The downside to Apple going digital - Resellers and Students lose (long winded)

Discussion in 'Apple, Inc and Tech Industry' started by madog, Jul 20, 2011.

  1. madog macrumors 65816


    Nov 25, 2004
    Korova Milkbar
    TLDR (too long; didn't read)- With Apple moving to digital distribution, students pay more for the software, and (obviously) brick and mortar stores will suffer a bit.

    To put this out there right away I work for a college campus that is an authorized Apple reseller. We sell their computers at the official Apple education discount, and their software at a discount (sometimes) only available to education stores.

    With Apple's move to digital only distribution, the first people to loose out are Apple's authorized resellers. Those stores that literally made Apple what it is today. Apple only existed through authorized resellers before their foray into brick-and-mortar. For the longest time, authorized stores were double that of the retail stores that existed. However, these days Apple is strict on handing out licenses, and even stricter on handing out service provider licenses, and purposefully setting up locations near other popular third-party locations to cut them out of business.

    While software isn't a huge markup, neither is the one from Apple's cost on the machines (for resellers). So the software was just there to balance it out, in my opinion. It was something extra.

    Now, Apple has cut us out completely - with the exception of Logic Studio - every other Apple program that we sold has been officially moved to their online store. It won't be long until all of Apple's applications are digital. This will affect all third-part stores and campus stores.

    Now, this isn't a terrible thing altogether. There are pros and cons to moving to digital distribution which I won't bother to debate here. Brick and mortar stores obviously lose out as well. While I do not like that fact, that's not the entire point.

    The second, although most important victim of this shift to digital distribution, are the students. It is conceivable that Apple will have a digital education store, however the possibility of that is unlikely due to the main problem of discerning who exactly is a student without physical proof.

    For example the retail price of iWork was $79. On the digital store it is now $19.99 for each of the three apps totalling $60. Good if you want just one application or another, but still more expensive than the entire suite for students that sold for $39.

    iLife '11 retail was $79. Now only iMovie, iPhoto, and Garageband are available in the app store for $14.99 each. $45 gets you 3 of the original 5 applications they used to offer students for $29 (while it's possible Apple could release iDVD and iWeb, they did not update the products from iLife '09 to '11, so it's more likely that they have gone by the wayside).

    Final Cut Studio was $999 ($1,299?) retail. $299 for students! It came with Final Cut Pro, Motion, Color, Soundtrack Pro, Compressor, and DVD Studio Pro. Now you can get Final Cut Pro by itself for $299 on the app store. Motion and Compressor are separate for $49.99. More than any other application by Apple, several campuses have Final Cut courses. The coursework will have to shift or the students will just end up paying more (as will the departments that purchase volume licenses, since no educator store has arrived yet either). Apple has reinstated the previous version for volume licenses, but that won't last forever.

    Departments will also lose out if they do update to the newest version of Final Cut. It's not cost effective or necessary to switch from tape based cameras many have that they provide to students free of charge. Either they will continue using old software at a possible detriment to students' education with the latest and future versions of FC, or the courses could potentially be canceled because it won't be cost effective to upgrade all of the hardware and software they use.

    Aperture used to be ($199), is available on the app store for $79.99, and was available to students for $69.

    Logic Studio is just an update away from being replaced and split up as well. All of Apple's software will inevitably follow suit, many possibly already have, but this is my argument for why students will only lose out in the end of this transition.

    The same goes for the OS (Lion). While it is the same price Snow Leopard sold for at $29.99, no Apple related store will carry it while Apple itself is the only one that profits from it.

    And that pretty much sums up the "main" applications that many education stores sold that will now longer be available at a discount for students. Not only have several state school's (especially in California) tuitions gone up more than 20%, many who own Macs will also have to spend that little xtra bit to own popular Apple software. All while Microsoft and Adobe continue to offer physical copies, sometimes at 80% off.

    While many people will rely on the Apples App Store for their software, when people are going through school not relying or expecting your software, they're not going to miss it or want it when they get older and have the purchasing power to make their own decisions.


    This is only my opinion on the subject. I am not a writer so there are probably mistakes everywhere that I didn't catch. I am not angry at Apple. I am just disappointed with them moving so quickly from one side of distribuition to the other without any natural transition (as far their computer software goes. I know they've had the App Store for the iOS for a while).

    While I am an employee at a campus store, I am not a student (I actually can't afford to go to school, but that's a different story altogether).


    Update between where I originally posted this and me posting it here at MacRumors: Apple no longer carries the MacBook. The sub-$1000 notebook essentially aimed at students. They may offer it for educators only, but we don't know yet if it will be for actual campus stores, or only the institutions itself.
  2. Rodimus Prime macrumors G4

    Rodimus Prime

    Oct 9, 2006
    Apple does not care about either group. Look at the student discounts have been reduced time and time again to what is piss poor by any standards.

    Apple also clearly does not make agreements with schools to give away the software like MS does. Apple stop carrying about everyone else a long time ago.
  3. Darth.Titan macrumors 68030


    Oct 31, 2007
    Austin, TX
    As far as the software prices as a result of digital distribution, here is what I see by your numbers:

    Students suffer slight price increases while everyone else sees massive discounts.

    The students don't really lose that much. You see, eventually they'll not be students anymore. The software prices, however, will stay low. It will all even out.
  4. madog, Jul 20, 2011
    Last edited: Jul 20, 2011

    madog thread starter macrumors 65816


    Nov 25, 2004
    Korova Milkbar

    Absolutely. However, other than the three iWork apps, regular customers are paying less and getting less. The incentive for third-parties to to even suggest Apple software will be completely gone. Third party resellers that still make up a majority of "Apple" stores worldwide.

    That's not even getting into the fact that a major market, the US, has ever rising broadband costs with fewer options and ever dropping data caps.

    It may be forgotten in the long run, but to save students $10 or even $20 on something is a huge deal that adds up after getting ripped off by books and now the states and school system in general.

    Just today I've had to turn away about a dozen parents and students looking for Apple software. Just anecdotal evidence for sure, but several just didn't like the idea of not having a disk or having to pay that little bit from what we had originally offered.

    While digital distribution has it's benefits, I personally don't see it as the best solution overall. But whether I like it or not, Apple traditionally follows the "my way or the high way" method.

    A report a saw not too long ago also stated that students make up an extremely large percentage of their sales overall (hard to find it on my mobile right now) which may now cease buying several Apple programs when the alternative is readily available to anyone with the money (and not reliant on broadband).
  5. mrsir2009 macrumors 604


    Sep 17, 2009
    Melbourne, Australia
    Here in New Zealand we don't have Apple Stores, only authorized resellers. But now that I can easily buy stuff through the online Apple Store from the comfort of my own home and get it shipped free from Sydney and have it on my doorstep in 3-5 days it doesn't make sense to use resellers.
  6. interrobang macrumors 6502

    May 25, 2011
    Digital distribution is great; I hated the old analog software distribution.

    Those DVD releases were always hissing and popping and full of static.
  7. roadbloc macrumors G3


    Aug 24, 2009
    I couldn't give two ***** about students. Re-sellers however, especially smaller computer software stores, are going to loose out, which is unfortunate.

    I guess no-one is stopping them selling iTunes Gift Cards though.
  8. G4er? macrumors 6502a

    Jan 6, 2009
    Temple, TX
    Lots of textbooks come with CDs or DVDs. Either tutorials or trial software. The tutorials are good for reference even years later. Oops. Well, not anymore if you on a budget and buy a Mini. A slightly bigger case and having only one object to keep, move around, etc is better than having eternal stuff attached to it.
  9. *LTD* macrumors G4


    Feb 5, 2009
    The downside to Ford producing an automobile:

    Horse breeders and buggy manufacturers lose.
  10. rdowns macrumors Penryn


    Jul 11, 2003
  11. Liquorpuki macrumors 68020


    Jun 18, 2009
    City of Angels
    I don't think many students need to own Garageband, Aperture, FCP or Logic for school in the first place. I never took any class in college that required me to learn a DAW or use pro-level video editing software.

    Matlab, CAD programs, programming suites, Photoshop - all the sw that's actually used by students will still be carried by brick and mortars. Apple's race to the bottom pricing and 30% distribution cut will ensure it.
  12. benzslrpee macrumors 6502


    Jan 1, 2007
    student discounts happen when software companies can sign substantial contracts with universities... case in point, Microsoft. the savings students get when buying Win7 Ultimate or Office 2010 Enterprise is recouped through reoccurring licensing fees that universities pay, service support and software support.

    that being said, i really can't think of any Apple software that would be crucial for any student to graduate successfully. as a result, most universities will only have small amounts (if any) dedicated Apple machines which results in almost negligible cash flow from licensing fees to offset students discounts.

    caring about students really has nothing to do with it. Microsoft and Adobe all have varying pricing agreements dependent on the level of contracts in place. for example, students at UT Austin (50k student body) are able to get Win7 for $20 i believe, while students at UT Dallas (14k student body) pay $40.


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