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.
Apple Dealers Biting Back Mac Sellers
About The Author
Eugenia Loli
Ex-programmer, ex-editor in chief at OSNews.com, now a visual artist/filmmaker.
Follow me on Twitter @EugeniaLoli
But he shouldve seen the writing on the wall long ago and knew hed get alot of competition eventually. It’s a shame his company is going to go out of business.
What is it with Apple?
Why are they always acting like this?
They alienate their sellers, their developers, their customers (.MAC for example) and must wonder why people have had enough of it all. A company in their position should be working with sellers, with developers, and with customers for a better future. They need all the friends they can get if they are going to survive.
It is this sort of attitude that made me leave the Apple camp late last year. They just annoyed me one time too many.
Well, they may just have annoyed the wrong person.
Jamie.
http://www.desktopbsd.org/
I just switched to a PC running WinXP, BeOS, and Linux.
I had been using an iBook. I prefer the choice of hardware
especially since I built my own PC system.
It just seems that Apple is shoot itself in the foot by
alienating its dealers. Eventually the channel will dry
up and Apple will be left with two sources of revenue:
1) Apple Stores/ Apple Online
2) Further milking the ‘faithful’ with new fees and prices
on previously ‘free’ apps.
No regrets going to a PC here!
Sean
I live in Utah Valley and last week I noticed that the lagging Mad Mac finally closed its doors. I remember visiting them about 8 months ago when I was considering switching to the Mac. They had on display (and in stock) one G4 PowerMac and on iBook. They had no other computers available and they had no special deals or promotions. If I wanted something it would take just as long for them to get it as it would for me to order it off of Apple.com
Contrast that with on-line Mac outfit Smalldog.com who just opened a retail store and had quite a grand reception with hundreds of people on their openning day. Some Mac retailers are doing just fine.
Apple has a problem. You have crusty old shops like Mad Mac who give apple a bad name. Even Radio Shack is cooler than those retailers. On the other had you have very savvy retailers like Smalldog that compliment Apple’s current direction and benefit greatly. Macs are harder to sell these days, but some companies know how to do it.
Now, a search for -Macadam Apple- on Google shows a story of on Apple’s home page showing iMacs being sold at a retail event. There is no visible on-line presence for Macadam of San Fransisco. Facts are that many sales of personal computers of all brands have moved on-line. Macadam is not set to take advantage of those. I would suspect that there are some people that walk by Macadam every day on their way to work that still choose to order from Apple.com, Samlldog.com, or Mac Mall.
So, if Macadam wants to accuse Apple of “unfair competition” they better be ready to fill the void on-line and in the store-front market. Apple isn’t in the retail business because resellers were doing their job. Apple is there because “if you want something done right, do it yourself”.
I don’t know about Macadam, but I do know that Apple has put restrictions on what its retailers can sell online. There are only a handful of resellers who are authorized to sell Apple hardware on the internet, and the price controls that Apple requires are strict. You can buy a new Powerbook for $1799 from Apple and $1794 from resellers. Many of them are offering free upgrades as a way to skirt the restrictions.
Apple does need to honor its contracts with its resellers, as we all do, but I don’t think that it has a moral obligation to make sure its retailers are financially okay. If Apple has decided that it does not need a channel of independent retailers, then it should go ahead and bypass them, within the law. Dell, for example, has weathered the storm of the bad IT economy largely because it has no middleman or inefficient distribution networks. I think Apple wants to go the same route, but it has the problem of the legacy middleman, and I think it’s trying to ease through its transition and anger as few people as possible.
It’s inevitable that some resellers will feel like they’re getting screwed, and if they are, I hope they win in court, get millions of dollars, and can retire to Florida in style. Meanwhile, Apple will try to re-fashion itself in the Dell mold.
Too true. Contrary to Apple’s “switch” propaganda, more people are leaving the Mac than ever before. I’m one of them.
I always prefered System-# to whatever version of Windows was out at that time. But last January, when I needed a new desktop, I checked out OSX on a friend’s Mac and WinXP on another friend’s PC. I went with the PC & have been glad every time I turn it on.
Some of this was the OS, some was the price/features/speed factor, and some was just being sick enough of Apple’s games.
Apple is very sly in how they present themselves, but in too many ways a lot of their tactics are worse than Microsoft’s.
Is this akin to Prada opening Prada stores? Armani opening Armani stores? And now some small shops are complaining about the company stores? Are the people that run these little stores just plain stupid?
It gets dull seeing the mindshare and energy that is spent on the meaningless minutiae of Apple.
What I find more interesting is that Apple has a business model that allows them to take open source software, change it to meet their needs, and sell it for money.
Not that everyone is happy with this, as part of the fallout from Apple’s grab of the KDE HTML browser source shows:
Cheerleaders, please wake up and smell the coffee. The ONLY reasons this stuff came back is because Apple is required to do so under the GPL. Apple are the leeches of the open source movement. Any why not? It’s good business strategy. They must have some smart managers somewhere over at Apple, because I just can’t believe Steve Jobs could come up with this brilliant strategy.
–ms
“No regrets going to a PC here! ”
I’m still going to use a PC for playing games and stuff where configurable hardware is required, but I find my new mac fantastic.
I used linux for two years as my main os at work, and I have to say that osx is just what I was after.
I also find the anti-alias of text much easier on the eyes after long periods of time. Am I right in thinking that osx is currently the only os with text anti-alias?
Coming back to the point, I bought my mac from apple.com I could have gone to PcWorld or johnlewis, but just preferred the ease of ordering on the web.
I have worked for Apple Dealers doing sales and service over the last 15 or so years and know people who currently work for Apple Dealers doing sales and service and I don’t anybody that has had the “alleged” issues that Mr. Santos has had with Apple.
When I talked with Apple On-Line and folks at the Apple Company Stores, they didn’t care where I bought my Apple computer, just that I bought an Apple instead of a PC.
I think he’s full of crap.
Just my .02 cents…
I also find the anti-alias of text much easier on the eyes after long periods of time. Am I right in thinking that osx is currently the only os with text anti-alias?
Actually Win XP does the same with the Cleartype technology, it’s event better than pure anti-aliasing.
the retailers that Apple had were not doing the job that apple wanted.
I think it would do apple better though if they looked at a franchise type solution for this…offer the store owners a free of charge franchise cost if they upgrade to look lik ethe Apple store. if not then they can go out of business.
as far as the other comments….if you think that Win XP is more productive than OS X…I use Linux, XP, and OS X at home. I much prefer the user experience of OS X than that of XP…Linux is just fun to hack. I have used Windows since win 95 and not until my brother gave me his G4 tower when he went into the marines did I use OS X. it is MUCH better than Windows (though it does have its problems tha Eugenia has been so kind to point out).
… in this order:
1) Move to the US, and subsequently….
2) Sue somebody’s arse for real
– Not. I probably would go crazy in the everyday madness….
Actually Win XP does the same with the Cleartype technology, it’s event better than pure anti-aliasing.
I personally see no difference on CRT’s and in fact apple’s implementation feels slightly better to me. But once you get to LCD, win xp blows os x away (Does Os X sub-pixel anti-alias). It may just be my powerbooks subpar screen though :-P.
“Actually Win XP does the same with the Cleartype technology, it’s event better than pure anti-aliasing”
I’ve never used XP (win2K is my current win os), but a friend of mine has XP. The text doesn’t look that good (same as win2k), but maybe cleartype doesn’t work in 800×600 🙂
Companies that have multiple channels of distribution will always have this kind of conflict. Mind, I’m not saying that Apple is even remotely inncocent (nor am I saying they’re guilty).
Simply that several companies have these kinds of problems. The biggest problem for Mac retailers is that they simply can’t run over to some other supplier to sell their goods.
Apple, by necessity, will need to clean these relationships up. If a lawsuit is the only way to get this stuff straightened out then so be it.
With Apple languishing in market share, it is even more difficult for them to get new dealers which is one of the main impetus’s behind starting their own stores, as it is important for them to maintain a store shelf presence rather than going simply mail order.
The local Mac store in Louisville charges 120.00 dollars for a 60 gig hard drive. That does NOT include installation.
The same hard drive is available in the other local stores for 70-80 dollars. Online prices are even better.
I hate to generalise, but I think many of the stores are similar, only because they have to make up for the low profit margins on Apple computers.
Are you kidding?
Last I checked, Apple did not create the GPL. The fact that they OPTIONALLY elected to use the GPL and therefore contribute open source does not undermine the integrity of the GPL. If Apple didn’t want to give back to the community, they would have elected to bypass the GPL altogether, but they didn’t. Geez, you just can win with some people…
For your information, you won’t see much difference with the default settings. But you can change it, it’s not that trivial, it’s a “hidden” feature, you have to dig to change the settings. If I rember correctly there’s even a page on M$ web site that will do this for you.
Yes the LCD output is much better than the CRT one. But you will defenitely see improvement in any configuration.
I cannot compare with MacOS X, since I’ve made any comparison for the anti-alias text, but since the Quartz engine use any hardware 3D card on MacOS X, you can guess that it can use all the power of the card and have better output.
All I’ll say is this… when I walked into Di-No (Pasadena, CA) and then an Apple Store (Colorado Blvd (Pasadena, CA)), I suddenly realized the new LCD iMac was NOT the stupid, idiotic looking “desk lamp” computer I thought it was in magazine pictures… it was downright… AWESOME!
And, as for my experience with MacOS X 10.2… it *does* like more RAM. Give it 256-384Mb of RAM and it responds much nicer on an eMac. I gave Safari a run, too… nice!
Overall, however, my only gripe so far with MacOS X 10.2 is the fact that everytime you go to get a detailed profile of your system (from within “About this Mac”)… it checks EVERYTHING! EVERY TIME! Why? What is likely to have changed since the last time you checked less than 30 seconds ago (I tried this to see if it would)?
Any idea why it’s so primitive? Can’t it just check the initial information of the hardware (HD model name, memory amount/type, etc.) and see when it was last run to determine if it has to do a full out DEEEEEP search for all the system info? Or is it the file/data information that takes so long to dig up?
Eh… whatever. Haven’t got the money for a Mac these days anyways. But when I do… WATCH OUT! I’m buying one!
“We’ve seen a failure rate of around 60 percent,”
I hope he has well-documented this. Or else he will be on the receiving end of a huge libel case. If they are that crappy, he should be ashamed of himself for continuing to peddle them to unsuspecing consumers!
re: sfotw
“only because they have to make up for the low profit margins on Apple computers.”
I though Macs had a *higher* profit margin?
In case anyone forgot, you have to prove your claims. Allegations are just that, allegations. Until a jury finds apple liable, there is nothing to really talk about. It’s all conjecture and speculation. If apple settles, well, that’s an admission they did wrong and they would be owning up to it.
by the way, to the guy who “switched” to a PC above. You are proving my theory. The people who really bash the mac are PC builders. You love to build PCs and then you can’t stand that means (1) running a generally inferior OS (dll hell, registry nonsense, cluttered and dopey lookinginterface) and (2) a less integrated system where innovation that takes hardware and software is actually more difficult on your chosen platform because one company doesn’t control the whole shebang.
Maybe Apple is making them pay for the macs they sell at near retail prices…
The problems with eMacs are pretty well known. Do a Google search. As for the comment about profit margins, Apple has a high profit margin on its machines. It doesn’t allow its resellers to make much of one.
It is true that independent Apple resellers are lucky if they net 10% on any Apple branded hardware or software…..while I’m sure Apple is enjoying great margins, it’s reseller’s are not…..If you factor in the time to sell, order, deliver and manage the sale, more often then not resellers lose $$ selling Apple hardware……
If retailers charged normal prices on products, and had decent customer service, they would be fine. They should blame themselves for piss poor service. Customer service is the most overlooked feature in a small chain business. If you want something done right…. do it yourself. Nice to go to a place and have sales people who know what they are talking about, ,product on the shelf, the computers WORKING, and no missing keys on the Powerbooks.
“The problems with eMacs are pretty well known.”
Then the retailer knowingly selling them doesn’t get any sympathy from me! Especially a small shop where personal trust should be one of their primary selling points.
-Bob
Especially a small shop where personal trust should be one of their primary selling points.
I totally agree.
While she’s not l00kin’ 🙂
“This is what I mean when a _company_ is behind the product.”
Hehe… Beep-beep! 😛 Vroommm…
The eMac raster shift problem has finally been traced to a single VID cable. So, getting them fixed should be a much easier and cheaper to fix.
For those who switched to Windows – well, there’s nothing wrong with that, I think XP Pro is fantastic. However, by the end of this year, I think you will be surprised at Apple’s situation at that time. I’m speculating, of course – I’m not trying to sound like Mr. Know It All. But, I believe this though, sincerely.
Perhaps Mr Santos’s allegations are true, but it is idealistic for anyone small business man to think he won’t have to compete with his supplier. I work for a small bookstore that sells predominately magazines; we have to compete with our suppliers constantly – how many subscriptions cards fall out of the typical magazine? Subscription offers are usually for less than what we pay for the magazines and they are not taxed in Ohio (yet). Also, we’re forced to compete against the hundreds of stores in Toledo that sell magazines (every grocery store, drug store, etc). Yet we still survive.
If Mr. Santos is correct, then I hope he recieves just compensation. If he is not, then I hope he grows up and realizes that making a living as a small business is not easy.
Quote:
“What is it with Apple?
Why are they always acting like this?
They alienate their sellers, their developers, their customers (.MAC for example) and must wonder why people have had enough of it all. A company in their position should be working with sellers, with developers, and with customers for a better future. They need all the friends they can get if they are going to survive.
It is this sort of attitude that made me leave the Apple camp late last year. They just annoyed me one time too many.”
Exactly. My iMac 400 is collecting dust in my closet now, and I’m enjoying a new Athlon XP 2100+ instead of a new G4 tower, thanks to the bull that apple has been pulling lately. I bought OS X, then X.1 so i could run all the newer apps being ported to X from classic, and i wasn’t willing to fork over another $220 CDN (total of ~660) for X.2 so I could run all the latest mac apps, because now nobody supports 10.1.
That, and the “oh, itools will be free for all mac users…oh, wait now we’ll charge for it” crap.
Heck, at least one thing MS does right – I don’t have to buy a new OS every 6 months. At least new apps still run on 2000 or ME.
To All The Whiners That Posted,
Shut the F*&K UP. Who NEEDS to hear it?
Want to buy cheesee crap, buy Windblows XP (except privacy) and a no-name x86 box.
It takes an exceptional amount of raw cerebral horsepower to begin to conceive of the HUGE benefits of all things Macintosh — you don’t have/get it, and never will.
Be a GOOD Dell-doobie and click as FAST as you can to their online store — operators are standing by for the lemmings.
if these independent mac retailers are getting shafted by apple’s policies, the cloners like powercomputing can be a supplier.
oops! steve jobs killed the cloners, and therefore, would-be michael dells to promote apple mac os x, and build-it-yourself-ers.
Every poorly percieved action surrounding Apple is like a hit with a double barreled shot gun. First, it turns people off the platform, and those that actually bother to complain about it are told by Apple’s fans to look somewhere else for their computing needs (largely in a less than pleasant manner). You Apple fan(atics) need to come up with a new way to respond to criticism. The current mode is doing a hell of a lot more harm than good.
Allow me to explain how this is meant to work.
For a long time, you could go to your local computer store and see what you see in the Apple Stores: lots of different models of computers lined up, along with gadgets and rows of software. This was, and is, good, as long as you run a version of DOS, Windows, or Windows NT.
As I understand it, no-one was willing to commit to doing the same for Apple products, which if they were even available at these stores, were relegated to a corner of the showroom with a small “postcard-holder” of software titles and one, perhaps two, models depicted. I’ve seen this first-hand. So, when Jobs came back to power, he decided that Apple should do something about this itself, since no-one else wanted to.
At least some generic computer suppliers, rather than being angered by this, were quite happy to wash their hands of selling Macs altogether, where an Apple Sotre popped up nearby. Apple itself has stated that these are aimed primarily at home users, multimedia hobbyists, and small business people, the same markets that the above suppliers are interested in.
Specialists work on solutions for education, multimedia, and scientific research customers, along with many other fields. Organisations working in these areas wouldn’t normally buy from Apple directly, but rather through a specialist supplier that just happens to supply Macs as part of their solutions.
In some cases, these specialists also relied on home users and small business people, to survive. Others relied on their locality to make them the number one, or only, game in town for Apple products. These are the suppliers that are most annoyed by the Apple Stores.
Now, I’ve heard enough stories from different specialists, and their end-customers (schools, studios, laboratories) to believe that there are genuine behind-the-scenes problems dealing with Apple as an OEM. Some suppliers want to deal with this in court. More power to them, and we’ll see what the court decides. If this case highlights these problems correctly, we can hope that Apple is as good at listening to its’ downstream supply chain as it has been in recent times with listening to its customers (with the big trend in reading feedback at Apple).