Apple resellers hit out against repair centre plans

Apple resellers hit out against repair centre plans

Apple Australia has initiated plans for a new national repair service to run independent to its reseller network. The decision has been perceived by many of its partners as further proof of the vendor's disregard for its channel.

With the exception of iPod accessories, Apple end-users are currently serviced by a network of authorised repair centres. Last week, the vendor called for expressions of interest from companies willing to set up a national network of service centres to screen and repair its products. These would operate separate to - and in potential competition with - its existing service partners.

With Apple Australia refusing to comment on its plans, speculation was rife over motivation for the competing repair business.

Next Byte managing director, Adam Steinhardt, said the surprise announcement was further evidence that Apple was going direct.

"I hate the way they continue to chop up the business," he said. "They have weakened the dealer channel almost to the point of collapse." Apple Centre Taylor Square managing director, Ben Morgan, said the move was a lost opportunity for the channel.

"I don't know why Apple could not have looked toward their existing channel," he said. "This could have been a great opportunity to bring their resellers closer together with its mass merchants."

Resellers also questioned whether Apple would allow the channel to continue providing services, and if so, whether they would retain financial compensation from the vendor for their work.

"Whether or not Apple is making a decision to pull the service business out of the channel I can't say, but there seems to be some writing on the wall," Morgan said. "If you own a services business you need to be reading between the lines."

Despite being confident that the channel's repair business would stay intact, Steinhardt said the new national service could lead to long-term financial loss.

"It is not that great a blow as the warranty rate resellers are paid has not been increased in 10 years," he said. "But resellers could lose out with customers coming into stores less often. This will mean fewer opportunities to maintain relationships and to sell."

Morgan said service was a vital part of every reseller's business.

"For a reasonably sized reseller 30 per cent of your business should be service," he said. "Only 10 per cent may be warranty, but break and fix services for out of warranty stock and opportunities in configuration should be worth 20 per cent on top of that."

The results for specialist Apple distributors such as MacSense were also in question, its managing director, John Khoo, said.

"This could reduce the [Apple] channel as less repair business will be going through resellers," he said. "However, Apple carries only what is current, so the new repair company may do the same. There could be an opportunity for third party manufacturers and distributors to supply out of date or unique parts."

In light of this, MacSense would be amongst the first companies to approach the new repair company to provide parts, such as RAM modules, Khoo said.

Results for customers could also be mixed, he said.

"The repair organisation's core business will be service, so the upside is potentially better service for end users," he said.

Regardless of fears about the new repair entity, Apple resellers were mostly optimistic on the channel's role in the long-term.

"Apple customers are very loyal, but they expect a lot for free, and we give it to them," Steinhardt said. "Divorcing that situation from a company who just provides service may not work."

Khoo said resellers also had an advantage in being able to choose to charge for a particular service, thereby gaining customer loyalty.

"A service company, however, has to charge as it's their core business," he said.

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