Already reeling from a flat 1996, the Apple channel in Australia has been dealt another blow following major Apple reseller Choice Connections entering voluntary administration.
Choice elected to appoint a voluntary administrator when it was unable to meet its financial commitments to its creditors. Choice's number-one creditor was Apple Australia.
Although he concedes Choice is in a very precarious position, general manager Michael Smart says it would be a mistake to count the Melbourne based company out just yet. "Choice has been purchased by overseas investors and the influx of capital from these investors is making it possible for Choice to keep serving its customers." Smart would not disclose the name of the investment group, or where it is based, but told ARN they are represented in Australia by Donald Hartono and Stephen Ong.
Choice has closed its branches on the Gold Coast and in Adelaide, leaving it with operations in Sydney, Melbourne and Geelong. Some industry watchers theorise Choice's acquisition of Computerland in South Australia, combined with internal management difficulties, led to the company's financial problems. "I don't think anyone who's connected to the Mac market is surprised to see Choice go down, it's been coming for a while," said a Sydney-based Mac player who requested anonymity.
However, Smart is accentuating the positive. "There were a couple of ways we could've gone on this and the path we chose is the one that looks after our creditors, customers and staff the best. There were other alternatives, but we didn't like what they offered the people we've been doing business with," Smart said. "Because of the new owners, we can carry on and stay in business and, ultimately, that's the best thing for everyone concerned."
Apple Australia general manager Steve Rust says his company supports Choice and is heartened by the new investment. "Certainly, I think the commitment of the new investors is a validation of the potential of Choice and of the strength in the Apple market in Australia," Rust said.
How will the Apple channel be affected by Choice's predicament? "We haven't received any new applications for reseller status in Queensland or South Australia as a result of the changes at Choice and I don't expect we will," Rust said. "There may be some shifts within the channel, but I think from the customer's point of view very little will change." With the jury still out on Choice's prospects for the future, Apple's top resellers are Logical Solutions, IC Technologies and Harvey Norman.
Rust confirms Apple is "in discussions" with Harvey Norman's Tony Gattari about the possibility of locating specially-designated Apple Centres within selected Harvey Norman stores. "It's too early to say anything, but we're looking at ways Harvey Norman and Apple can work more closely together in promoting the Mac OS," Rust said.