Apple stores new twist?

[Day Tripper]

I have recently seen this and am wondering what your take is on it:

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

Is there something rotten happening in Apple these days?

 

[Awimoway]

I read the article yesterday. Is something rotten? I don't know. ThinkSecret is great at predicting releases but they seem to have a burr firmly up the butt where sales issues are concerned. It makes me wonder if whoever is behind ThinkSecret is a third-party Apple vendor with an axe to grind (and if that's where some of their advance knowledge comes from).

On the other hand, Apple has staked a lot of their reputation on the success of the Apple Stores in terms of being profitable and boosting market share. Recent reports indicate that Apple's market share is not growing and may be continuing to shrink. Dismal news no matter how you look at it.

But I don't really have a problem with Apple cutting themselves a discount at their Apple Stores as long as it's legal (and I'm no attorney). The stores are a lot nicer and put out a better front for the product. If market share ever does turn around (and I'm beginning to have my doubts that the Mac's merits will ever go recognized by a wider margin of the public), I would think that the stores would play a prominent role as long as they are more widely accessible than is currently the case.

My impression is that the big stink is that Apple lied to their third-party vendors and under-cut them, not that they did anything illegal. Am I right?

 

[Day Tripper]

"My impression is that the big stink is that Apple lied to their third-party vendors and under-cut them, not that they did anything illegal. Am I right?"

I, too, am not an attorney, so I can't answer the question as to whether Apple has done anything illegal. I suspect they did and will get away with it, as Micro$oft continues to, even after judgements are tallied against them.

The more troublesome issue is that Apple has blatantly lied to their stockholders and to Wallstreet. The SEC might find this more troublesome than not. As for bad publicity, the cost will be hard to estimate.

Thinksecret's pension for giving a voice to reseller issues has not gone unnoticed by me either. I believe it has much more to do with the nature of the battle--the little guys vs. the Big Corporation--rather than Nick de Plume being a third party vendor.

Thinksecret seems to be ballsy enough to give a voice to what, otherwise, would be an unheard message. That's my read on it anyway.

Last point I am wondering about---if Apple is successful and eliminates all third party vendors, will they start screwing with us next? Already, I am becoming more skeptical in dealing with Apple corporate. Look at the iPod battery issue, for one. Apple made changes ONLY after class action suits were filed. Same deal with the powerbook video problems as well as the iBook logic board difficulties.

 

[Chip NoVaMac]

"My impression is that the big stink is that Apple lied to their third-party vendors and under-cut them, not that they did anything illegal. Am I right?"

I, too, am not an attorney, so I can't answer the question as to whether Apple has done anything illegal. I suspect they did and will get away with it, as Micro$oft continues to, even after judgements are tallied against them.

The more troublesome issue is that Apple has blatantly lied to their stockholders and to Wallstreet. The SEC might find this more troublesome than not. As for bad publicity, the cost will be hard to estimate.

Thinksecret's pension for giving a voice to reseller issues has not gone unnoticed by me either. I believe it has much more to do with the nature of the battle--the little guys vs. the Big Corporation--rather than Nick de Plume being a third party vendor.

Thinksecret seems to be ballsy enough to give a voice to what, otherwise, would be an unheard message. That's my read on it anyway.

Last point I am wondering about---if Apple is successful and eliminates all third party vendors, will they start screwing with us next? Already, I am becoming more skeptical in dealing with Apple corporate. Look at the iPod battery issue, for one. Apple made changes ONLY after class action suits were filed. Same deal with the powerbook video problems as well as the iBook logic board difficulties.

Legal issues may surround independents verse the big box stores and the Apple stores. In the camera industry everyone pays the same for the gear, at the same unit levels. There may be better finance terms or return privileges for larger players. But for a company willing to buy units to compete with the big boys, they can.

The other important issue is for the stockholders. This is why the government many years ago forced Kodak to give up their on retail stores.

 

[rainman::|:|]

As to the question of legality. If these allegations are true, then Apple did in fact break the law, and in a big way-- Purposefully lying to the SEC for years, misleading investors, etc. It's not illegal in itself to undercut the competition like this, but they explicitly state in SEC filings that they do *not* grant Apple retail stores any discount, which affects the value of their stock and consumer confidence-- Long story short, they could be bleeding money out the retail stores, and no one would know it from their reports.

If this is true, Apple's got some very rocky days in store for it. Their stock will go through the floor if this comes to pass... I don't know what a worst-case scenario might be, but it could include massive SEC fines, etc. If they lost too much investor confidence, their stock would be worthless...

paul

 

[raynegus]

Hmmm, how can I join in the "let's sue Apple" bandwagon? I'm an American, I must sue them, I must sue someone... anyone. Must... sue.

Ah I'll just keep it simple and sue my doctor.

 

[briankonar]

i knocked over a cup of hot coffee into my lap using my Apple keyboard...let's get those bastards!!

 

[Awimoway]

Hmmm, how can I join in the "let's sue Apple" bandwagon? I'm an American, I must sue them, I must sue someone... anyone. Must... sue.

Ah I'll just keep it simple and sue my doctor.

There's a line in a movie along the lines of "Why don't you get rich the American way and sue someone?" but I can't remember the movie or the exact line.

 

[Day Tripper]

Oh you kids. Making jokes about sueing and such when there really is something substantive at issue here. What's the world coming to anyway?

 

[Fukui]

Last point I am wondering about---if Apple is successful and eliminates all third party vendors, will they start screwing with us next?

Like dell and thier lower pricing?

 

[Macmaniac]

I work for an independent Apple Store, if this is true it is rather upsetting, we don't make a huge profit off selling a computer. Apple gets a huge return per computer that we sell. Still Accounting makes me sick, there is always some loophole that someone is exploiting, I hope this is not true, but there seems to be some solid evidence.

 

[Naimfan]

Well, if Apple was misstating things to the SEC they potentially have some liability. From reading the article, there simply aren't enough facts to prove anything. And I find it incredible to believe that Apple would do anything that wrong intentionally.

One simple possibility is that the Apple stores do that much more volume than resellers and thus get that much more of a discount. Nothing wrong with giving differing discount levels based on volume. Another is that Apple, like all RBOCs, maintain several different sets of books and that one shows the much lower pricing and one set shows normal pricing.

Best,

Bob

 

[Day Tripper]

Well, if Apple was misstating things to the SEC they potentially have some liability. From reading the article, there simply aren't enough facts to prove anything. And I find it incredible to believe that Apple would do anything that wrong intentionally.
​

Perhaps Apple knew full well what they were doing was wrong and believed they could get away with it because of having $4 billion to spend on their legal department if necessary. It seems to me that Apple has the goal of establishing their retail division, both brick and mortar as well as online, to be the exclusive purveyors of their products. Period. OK. So what's the problem? They are doing it in such a fashion as to hold onto their resellers until their own retail division becomes financially solvent. THAT'S where the difficulty has been taking place. Wanting their cake and eating it too.

Did they/ do they have an alternative, if my speculation is accurate? Yeah, I think so. Heck, if I can imagine some alternatives, I am sure their Board of Directors could squeak out a few themselves. It is the attitude of wanting to control the entire show that continues to hurt Apple and has kept them out of the mainstream as long as it has.

By the way, the comment about Dell doesn't make any sense because Dell computers, as well as most other Wintel machines, are really made by a mother company called Sandmin (sp?). Dell just puts its name on the machine.