Regional distributors bite into Philippine Apple sales

Regional distributors bite into Philippine Apple sales

Despite the interest generated by Apple's new products in the local market, Apple Philippines is not too happy with the way regional distributors are biting into its profit margins.

"Like most multinational companies, country budgets are largely dependent on country income," said Liza Ressureccion, Apple Philippine's country manager. "Therefore, when a reseller makes a conscious decision to buy from outside the country, what this does is contribute to the budget allocation of that country, whether it's in advertising, marketing and sales support, or in other areas like technical and educational support."

Apple's local distributors are also becoming concerned, and some even say they might lose 60 per cent to 70 per cent of their business to regional distributors.

"Though Apple's sales here in general have increased in the last few weeks, this is not as high as the way it should be for us," said Mario Ongpin, general manager of Distributed Processing Systems (DPSI), one of Apple's Philippine distributors.

Apple's Ressureccion said one of the reasons some resellers opt to work with regional distributors is the lower prices offered by these distributors.

"Because of the sheer volume that is being traded by the regional distributors, they are able to take advantage of volume discounts," said Ressureccion. "If our local resellers will continue to buy from abroad, how will our in-country distributors ever reach the volume that our foreign distributors make?"

Ressureccion said that one way the local distributors can improve on this situation is to educate their resellers as to how this could affect the Philippine business structure. "They have to understand that with every business decision we make, we either help build or destroy the industry we're in," said Ressureccion.

Jane Gonzales, vice president for marketing at American Technologies (ATI), another Apple distributor, agreed with Ressureccion, saying that dealers and end-users should be made aware of the disadvantages of buying from outside the country, particularly with Apple's recently revised worldwide warranty clause.

"Apple distributors will require service fees from end-users that purchase their Macs outside the country, unless it's a mobile unit," Gonzales said. She added that in its case, ATI has even introduced a reseller program with the help of Apple's local office to encourage dealers to buy from them.

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