Apple resellers are becoming increasingly disgruntled with the product expansion and aggressive pricing of the vendor’s online presence, Apple Store. While a level playing field exists for hardware – allowing resellers to take advantage of face-to-face contact with customers and value-added service levels behind the sale – channel partners are worried about discrepancies appearing in the pricing of some third-party software and peripherals.
Apple Store Eats Channel Business
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Eugenia Loli
Ex-programmer, ex-editor in chief at OSNews.com, now a visual artist/filmmaker.
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Is it any wonder if the retail channels suffer? Look at this quote:
“If people haven’t bought from us then we won’t offer support because we haven’t made any money out of it.”
So there are people coming into his store, offering alot of money to get his mac fixed, and he just says “fuck off, you didn’t buy that mac here”. That makes no sense at all to me..
Why doesn’t? Why would a third party retailer should fix your mac that you bought on another retailer? If your machine is under warranty, Apple is fixing it. If not, where is the money for that retailer?
I wouldn’t want to service for free Macs that people bought elsewhere either. It is extremely expensive to do.
Why doesn’t? Why would a third party retailer should fix your mac that you bought on another retailer? If your machine is under warranty, Apple is fixing it. If not, where is the money for that retailer?
Well, if it’s under warranty and they bought it at apple, people will contact apple anyway first.
The point here is when that mac is not under warranty. When people will pay money to get their mac fixed. Almost every single pc shop I know, will fix a computer, even if you bought it at another store. It’s how they make their profit. Selling computers only gets them a few procents, it’s the service that is the big moneymaker. The shop may give a discount to their regular customers, but they certainly don’t ever turn people down who want to spend money.
And if they give a good service, the next time the customer may consider to buy their stuff at that store.
I know it’s cool to bash Apple these days, but those Apple retail stores are just not as innocent as they seem in that article.
Apple stores have consistent problems with Apple undercutting them. This really isn’t anything new. Running an Apple store in this day and age is suicidal. You can’t be successful being reliant on a company that doesn’t support ressellers properly.
Also Apple’s claims of being a channel company are bull. Maybe at one point it was true, but not nowadays. My University has a reseller on campus. No Apple users I know have purchased there. It is just better to buy straight from Apple.
for their apple stores and give price breaks to current apple dealers.
Each time I walked into a shop selling Apple products, it feels like a trip on memory lane where replacement parts are as costly as brand new hardware was in the mid-80s.
Not so long ago, I saw a woman (who did not seem so computer savvy) being said that it’ll cost her about $500 to get her PowerBook (a G3) repaired so that OS X could run on it. Why not better buy a brand new one, huh?
Using Macintosh has become a scientology-like experience: it’ll make you feel very good about your (computing) life but you’ve got to have a lot of money.
Given the paucity of Mac repair shops, I don’t see how a customer can play the competition card to get a real deal or at least a basis for comparison. With Apple stores the situation becomes even worse: you end up asking Apple to repair your Mac while the unescapable incentive for Apple it to sell you a brand new one. When your market shrank over the years to something between 2 and 3%, selling new hardware is the rule for survival.
A few years ago, the only good solution I found for this dilemna (practicability vs. faith) was to relearn how to use a screw driver, go PC and do the repairs myself. I can replace whatever part of the computer with whatever brand product, including the motherboard. The internet (web & usenet) brings me the experience of other users in 99% of the cases faster and better than the technical staff of the local repair shop.
It might sound brutal, but I’m not pouring one little tear drop over the poor Mac retailers who feel the pressure from Apple. They should have known better. All along its history Apple has been consistent with only one thing: it cares about itself. Any third party, developer, software publisher, distributor, retailer who dealt with Apple knows that.
I wonder what apple will do when its market shrinks to less than 1%????
I wonder what apple will do when its market shrinks to less than 1%????
I wonder what Apple will do when its market grows to more than 95%?????
Atleast I know how ridiculous those two sentences above are..
Well that depends on what their cash flow and profit margins look like, now doesn’t it?
This stupid market share BS ya’ll keep whining about only displays your real ignorance about how business works. If a product is PROFITABLE, produces enough CASH FLOW to justify it’s existance, it will continue to be offered.
– Kelson
How do you propose Apple will continue to offer Macs after even more 3rd party application support has left the platform?
Marketshare is important in the computer industry because developers can make or break a platform. Without the marketshare, applications can NOT be profitable and developers will leave.
>> If a product is PROFITABLE, produces enough CASH FLOW to justify it’s existance, it will continue to be offered
>>
True, but, you know, if your market share keeps dwindling, like Apple’s has been doing for a while now, you will eventually get to that point where your product is no longer profitable because of production costs. PCs are getting cheaper everyday, and a dwindling market share does not help you to lower price per production unit. That’s what I was wondering about.
> This stupid market share BS ya’ll keep
> whining about only displays your
> real ignorance
If you are saying that Apple’s market share is NOT dwindling, I would like to know the source of your own BS.
Marketshare is important in the computer industry because developers can make or break a platform. Without the marketshare, applications can NOT be profitable and developers will leave.
Read the post you are replying to again. Marketshare is not that important, it’s important if you can make a profit.
A big market share does not necessarily mean big profits. (look at all the failed windows platform developer companies)
A small market share does not necessarily mean no profits. Look at OmniGroup, that makes mac-only products, or look at Crossover that makes linux-only products.
Obviously the “without the marketshare applications can not be profitable” is plain wrong.
“Naysayers have been calling for Apple’s demise for years. But Apple not only has survived but thrived, it seems, at least partially by the sheer force of Jobs’ will and his ability to maintain the ferocious loyalty of Apple’s users, who still account for 10% of the world’s computer users, while its sales usually account for about 3% to 5% of the world global PC market.”
http://www.forbes.com/2003/06/02/cx_ah_0602jobs.html
IE: Apple does not have 2-3% marketshare as is often quoted… but approximately 10%.
Everybodu on OS News often misunderstands marketshare and sales.
IE: Apple does not have 2-3% marketshare as is often quoted… but approximately 10%.
and you’re getting this information where?
A big market share does not necessarily mean big profits. (look at all the failed windows platform developer companies)
A small market share does not necessarily mean no profits. Look at OmniGroup, that makes mac-only products, or look at Crossover that makes linux-only products.
I would note that every year is a struggle for CrossOver. They are surviving, and soon they will be growing too. But not right now. They can only grow as the market grows. If the Windows-On-Linux market were to shrink too far, they would die. It wasn’t even thinkable a few years ago – the market was too small, the technology too immature.
Obviously the “without the marketshare applications can not be profitable” is plain wrong.
No it’s not. If you have no marketshare, your expenses are by definition greater than your costs. If nobody uses Macs, OmniGroup will shrivel up and die. It’s not complicated.
Marketshare is important in the computer industry because developers can make or break a platform.
Marketshare is important also because if it is too low, you are irrelevant. Linux suffered this for years.
“>>IE: Apple does not have 2-3% marketshare as is often quoted… but approximately 10%.
and you’re getting this information where?”
http://www.forbes.com/2003/06/02/cx_ah_0602jobs.html
So there are people coming into his store, offering alot of money to get his mac fixed, and he just says “fuck off, you didn’t buy that mac here”. That makes no sense at all to me..
I’m not sure how Apple conducts its warranty repairs, but you’d think if they authorize resellers to perform the job then they’d have a job book listing various tasks and the amount of money for doing each. And the dealer would make money on warranty parts replaced too. At least, that’s how the automotive industry does it, and dealers are happy to do warranty work because it’s profitable.
For anything out of warranty, if the dealers are turning away customers wanting stuff fixed who are willing to pay for it, then they’re just plain cutting their own throats.
they have nice articles.
“…stupid…ignorance…whining…BS…”
Please, can we have a normal discussion and avoid the “there is only God and it’s mine” stuff each time someone dares speaking “as it is” about Apple.
As a former user of 128K, Lisa-MacXL, 512K, MonsterMac, IIcx, Q840AV, 9500, G3 I guess I’m entitled to say that I’m not totally ignorant when I want to express an opinion about Apple.
I’m surprised by the reaction about the market share side of my post, because it was only a small part, at least in my mind, when I wrote it. While this thread talks about Mac retailers feeling the pinch about the current distribution strategy from Apple, I just wanted to express my opinion as a user, customer as well as a software developer who had business relations with Apple during the 80s and 90s.
While not being a fan of Steve Jobs, I do admire the guy for what he has done and what he’s trying to do. The current Apple ordeal is the consequence of what happened during the 90s. Remember Taligent and all the similar crazy stuff? Many years were lost then. Meanwhile Microsoft catched up in the ‘ease of use’ war. You can be pro-something, anti-something, whatever, but today, the difference between Windows XP and OS X in terms of ease of use is so minimal that you read all those reviews and opinion-makers prose selling Windows or selling MacOS X with some amusement.
To which you must add the unavoidable $ question: where is the Enterprise strategy from Apple? Why should corporate America throws its PCs through the windows and replace them with brand new Macs running MacOS X (Server)? I find it rather difficult to answer that question. FreeBSD or Linux on those PCs will provide the same services as well if not better than MacOS X Server, for less. Which Java App server can I run on my MacOS X server? JBoss? OK. WebSphere? BEA? For the desktop, Windows XP is not that bad (it’s good in fact) once you overcame the few weeks of “total loss” after switching from MacOS.
MacOS X is a good start, but it’s not sufficient today to reproduce the same innovative momentum that Macintosh produced in 1984. While Apple did not know what to do after MacOS, AppleTalk, Laserwriter (just to a name a few) the world has moved on and the offerings from Windows and Unix-like OSes are today extremely attractive.
As a small business I need: usable desktop stations plus file, mail, database, dns, web, proxy and so on services. Windows XP provides me with the former, Linux and FreeBSD give me all the services I could dream of. With that kind of user baggage, the offering from MacOS X is rather a mixed bag. So mixed that I can’t imagine why I would spend a few thousand bucks into brand new Apple hardware, the only platform on which I can run it.
As a geek: I simply think that MacOS X is still too young an OS with too much updates trying to fix many things with still too many potential for kernel panics. Documentation of the OS X guts is still embryonic in comparison to the other Unices. In terms of performance, put Darwin on a PC, measure it, then put Linux or FreeBSD on the same PC, measure them, then you can make an educated decision. MacOS X is user friendly, but it’s not the only one. MacOS X is not totally geek friendly: for instance, each time you want to install an OSS package you wonder if you’re going to bump into OS X specifics that break not so well written compilation scripts.
As a video amateur editor: P4 + 533 FSB + RAID IDE + low-cost capture, editing, encoding, DVD authoring software for multiple vendors does what I want. OK, the box is ugly beige, but I don’t care. I don’t care about the ridiculous Altivec ads either!
As an educated buyer: boy, that’s too bad this Windows 2003 Server costs so much because it really flies with IIS6 beating Linux/Apache on the speed track course.
As a security-conscious user: Windows is insecure! Yes, as insecure as all the Unix servers you can see running on the net with no firewall and (probably unused) portmap, sendmail, x11… ports offered as invitation to bored kiddie scripts users.
I might go back to MacOS in the future, I’m flexible. But Apple will have to come with something really innovative to convince me. Maybe in 2004? Twenty years after the introduction of that thing for the “rest of us”? I just hope that Apple will understand that this “rest of us” is quite antiquated and the competition did integrate it for quite some time.
Meanwhile the Apple retailers can feel the pinch, that’s their problem.
“where is the Enterprise strategy from Apple?”
From what i gather, Apple will be announcing it with the introduction of Next gen hardware.
“Why should corporate America throws its PCs through the windows and replace them with brand new Macs running MacOS X (Server)?”
The primary reasons why our company did it was Microsoft’s licensing issues, support costs, insecurities and the more widely-held view amongst our staff that the Mac’s UI was superior.
“MacOS X is a good start, but it’s not sufficient today to reproduce the same innovative momentum that Macintosh produced in 1984.”
Perhaps not, but as long as Apple produces a superior product and Microsoft continues to force customers into distrusting them, its a strategy which almost guarantees growth.
“While Apple did not know what to do after MacOS, AppleTalk, Laserwriter (just to a name a few)
Asside from being out of touch for a short while during the scully amelio years, Apple has been a guiding force for several high-profile technologies. The brush you’re painting with is far too broad.
“As a small business I need: usable desktop stations”
Apple’s there…
“plus file, mail, database, dns, web, proxy and so on services.”
there too.
“Windows XP provides me with the former, Linux and FreeBSD give me all the services I could dream of. With that kind of user baggage, the offering from MacOS X is rather a mixed bag.”
Apple provides a mixed bag? Mixed from one vendor? Considering the fact that the solutions you mentioned were from, well, a “mixed bag” i find it funny that you say that.
“So mixed that I can’t imagine why I would spend a few thousand bucks into brand new Apple hardware, the only platform on which I can run it.”
Why would you say that? Mac hardware can run nearly as many operating systems as x86 hardware. Is this the ignorance where your argument is stemming from?
“As a geek: I simply think that MacOS X is still too young an OS with too much updates trying to fix many things with still too many potential for kernel panics.”
I’ve only had 2 kernel panics since running OS X, both of which were from OSX’s first release.
As a self proclaimed geek you’re sevearly misinformed. OS X has a heritage far older than what you know in OS X.
“Documentation of the OS X guts is still embryonic in comparison to the other Unices.”
OS X’s guts are open source and have an extremely large amount of documentation about them. You’re just spreading FUD
“In terms of performance, put Darwin on a PC, measure it, then put Linux or FreeBSD on the same PC, measure them, then you can make an educated decision.”
I’ve made such a comparison and found them to be nearly idential in performance.
“MacOS X is not totally geek friendly: for instance, each time you want to install an OSS package you wonder if you’re going to bump into OS X specifics that break not so well written compilation scripts.”
I’ve never experienced such problems nor have I heard of many others experiencing such problems. With using Apple X11 software, you virtually guarantee that such problems are non existant.
“As a video amateur editor: P4 + 533 FSB + RAID IDE + low-cost capture, editing, encoding, DVD authoring software for multiple vendors does what I want. OK, the box is ugly beige, but I don’t care. I don’t care about the ridiculous Altivec ads either!”
You would be better served with Apples superior video/DVD software and have a more attractive box.
“hat’s too bad this Windows 2003 Server costs so much because it really flies with IIS6 beating Linux/Apache on the speed track course.”
huh?
[i]”As a security-conscious user: Windows is insecure! Yes, as insecure as all the Unix servers you can see running on the net with no firewall and (probably unused) portmap, sendmail, x11… ports offered as invitation to bored kiddie scripts users.
Thankfully thats far more of a rarity than insecure Windows installations throughout the world.
“I might go back to MacOS in the future, I’m flexible. But Apple will have to come with something really innovative to convince me.”
Apple has been producing innovating products all allong. The probably isn’t Apple supposed lack of innovative products but your blindness.
“Maybe in 2004?”
Maybe on the 23rd of this month.
“Twenty years after the introduction of that thing for the “rest of us”? I just hope that Apple will understand that this “rest of us” is quite antiquated and the competition did integrate it for quite some time.”
They may have tried and tried but never quite got it. Oh well, maybe in 2006 when Longhorn and pauldium comes…. or maybe not.
Nice troll…
better luck next time.
As a former Windows user and after 143 days uptime on my G4 iMac 1Ghz, I have to say … money well worth spent. I bought it from a reseller. Why? Because I could see the goods before I bought them. Online stores are great for DVD’s, CD’s etc but a computer? Would you buy your next car from an online store without even test driving it? At least with a reseller I get that human touch that tells me everything is going to be OK. And do you know … he was right … 1 hour later my whole home network was Mac’d !!!!!
Love ’em or hate ’em, it’s a personal thing.
I’m sorry, osnews, I love you guys to death, i frequent your page almost daily, but this is just a lame story. I think you just wanted the blue apple to appear so that people start to get hyped up over wwdc. People love to talk about apple, but is it your intention to hook people in by tempting them with the ability to give their opinion about how they hate apple because they can’t afford it or the apple hardcore people that retort, or do you want to offer nice articles where everyone can learn something? I’ll cut you some slack since 99% of your stuff is ok. But please, as a huge fan of your site and osnews loyalist, do change your attitudes.
I said once that it would be best for Apple to simply get rid of the reseller program and sell direct so that they can cut their expenses and thus lower prices.
In Australia there are very few Apple stores and most simply buy directly from Apple. Why would one stuff around with a reseller when you can get it direct?
“In Australia there are very few Apple stores and most simply buy directly from Apple. Why would one stuff around with a reseller when you can get it direct?”
In Australia there are no Apple retailers outside major cities.There are only about 50 mainstream Apple retailers in Australia (the size of the US). In some areas there are no Apple retailers within 500 Km. Having a little problem with the eMac – just courier it 500km ($100+ fee) and wait a few weeks for it to be sent back.
pick the guy with the vested interest in apple.
I fear PAULDIUM too…not half as much as PETERDIUM tho.
Further on Apple in Australia:
Not only are there a lack of stores, most of the stores that do exist are quite small, and a number of the much vaunted consumer services (iPhoto prints/albums, Sherlock channels) simply aren’t available. Prices on Macs here are more than can be accounted for in currency differences, overhead on imports/delivery/stocking etc., and a reasonable profit margin for Apple Australia. And to top it off, Apple has a lingering bad reputation with many people involved in IT areas, even given the positive attitudes overseas with things like the XServe.
Despite all this, if Apple can make a resurgeance elsewhere, it can make one here. Or perhaps, Apple should try here first?
I wonder what Apple will do when its market grows to more than 95%?????
Runs for their lives, the DOJ would be hounding them down. They can run… cause they can’t hide. Either that or allow the DOJ to split Apple into two or more companies.
Ai caramba, I rather have 1%.
Although if I had to choose, i would much rather have Apple at 95% than Microsoft at 95%.
IE: Apple does not have 2-3% marketshare as is often quoted… but approximately 10%.
Everybodu on OS News often misunderstands marketshare and sales.
Marketshare is sales. Installed base (which you mention in your subject line) is something different.
Apple does have 2-3% marketshare (which IS sales figures). Apple seems to think they have 10% of the consumer market. Their installed base could be somewhat higher.
I hardly believe any Apple info on hear because, 1) Generally people who complain about Apple or OS X never have used it or own a current mac. That is obvious by the unintelligent comments they make. 2)Because they don’t use a mac they are speaking from hear-say and not factual or first hand use. So basically 90% of the people commenting on here are non-mac users or used a graphical-windows styled Mac(way back when) when Microsoft was still using dos.
Happy Fathers day
Okay, so Apple has 10% installed base. Unfortunately, the problem is that too many people mis-interpret installed base for market share.
This problem has been working to Apple’s disadvantage for quite some time. What will be most interesting will be when Apple releases next generation hardware and pent up demand is fulfilled.
If market share is based solely on the previous quarter’s sales and how the translate to the competition, then we factor in the PC industry is major slump, then we factor in the Mac installed base’s huge pent up demand then the Mac’s market share will EASILY move into double digits in as little as 6-12 months.
But then, I would expect the PC using populace to suddenly adopt market share to mean installed base.
You can’t visit a popular technology-oriented discussion board these days without hearing the oft-misconceived phrase, “Apple has 5% of the market and Windows has 95%.
There are two things wrong with this statement, the first being the idea that because Apple has five, Windows must have the other 95. We as users of alternative operating systems know this not to be the case. Of course, a considerable number of desktop PCs do not bear the Windows logo.
The second problem is the implication that “?market share?” can be used interchangeably with the word, “installed base.” When most people use the word “?market share?”, or course, what they really mean is “installed-base.”
For example, Apple’s Macintosh “installed-base” is approximately 10 to 12 percent of the computing industry, a figure that’s roughly similar to that of Linux based PCs.
When these figures are coupled with the remaining alternative operating systems on the market, Windows installed-base works out to be somewhere in the way of 80 percent — a far cry from the 95 figure that is often touted.
So how does “?market share?” play into the picture you ask?
?market share? is determined by quarterly or annual sales figures. The problem with ?market share? statistics is that it implies that all computers retain the same level of usability over time. It assumes that once a computer is sold, it will retain its productivity status for as long as its parts continue to function.
Unfortunately, usability statistics and replacement purchasing habits of consumers vary significantly between platforms thus causing the ?market share? figure to look skewed.
Linux users (for example) are known to keep aging computer hardware useful long after it was left for dead by its former Windows using owner. The open source community consistently manages to squeeze every last ounce of processing power from even the most aged hardware available.
Similarly, Mac users are known to keep their computers as primary productivity tools until the gears fall off. This is really a testament to the quality that Apple incorporated into its hardware and software over the years.
Unfortunately, the incorporation of quality into these platform’s coding efforts will only fuel the notion that they are far less popular as what they are as long as ?market share? is the most commonly used gauge to determine platform popularity.
Because the Linux operating system’s distribution model isn’t tied directly to sales, it will never get a truly accurate gauge as long as “?market share?” is touted over installed base.
Apple on the other hand, may be in a better situation.
As we all know, the troubled economy has caused desktop PC purchases to fall to an all time low. The fact may actually work to Apple’s advantage.
Everything Apple has been working toward pivots on the release of OS X running on next generation hardware.
Apple is scheduled to release next generation professional hardware in the coming weeks. The release of this hardware, when coupled with Apple’s Panther operating system starts the completion of Steve Jobs’ rebuilding of Apple.
It’s this combination, which the computer using populace has been waiting for, many of which have said that they’ve been holding back their computer purchases for the Apple’s proverbial sun moon and stars to be in perfect alignment.
This windfall will occur when PC sales are extremely low which means that as long as the semi-misleading ?market share? statistic continues to be touted; Apple’s percentage is likely to jump from its current 3 percent status to a double-digit figure, (probably somewhere in the 12 percent range) in only a few months.
If the technology spinmeisters try to turn the table and tout installed-base (as they should have all along), Apple’s current 12 percent status is covered there too.