way. At least it's humorus to me Now, if I can just learn how to spell...

 

[ITR 81]

We only have CompUSA around here that sells Macs..and the Edu store only sells Apple softeware so it's very limited here. I bought my PB at CompUSA but now I wished I would've bought it online now.
We need Apple Store here atleast in the big city here. I don't mind going hr away to a store but I do mind having to go 4 or more hrs away to get to nearest Apple Store. So I shop online normally.

The only part Apple needs to improve on is make sure dealers get a fair share of the hardware and software not just the Apple Stores.

But like I said before Apple should think about buying some these places out and make them part of the chain of stores.
Only if the store is in good location.

Most places I shop at are online stores like Small Dog, Mac Zone, Mac Connection, Mac Mall, and the Apple Store.
Most those places do pretty well so I doubt I will see anyone of those out business anytime soon.

 

[MacRAND]

Name a liar, a thief and a pirate?

Competition is not "healthy" if Apple is selfish, lies and cheats.

If there is to be a sequel to "Pirates Of Silicon Valley" (1999), what would be a good name?
How green grows my Apple?
Rotten to the Core, Apple!

Down with Elephant and Polock Jokes - in with Apple Jokes:

Name a liar, a thief and a pirate?
a. Bill Gates
b. Steve Jobs
c. Richard Nixon
d. Black Beard
e. All of the above

No more than an Apple a Day makes the Independent Dealer go away - forever.

Q: How can you tell an Apple Executive is lying?
A: His lips are moving.

An independent Apple dealer shares:

"Since the opening of Apple retail stores, our business has fallen off dramatically and I defy Apple or any independent dealer to deny that," said one dealer in the central U.S. "They promised us Apple retail stores and the online store wouldn't be competition. They have turned right around and lied to us and they compete with us each and every day. Whatever they announce on Monday won't be good for independent dealers. They'll simply cut back more on the support they give us."
Under the direct control of Jeff Hansen, Apple's Senior Director of Channel Sales and Distribution, the Specialist program has found itself dwindling from well over 200 dealers just two years ago to a little more than 150 today. But despite the loss of many dealers who simply went out of business or are now exclusively selling Windows-based systems, the remaining dealers still account for about five percent of Apple's overall business -- a percentage that has stayed firm for some time. In comparison, catalog dealers account for over 30 percent of Apple's sales. Just recently, Apple executives admitted that business from Specialist dealers had gone up 19 percent from a year ago.
But for many dealers, the increase in business to Apple is not directly reflective of their bottom line. While they have had to adapt and change to a market that now sees dealers directly competing with the company they buy product from, many dealers admit that this direct competition from Apple is making it tougher to close a sale in the Mac market.
"It's tougher and this is no surprise to Apple," said one dealer, who asked not be named. "They kept telling us in the past two years, 'Oh, you don't want the little sales from Mom and Dad. We'll take those off your hands and sell to them direct or through our new retail stores. There's not enough profit in it for you. We'll do you a favor and you can sell the big-profit professional products.' But it's not that simple. Not only did they take away 'Mom and Dad,' they continue to sell to the very businesses they told us they wanted us to concentrate on."
Many dealers have complained that while Apple wants Specialists to think they are getting one segment of the market it doesn't want, the evidence is clear that the company is actively going after those customers.
"I have one simple question," remarked a Specialist dealer based in the southeast U.S. "Why do you think Apple wants us to so aggressively sell AppleCare extended warranties with our equipment? The answer is simple! They then have the email, address and phone number of a customer they can directly contact and sell future products and services to directly, cutting me out of future business!"
Many dealers Think Secret spoke to agree that Apple is using this marketing tactic against them. One dealer shared with us email forwarded to him by a long-time customer who after just 90 days of signing an AppleCare warranty was contacted by Apple about a 'special discount offer' if he bought peripherals from the Apple Store -- just miles from the Specialist dealer he originally did business with.
"They promised us two years ago when Apple stores opened that they would not do repairs in their stores at the Genius Bar," a Texas-based dealer said. "They are now doing repairs. They promised us they would not do software and minor hardware repairs at each stores on a per-hour charge rate. They are now doing exactly that. They promised us they wouldn't market directly to our customers based on a customer list they got from new AppleCare warranties. They have now broken that promise. They have lied to us at every turn. They can't be trusted. There isn't a dealer on this planet that trusts what they say they're going to do."
What makes dealers even more angry is the amount of business they lose because they can't get quantities of products from Apple. In the past two years dealers have piled up stories of new products they were promised by Apple, only to find a nearby Apple retail store, Apple Online store or catalog dealer stating they have more than they can sell.
"Take for instance the current situation," said one west coast dealer. "We can't get new iBooks or PowerBooks. But the Apple Store down the road from me has them stacked five high and three deep. I can't get new 40GB iPods, but the Apple Store has them. What do you think this says about me to my customers who see me without the product they want, and they can get it for the same price down the road? Do you think they're going to wait? Do you think they're going to come back? Get serious."
Whatever the specifics of Monday's announcements are, Apple Specialist dealers will not be surprised if in-house services and support for them are further cut back. "Every dealer knew this was coming," said one reseller who owns multiple locations. "It was just a matter of time. If you have fewer dealers and less and less business, why would you spend money on supporting them? But that's not the point. The point is this is happening because Apple deliberately went after taking our business and they are succeeding bit by bit."
"[Apple CEO] Steve Jobs is like any other big business man," said another dealer. "He wants all the profit for himself. If he can get you to buy directly from him, he makes more profit."

 

[caveman_uk]

The European Apple online store is so inept I'd rather buy from a reseller if I've got the chance. There's people over here who preordered Panther from Apple online and STILL HAVEN'T GOT IT!

But hey, we haven't got any of those shiny Applestores to go to have we....

 

[ITR 81]

Well I hope Jobs puts more stores in states with very little Apple presence before they go overseas.

But I can imagine when they do it will be big. I can see a Japan Apple Store thats 3 stories tall!

I think most of Apples US sales comes from online and mailorder resellers. I wonder what the net and gross was from some these dealers complaining? When the **** hits fan sometimes you need lay off some folks and reorganise the business spending structure and plan.

To me dealers were not to bright to begin with if they actually thought the Apple stores would not compete with them. Why the hell would I chose a Apple Store over them is same reason folks might goto a Dell or Gateway store...because it's owned by the company that makes the computer and there is feeling they will get a better deal through actual company instead a 3rd party dealer. But no matter what the dealers are having to buy from Ingram Micro or Micro Age. So to me alot supply and demand should be blamed on them as well as it's these two dist. here in the US that sell to all the dealers and hence control the supplies going to them.

To me it makes since that Apple store gets products first mostly because they don't have to deal with dist. which dealers do. So why the hell isn't someone yelling first at the dist which supplies the dealers before yelling at Apple. To me it should the dist. that should be yelling at Apple not the dealers. I think most dealers are just pissed with the new contracts and getting pissy because of that. Which to me sounds so much like Unions when they get in a hissy fit.

 

[pbooker]

Originally posted by ITR 81
To me dealers were not to bright to begin with if they actually thought the Apple stores would not compete with them. Why the hell would I chose a Apple Store over them is same reason folks might goto a Dell or Gateway store...because it's owned by the company that makes the computer and there is feeling they will get a better deal through actual company instead a 3rd party dealer. But no matter what the dealers are having to buy from Ingram Micro or Micro Age. So to me alot supply and demand should be blamed on them as well as it's these two dist. here in the US that sell to all the dealers and hence control the supplies going to them.

To me it makes since that Apple store gets products first mostly because they don't have to deal with dist. which dealers do. So why the hell isn't someone yelling first at the dist which supplies the dealers before yelling at Apple. To me it should the dist. that should be yelling at Apple not the dealers. I think most dealers are just pissed with the new contracts and getting pissy because of that. Which to me sounds so much like Unions when they get in a hissy fit.

I don't know what most dealers do - but I know my local store gets their product direct from Apple so there's no reason we had to wait an extra 4 days to get Panther. Apple could have (and should have) shipped the product so it was there in time to release it, just like it did for it's own Apple stores.

Business owners aren't complaining because they now have to compete with Apple - they're complaing because they were promised by Apple that they wouldn't have to compete. That's all.

 

[Totalshock]

This is not an apology for Apple, which, especially in the U.S., has been as bad as HP and the other big hardware vendors in telling their channel partners one thing, and then doing quite something else.

But the truth is, if you're making your living selling hardware, and that's all, moving boxes... you should probably consider a new model, unless your name is CDW, and you move a BOATLOAD of boxes. Because unless you're moving a massive amount, the margins you're making just don't mean long-term profitability.

So how do I, as Joe Computer Dealer down the street, compete with The Apple Store? Well, for consumers, there's very little you can do, aside from providing kick-ass service and knowledge, as well as an impartiality that The Apple Store will never have (If you sell hammers, every problem requires a nail.)

But for selling to small and medium business, you can do it by doing things a retailer can never do... offering good service. And I don't mean in-store "advice" on what to buy (which is always, coincidentally, something that's in stock and costs more than anything else for sale.) I mean providing network support, helping them find the software packages they need, installing and integrating when it needs to be done, helping them with things they don't think of. It's all about being a trusted advisor.

That's why you don't see many companies that identify themselves as "HP dealers" or what-have-you. Because most of those people prefer to think of themselves as solution providers... they listen to what the client wants, and craft a solution that best fits that need, whether it's Mac-only, Windows-only, Linux-only, or a mixture of all three, with a storage network on the back and more.

As for the "Dell doesn't have dealers" comment... much of Dell's sales to small business (companies too small to warrant Global Services engagements) are quietly supported by such solution providers.... guys who don't want the headaches of handling the boxes and making three per cent on that, but can make 20+ per cent by selling their knowledge and skills to support installations.

Small businesses are NOTORIOUSLY loyal to their local reseller. The local vet office doesn't want to be upsold to a dual G5 when all they need is a way to get their POS application which runs on an old iMac to talk to their small-business accounting package, which runs on Windows in the back.

In short, if they're trying to live off nothing but hardware revenues, Apple is probably doing them a favour by putting 'em out to pasture. But if they're adapting and becoming higher-touch and higher-service, and Apple still chokes them out... then that's a very very bad sign for Apple's future, and for Apple's philosophy as a business.

The irony here is that I can't even say "they're as bad as Microsoft at this," because if there's one company in this industry which is masterful at avoiding channel conflict, and making sure that all of its reseller partners are profitable, happy, and evangelists for its producs, it's Microsoft. That will be an unpopular statement, but I know of which I speak.

 

[blueBomber]

I think that each retail place gives their customers their own reasons to shop with that particular place.

For example; I recently bought my 12" PB from MacZone.com, because for $40 more I got an Airport Extreme card and a carrying case, these items would have easily cost me around $160 if I bought them myself. Apple's store offers no such bundle deal. A friend of mine just bought a new emac, from apple.com, simply because of the educational discount and the apple loan for education. Both of us got good deals on our purchases, but we chose where we bought them based on the value to our personal needs. This is how business compete. I for one will probably never buy anything from apple themselves, due to the fact that most resellers offer packages or free items. Plus, when MacZone says something will ship on a specific day, it does. My friend waited 2 weeks for his emac, when his ipod from the same order arrived the next day.

 

[Sailfish]

Apple needs exposure desperatly. It compiles the zip codes from Apple Store customers to determine new store locations.

Exposure with retail stores where potential new customers can come in and try/buy is very important for the success of Apple.

The independants are going to be hurt sure, but if Apple didn't make these "growth moves" it would become stagnent and handtied by those companies who sell "everything" and ignore Apples best interests for their own.

 

[fixyourthinking]

Re: Location, location, location

Originally posted by MDiddy
Apple is placing their stores in particular areas that meet a certain demigraphic, much mike any other retailer. They will put there stores where they think they can make the most money, not just to be "there" They have been very effective so far, I doubt that will go away any time soon. In the Chicago area, store #3 is opening this weekend, and a 4th store in Lincoln Park is probably a year away.

Grammar aside, I completely disagree. At first Apple did right by placing stores in strategic areas with "high income districts". Well, to place so many stores in a state is a mistake in my opinion. Seems to me, while not conveiniant, most people will drive 75-100 miles to an Apple Store.

In my opinion, a place like Atlanta doesn't need a 2nd store. Chicago, certainly doesn't need a 3rd and 4th total in Illinois.

They should have at least one in EVERY state before expanding to more than 2 in ANY state. (Of course states like Montana, Oklahoma, etc might be excluded) but my home state of South Carolina could easily support one. We have the highest concentration of Advertisment agencies per capita of ANY area in the upstate of SC where I live.

I say all this and I'm building my own retail store (Apple sales service support only) - I would welcome the competition and security an Apple Store would provide to my community. Right now, without a presence, other than CompUSA, and soon Best Buy, our area's mac User's feel unsupported, and, in a sense, unloved by Apple in general.

 

[xtekdiver]

Re: Name a liar, a thief and a pirate?

Originally posted by MacRAND
Competition is not "healthy" if Apple is selfish, lies and cheats.

If there is to be a sequel to "Pirates Of Silicon Valley" (1999), what would be a good name?
How green grows my Apple?
Rotten to the Core, Apple!

Down with Elephant and Polock Jokes - in with Apple Jokes:

Name a liar, a thief and a pirate?
a. Bill Gates
b. Steve Jobs
c. Richard Nixon
d. Black Beard
e. All of the above

No more than an Apple a Day makes the Independent Dealer go away - forever.

Q: How can you tell an Apple Executive is lying?
A: His lips are moving.

An independent Apple dealer shares:

"Since the opening of Apple retail stores, our business has fallen off dramatically and I defy Apple or any independent dealer to deny that," said one dealer in the central U.S. "They promised us Apple retail stores and the online store wouldn't be competition. They have turned right around and lied to us and they compete with us each and every day. Whatever they announce on Monday won't be good for independent dealers. They'll simply cut back more on the support they give us."


"[Apple CEO] Steve Jobs is like any other big business man," said another dealer. "He wants all the profit for himself. If he can get you to buy directly from him, he makes more profit."

Again, why should we care? Times change. When Apple stores first started there was all kinds of talk about how stupid this move was and that it wouldn't work. I am sure that in board meetings at Apple there was just that kind of discussion. Do we want the overhead? Will this weigh us down? Will it work? Insert question?

At any rate, I think at this point the Apple stores are doing very well and Apple has decided to up the anty and start building them all over the place. Uh oh, the poor cry baby distributors are facing competition from the company that lets them sell their products. Does that mean Apple lied? Absolutely not. The market changed, Apple's gamble worked, and now Apple, for the benefit of their company, is taking advantage of it. If Apple didn't do this and worried about poor distributer then their market share might drop to 2%, or 1%, or none %. Then what will the stupid distributers sell? Why are you worried about some distributer and not the company that makes your nice computer? I think you need to check your loyalties. So what if Steve Jobs is mercanary, every CEO in America is, that's the way it works in this country; it's called compitition. Only the strong survive. If he wasn't fighting for Apple's survival then you might actually have to use the only option out there, Microsoft. Seems to me that Apple is only one of a very few options available to people. Screw the distributors, let Apple promote and sell their products any way they want, and if there is something left over for mr. distributor and he can make a buck too, all the better. Let them adapt or let them sell somebody elses product.

 

[fixyourthinking]

The latest & The greatest for those that can't waitest

Originally posted by pbooker
I don't know what most dealers do - but I know my local store gets their product direct from Apple so there's no reason we had to wait an extra 4 days to get Panther. Apple could have (and should have) shipped the product so it was there in time to release it, just like it did for it's own Apple stores.

Business owners aren't complaining because they now have to compete with Apple - they're complaing because they were promised by Apple that they wouldn't have to compete. That's all.

That's just the problem - your local dealer SHOULDN'T have been selling Panther on the release date. What I will do when I open up is demonstrate the OS and have a "Panther party" on a day like that. Why would you, as a dealer, be somewhat dishonest and promote a potential problem with your customers. I never EVER sell latest and greatest. For instance, the newest PowerBooks may potentially have spotty screens. That's why the next generation will probably be the one to buy. (The speed bump usually is) I would not and have not sold Panther to a single person or business. I will when the first update comes out.

This is where I might receive some benefit from an Apple Store. The people who have to first in line will most likely have to get ME to fix it when they experience problems.

G4 iMacs, Dual Ghz G4 Towers, iBook G3s are the tested, little problem units. Apple is actually, in a small way, hoodwinking you into thinking you should have the greatest, right now thing, before they work out the bugs.

Side note: I completely agree with the post that stated hardware is NOT where the money is at and any dealer that thinks so is destined to fail.

 

[gregorypierce]

If Apple wants to replace the dealers...

If Apple wants to replace the dealers, they need to do a far far better job than they are currently. Apple's entire retail operation is a prime example of disorganization and inefficiency.

If you want to buy something 'direct' from Apple you can buy from the online store, or the apple retail stores, or the website which services the retail stores. NONE of these share information such as discount eligibility for corporations and students. You can only get these from the 'official' apple online store (what you don't trust the Apple retail stores).

If you have an order at the official Apple web store, you can't even pick it up at an Apple retail store - even if they have that very item in stock! That is just lidicrous and inefficient beyond belief.

The Apple stores are one of the slowest ways you can order ANYTHING from Apple since they apparently don't work on - nor ship on weekends! This is profoundly stupid, especially with respect to shipping. If I want to pay to have something delivered on a Saturday, hell why not deliver to me on a Saturday. Why is everything measured in business days?

MacMall in my opinion is far more efficient and for more capable a seller of Apple hardware than Apple themselves. If Apple wants to 'replace' folks like this, then they damn well need to do as good a job as they do because I cringe everytime I have to order things from Apple because I always know that unless its through a corporate discount, its going to be more expensive, slower to ship, and harder to track its *real* status than if I'd ordered from just about any of apples dealers.

 

[MacRAND]

Apple dealers biting back - NO rotten Apples!

If Apple continues restraint of trade through a vertical monopoly, not only will it get sued by independent Apple Dealers, the Federal Government will step in with criminal charges.

Having a good, well designed product is no excuse for immoral or illegal behavior.

So, is product loyalty a good excuse to ignore corporate corruption?
Apple = Enron?

Bite the Apple - look for worms!
fraud, corruption, breach of contract, unfair competition, false ads, restraint of trade...

What makes us think that Apple hasn't been lying to us, its customers, too?
It has! Note recent settlements of class action lawsuits regarding Apple's misrepresentations regarding OS X.
••••••••••••••••••••••••••••••••••••••••••••••••••••

APPLE DEALERS BIT BACK
Mac sellers say computer maker cuts them out in favor of its outlets -- and they're fighting mad

Henry Norr, Chronicle Staff Writer Monday, February 3, 2003
------------------------------------------------------------------------
Apple Computer Co. has been hit by a growing number of lawsuits filed by Mac dealers who are upset by the company's alleged efforts to lure their customers to outlets that Apple owns. They are also fed up with what they say are long-standing problems in the company's service and billing systems.

Tom Santos, owner of San Francisco's MacAdam, one of the largest Apple- authorized storefront dealerships in the nation, filed a multimillion-dollar complaint last month that accuses the Cupertino company of fraud, breach of contract, unfair competition, false advertising and even violation of the federal RacketeerInfluenced and Corrupt Organizations Act.

Santos isn't alone. Jack Kohler, owner of Mac Tech Systems of Bend, Ore., filed a similar case last fall. A Los Angeles dealership, Computer International, filed a suit last week.

And Elite Computers & Software of Cupertino, the owner of four Bay Area stores that operate under the ComputerWare name, plans to get on the bandwagon later this month, according to its chief executive officer, Thomas Armes.

Lynn Fox, Apple's corporate media relations manager, declined to comment on the suits by dealers.

Tensions between Apple and its resellers are nothing new, and similar problems have frequently arisen in relations between other computer manufacturers and their dealers.

But the slump that has plagued the entire industry for more than two years, combined with Apple's move toward a distribution system less dependent on independent dealerships, has apparently heated the conflict to the boiling point.

"They've just been cheating us for years, making us look bad and screwing our customers," said Santos, 47, who has operated MacAdam for 14 years and last year recorded sales of more than $6 million. "I've got six big binders full of horror stories, all carefully documented.

"It's not about the money," he said. "The only thing I've ever asked until now is that they fix the problems." But his San Francisco attorney, Marcus Merchasin, said: "We figure the company probably owes Tom close to $12 million -- that's our target." That's not counting the punitive damages, which could treble the total on some counts, and legal costs the plaintiffs are also seeking to recover, he said.

No timetable for the case will be set until a dispute over the venue is resolved, but state rules require that such cases go to trial within one year, according to Merchasin. All the suits have been filed in Superior Court for the County of Santa Clara, but Apple's lawyers have sought to move them to the U.S. District Court in San Jose.

In recent years, Apple has pushed to boost Mac sales through company-owned channels -- its direct sales force, its online store and the boutiques it has recently opened in Emeryville, Palo Alto, Santa Clara and 48 other upscale locations around the country.

Since launching the Apple-owned stores, Jobs and other company executives have repeatedly said that the purpose of the initiative is to increase the visibility of the Mac platform and attract "switchers" from Windows, not to take business away from the independent authorized dealers who still account for most Mac sales.

But Santos said Apple gives its own stores a variety of advantages not available to dealers, including the first shipments of hot new models, and discounts and promotions, such as free memory and printers.

What angers him the most, Santos said, is that Apple's own sales representatives, when talking to customers, regularly disparage the competence and even the integrity of independent dealers, including dealers like him who have a long record of success and have been certified by Apple to service as well as sell its products. As proof, dealers have Apple representatives on tape.

 

[Lancetx]

Re: Re: Re: Screw em!

Originally posted by xtekdiver
Then let them compete! The point is they can't! And they can't because they suck! Who thought of Apple stores? Steve Jobs. Anyone could have done it, but no one did until Steve Jobs took control. These people are just out to make a buck and don't give a rats ass about Apple's image. Jobs understand very well that if this company is to succeed and grow then they must market their products and deal with the problems of perception; which is to say that most people think Apple computers are over priced and can't run common everyday applications they use. Let's face it folks, Apple has 3% market share because most people have no clue what an Apple computer is or why they should even care. Apple stores are critical to getting that message to the masses of ignorant windows slaves. These resellers present Apple in a very bad light and that has to change. Now it will. Why? Because if you want to compete then you have to offer something better. That's competition!

I couldn't agree with you more. These "resellers" certainly haven't gotten Apple very far over the years now have they? If Apple is ever going to climb out of the single digits in market share, they're going to have to take the bull by the horns and do it themselves.

Anyone that needs an example just needs to go to a CompUSA location first and then visit an Apple Store afterwards to see the world of difference. I say more power to Apple for being assertive in getting their products out there. Resellers be damned, Apple is now obviously having to do it themselves since no one else is ever going to...they've been a second class citizen in other's computer stores for long enough.

 

[ddbean]

IAD AND their customers...

Apple is screwing IADs AND their customers. I'm a prime example of what I mean. When G5s were announced, I make a choice to upgrade my box AND support my local dealer, so I pre-ordered and paid in full on a dual G5 with 9800 card and BT. I'm still waiting for my CTO is be delivered from a July 23 order date. Yet people who have ordered in Sept on web got theirs delivered in mid oct, with even more custom config that I got.

This is such a wrong, wrong, wrong business practice that there can be such a difference between a web order and IAD order.

The IAD I support thinks Apple is trying to convert them into a local repair shop only to save on shipping cost for Apple, but how in the heck can they stay in business on repairs only? They need 8-10 customers a day for repairs to make that work, and that's just not an option.

I love the Apple stores in the malls, but I hardly consider them "genius" at the bar. I can ask my IAD any question and get an answer I can trust (save your money, or I don't recommend doing that for what you're trying to do), or even an "I'm not sure, but I can find out for you". The "genius" at the Apple Store couldn't even fix a panther problem we're having with the keychain on an iBook.

There are thousands of IADs around the world and only 65 Apple stores, so Apple needs to give the IADs full support with equal product availability and make the experience of buying an Apple product a great user experience REGARDLESS of where that user chooses to go.

And that's my 2 cents...

(btw, mine was supposed to be in transit today, going ground, so I hope I can stop my bitchin here soon)

 

[Phil Of Mac]

Why doesn't Apple just go to a direct-sales-only business model, killing most of the dealers and buying out the others, especially those with some expertise in direct solutions (video, graphics, etc.)? Lower prices for us, more profits for them.

Why not? They don't have enough Apple Stores yet, that's why not.

 

[Lanbrown]

Originally posted by bobindashadows
I'm not gonna lie - a local Apple store is putting a local retailer (a previous winner of the best retail location award not too long ago) out of business..

Consumers will shop where its most convenient, best prices and service. If a company goes out of business, it was based upon their actions.

 

[phranque27]

Re: Re: Re: Screw em!

Originally posted by xtekdiver
Then let them compete! The point is they can't! And they can't because they suck! ... These resellers present Apple in a very bad light and that has to change. Now it will. Why? Because if you want to compete then you have to offer something better. That's competition!

Unfortunately this is sorta true. Apple Resellers were sitting on a monopoly in most towns... a medium-sized city generally has one or maybe two of them. And what happens when you have a monopoly, kids? Exactly, you stagnate. These resellers were turning into the equivalent of the phone or electric company. They were the only ones who had Macs, and so they stopped renovating their stores or being aggressive sometime around 1987. Hell, many of them still have posters announcing the "new" bondi iMac!

I don't mean to paint them all with the same brush -- many are doing an awesome job. But competition is a good thing. The Computer Store, which has a horrendous reputation here in Seattle, saw the writing on the wall when the Apple Store moved in down the street. They completely remodeled their store, rebranded themselves as "The Seattle Mac Store", and FINALLY got around to taking down the rainbow-colored Apple logo that's been gracing their storefront for nigh on a decade! Competition forced them to improve.

Smart dealers willl survive in the niches, by providing what Apple can't: local knowledge, connections, and service.

Apple's tactics are sneaky and underhanded... anyone who doesn't see this is suffering from a case of the RDF: I mean, if Microsoft was accused of HALF the things Apple is being accused of in this article, y'all would be screaming bloody murder.

The truth is that Apple is going after the Mac dealers' clients because they're easy sales. If Apple wanted to really improve their market share, they'd be targeting PC users, instead of focusing so much energy on grabbing EXISTING MAC USERS FROM THE RESELLERS!

So the lazy apple corporate rep can go to his boss and say "Hey I won three corporate accounts today", and conveniently forget to mention that those accounts were already being served by a Reseller, and all he did was offer the account a discount to switch to apple Direct. The lazy rep then gets a fat commission and a raise, and the folks in Cupertino believe their own hype and think they've scored a big victory.

 

[MacRAND]

So Apple can have greater market share, it's okay to screw indie Apple dealers?

It's okay to screw independent Apple dealers so Apple can have greater market share? Really?

Have you ever wondered why CompUSA, BEST BUY, Fry's Electronics and other big box stores are so reluctant to trust Apple enough to invest in substantial displays of Macs in their stores?

Independent Apple Dealers have thinned out from 200 to about 150 in the last couple of years, yet are reportedly responsible for 19% growth in sales over the last 4 quarters. Growing Apple is what they do well.

Now, if Apple steals the independent business for themselves through unfair and illegal business practices out of greed, that's acceptable? I don't think so! It's dishonest and immoral.

Has anyone forgotten how Apple licensed and encouraged several companies to manufacture Mac computers back in the PPC 604 chip days (PowerMAX), then turned around and pulled their licenses (which they had a contractual and legal RIGHT to do) leaving UMAX and several other Apple enthusiasts high and dry with development costs they had to eat because they could no longer spread them over several years and become profitable.
RESULT: Trust Apple? Sure, at your peril, especially financial.

Is it any wonder that hardware manufacturers of Apple peripheral products and software DO NOT trust Apple?

Apple has a good public image because of well designed product, but
it has a horrible commercial reputation among all but a few industry titans like Adobe and Microsoft, and even they watch their back.

Steve Jobs is currently well perceived by the public, but all his popularity could come crashing down with a nasty little scandal... and, one is brewing. Where is the Chairman of ENRON today?

Beware! the ides of March 2004.

 

[MacRAND]

Judgment against Apple in G3/OS X Class Action Lawsuit

Did Apple get caught lying to us, or what?


Case No. BC 267266

MASON BANCROFT, et al., and
other similarly situated consumers,
Plaintiffs,
V.

APPLE COMPUTER, INC., a business entity from
unknown; and DOES 1 through 20, Inclusive,
Defendants.
____________________________________

NOTE: FOR A COPY OF THE JUDGMENT, CLICK below -

http://appleosx.rosenthalco.com/notice.html

 

[Dahl]

Originally posted by Lanbrown
Consumers will shop where its most convenient, best prices and service. If a company goes out of business, it was based upon their actions.

True, but I'm wondering if Apple is using the Starbucks way. Moving in a high rent area and just wait for the resellers to close doors, even if Apples own store sales can't pay for it's own rent. Many resellers simply can't afford to to be in a high rent area.
Apple resellers have to find new ways to attract people, just like the Seattle Mac store mentioned earlier. Maybe some stores would benefit from being a part of a Apple User group, does anybody still use those ?

btw. Great thread, guys!