The news that Apple is going to switch to Intel processors shook up the computing world. Many users and developers were eager to publish their opinions on the switch. However, one group of people were totally neglected during all this: resellers. Today, we feature an interview with Wim Schermer, first Dutchman to own a Mac (in 1984), and co-founder of one of the biggest Apple retail stores in The Netherlands, MacSupport. We discuss the switch to Intel, and much more.
1. First, tell us a bit about yourself and your company.
Wim: MacSupport was founded by Niels de Vos and me, Wim Schermer, in 1988. Before that, I was already busy with Apple and Mac. Together with Chriet Titulaer (Ed. note: don’t worry if you don’t know Chriet Titulaer, you must be Dutch to understand) I was the first to own a Mac in The Netherlands, in January 1984. That was the 128k Mac, which was expanded later to a Fat Mac, 512k, and again later to a Mac+, 1024k. But anyway, we started at Ganzerek 5, Castricum (in a bedroom and attic), but we soon after moved to Anna Pauwlona Street 14, where we got our first real office building. We started there with only two people, and we moved to our current location in December 1995, with 11 employees. And in September, when we open our store-in-store shop in De Bijenkorf, Amsterdam, we’ll have a total of 50 employees, spread over three shops (one in Uitgeest, and two in Amsterdam). The new department in De Bijenkorf is very attractive for us, as De Bijenkorf has 6 million visitors a year.
The Switch to Intel
2. What do you personally think about the switch? Can you understand Steve Jobs’ reasoning?
Wim: I think that it’s the only correct decision. Apple promised us that by the end of last year, we’d be at 3 Ghz. We’re now at 2.7 Ghz, and that inhibits Apple in its development towards the most modern computers with the speed that Apple wants, and that especially counts in the mobile segment. The PowerBook G4 is a great machine, but you know, it should be a G5. And, they won’t be able to make a G5 PowerBook, because it produces too much heat, and so Apple decided to bet on Intel because Intel can get the same speeds with about 5 to 7 times less the amount of heat. Then you’ve got access to greater performance, which you cannot get with the PowerPC. And Apple has always kept the possibility open by also working on a Intel version of OS X. It also makes the switch for current PC users easier, because Apple will not mangle the Intel processors that much that it won’t be able to run PC/x86 software. So all in all, I find this a clever move.
3. Has Apple already informed you about the upcoming changes?
Wim: No. We know as much as the normal audience does. We know that somewhere in May and June next year, the first machines supplied with Intel processors will be made available. And, we think that the first machine will be a PowerBook, because we’re most hell-bent to see that first.
4. Do you have a dev-transition kit here?
Wim: No, we don’t.
5. For a long time you have told your customers that PPC was better, and now you have to sell Intel. Do you think it’s going to be hard to sell the new Intel Macs?
Wim: I can assure you: the public doesn’t care one bit. They come for a Mac, for the machine, they come for the wonderful software, stability, but they do not come for the processor. They don’t care; as long as it runs, and preferably as fast as possible. But what type of processor? The customer doesn’t care.
6. Apple has stated that they will not stop people from running Windows on the new Intel Macs. Is there a chance that you, as an Apple reseller, might sell Windows and MS Office for Windows in the future?
Wim: Look, we already sell Office for the Mac. We’ve been selling Office for the Mac from our first day! Word and Excel were first introduced on the Mac, and not on Windows. As long as Apple can stimulate developers to write real Mac software, we of course won’t say “Hey, Macs have the possibility to run Windows, so go buy Office for Windows.” That’s not necessary, because we have Office:Mac. But, I admit, there are applications which a Mac user also sometimes needs, for instance a badly written website that requires Internet Explorer, or things written specifically for Windows. In that case, it’s quite handy to be able to boot into Windows without the need for emulation. And for switchers this is extremely handy; they buy a Mac, and have the beautiful machine, the stability. But, if they still decide they want to go back to Windows, they can, very easily.
7. Do you already notice any changes in buying behaviour? People postponing their Mac purchase until the new Intel Macs arrive?
Wim: No, not at all. I can imagine that somewhere next year, March, April, May, we might see this. There are a lot of people who just want to browse, they want to maintain a photo database; there are companies that just need an extra workplace; they’re not going to just wait. So, we’re really not afraid of this. We went through more transitions, like from 68k to PowerPC, and that didn’t give us this effect either. Also, bear in mind that a lot of customers want to be on the safe side; and they know for sure that the current systems work perfectly. And what the new systems will bring? Well, it will go okay, but, especially within companies, certainty is crucial. Companies won’t postpone their purchases. Only the real tech-freaks might postpone; but hey, then they’ll buy it two months later. No big deal. Whatever valley we might experience in purchases, will be countered by a spike a little later.
8. You already answered this question for 50%, but do you expect any problems to arise when trying to sell the stock of PPC Macs once the Intel Macs have arrived?
Wim: No, that won’t be a problem. Apple knows exactly what we and other resellers have in stock. Therefor, Apple knows exactly when the PPC Macs get sold out, and when to phase in the new Intel Macs. Apple checks our weekly status reports, they see which machines are getting sold out, and they say: “Here are our new machines.” On top of that, if we do have too much PPC machines left, we’ll offer them with discount pricing, and we’ll get rid of them easily. Also, Apple has no interest in leaving its biggest partners with large numbers of machines, because then those partners won’t buy Apple’s new machines.
9. MacSupport also sells second-hand Macs. Do you expect a larger supply in that market, due to people selling their old Macs in favor of the new Intel Macs? Will that larger supply lead to lower prices?
Wim: Across the line, prices have been going down for years. In the early days, we sold the IIfx for 20 000 Guilders (9 075 Euro / 11 000 US Dollars). Same for the IIci, and the IIcx for 15 000 Guilders (6 800 Euro / 8 200 US Dollars). The prices have dropped quite a bit since then. When someone buys a new computer for 1 500 Euros (1 800 US Dollars), and after three years they get 200 Euros (240 US Dollars) for it, they really don’t care. But, it does mean that someone else can get a usable machine for only 300 Euros (360 US Dollars).
Of course the pricing of our occasions is directly linked to the prices of new Macs. For instance, when the Mac Mini came, we had to drop prices on all the PowerMac G4 machines we had with about 200 Euros, because the Mini had the same speed, at 500 Euros (600 US Dollars).
10. About the Mini, does it sell well?
Wim: Yes. Well, it could have been a little bit better, but we still are satisfied about it. But, you know, the thing is, from a marketing point of view, customers come here knowing they can buy a Mac for 500 Euros, but when they’re here, they also see the beautiful iMac G5. So it’s of course also a marketing trick to get people to the store for a Mac Mini, and let them go home with an iMac G5. We obviously don’t want to discourage that. [chuckles]
11. A lot of people complain that Macs are too expensive (something that I disagree with). Do you expect any changes in pricing of the new Intel Macs?
Wim: No, I don’t think so. The cost-price per processor won’t rise, and Apple has only one mission: make sure they sell as many machines as possible. So they must be crazy if they were to use this opportunity to raise the prices. We also don’t expect any lower prices; only in the long term, but that’s because prices of computers have been going down for years. And if for instance Dell lowers their prices even more, Apple cannot stray too much. Apple is better, prettier, more reliable, but in the end it’s up to the customer. And if that customer is satisfied with a Windows computer for 800 Euro (970 US Dollars), and the price is his selling point, then he won’t buy a pretty iMac G5 for 1 500 Euro. So it’s in Apple’s own interest to keep prices as low as possible. The price/quality ratio must be similar to the rest of the market, and I think Apple is doing that quite well.
12. Apple has already seen two major transitions in its past. From 68k to PowerPC in 1993, and from OS9 to OS X in 2000/2001. Will the coming transition be easier or harder than those two?
Wim: I think it’s going to be easier. Why? Because Apple has been working on this for 5 years, so Apple has worked this change into its software for 5 years. So if Apple rolls out the new Macs next year, they’ll already have 6 years of experience with this. Everybody already knows that developers have ported their applications to Intel with a minor investment in time and thus a minor investment in money, so I’ll think the transition will be quite smooth.
Apple Stores and the iPod Halo Effect
13. You guys have been an Apple reseller for 17 years. How do you feel about Apple taking retail upon themselves with the Apple Stores? Do you expect any (un)fair competition when they open up stores in The Netherlands?
Wim: That’s of course a sensitive subject. [chuckles] Let me put it this way: if Apple plays fair with its dealers, then we barely have to compete with each other. But, it all depends on that fair play. There were occasions in America where Apple opened a retail store in a place where there also were successful dealers. And then Apple got critique on how they supplied their own stores in comparison to the independent dealers. And I think that that critique is founded.
Apple must play that game fair. If the game is played fair, and Apple supplies all stores equally, especially with new machines, then independant dealers can easily exist. The market is big enough. Look at Amsterdam. First there was only one small shop, now there are three bigger ones, and they all put food on the table.
14. I personally don’t expect this to happen, but do you think that the Apple Stores will try to compete on price?
Wim: No, Apple Stores don’t compete on price. However, sometimes we do think that Apple is pricing its accessories too low. But for the rest, prices are all equal, and you can’t compete on prices, because it will kill you. Again, if Apple plays it fair, then we can both earn a decent living. But, if they don’t, then we’ll have a new situation.
15. A lot of people are debating about wether or not the iPod Halo effect exists. Do you notice this effect on the shop floor?
Wim: Oh yes, definitely! Look at the American market, how the market share is rising over there. We also see this in our shops.
16. But do you see this Halo effect in your shops?
Wim: Of course! How else can we grow each year for about 40 to 50 percent? We can’t do that if the market isn’t growing. There however is a shift from the smaller dealers to the bigger ones, but the growth percentages we’ve been showing for years– in ten years time, we’ve become 7 times as big– that can’t be just us. We see a lot of Windows people who are fed up with viruses, trojans, spyware. And for those people, Apple is a healthy alternative.
Linux on the Mac
17. Linux is rising in popularity lately. Do you guys ever receive questions about Linux?
Wim: No, no. Not at all. Linux is a very good system, but let’s be honest, it’s a UNIX variant. And if you know that the base of OS X is FreeBSD, then there really aren’t many arguments left to also have Linux on your Mac. Of course, Linux is a good and especially compact system, there’s nothing wrong with it. But, there aren’t many good applications for the Linux desktop. You can’t really do anything with it as an individual or small company. For servers, yes, it’s very good for that. But that’s just a relatively small part of the market. And it’s also on solid ground in the scientific area. But the largest piece of the pie is the desktop segment; companies, individuals. Linux is on the rise, but mostly on servers.
18. The next question is an extension to the previous one, but have you ever considered selling for instance Yellow Dog Linux?
Wim: No, never. Linux doesn’t really add any possibilities. Tiger also has a decent webserver (we ourselves use Apache), but for the average Mac user, Linux doesn’t really add anything. If we run a server application on an Xserve, that’s pretty good too, you know! We are quite satisfied with that. You know, when you get an email at night telling you that one of the system fans is running too fast. [chuckles]
That was it! Thanks for taking the time to talk to us!
Wim: I’m glad to!
A few words
Again, a lot of thanks to Wim for taking the time to talk to us, and I wish MacSupport a lot of success in both Uitgeest and Amsterdam.
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A good interview, very detailed, one question though… why drop prices of all G4’s because a Mac Mini was was the same CPU speed? Mac Mini has flaws such as its HD which is a 5400RPM Drive and in some cases it is a 4800RPM drive, also it has a very slow FSB by modern standards, it is the slowest FSB of all the G4’s (haven’t checked the iBook’s FSB mind).