MacSense revenue doubles off upgrades success

MacSense revenue doubles off upgrades success

Specialist Apple distributor, MacSense, has seen its revenue double off the back of recent third-party upgrade hardware sales. The result flies in the face of the vendor's decision to drop the channel-focused business in favour of its own branded products.

MacSense managing director, John Khoo, said Mac RAM and hard-drive upgrades now accounted for some 50 per cent of its total sales. The distributor took up the business after Apple Australia announced it would cease supporting third-party upgrade services in November.

At the time, its channel manager, Kevin McElduff, said it no longer made sense to run the upgrades business in parallel to its own direct Configure-to-Order (CTO) offering.

But Khoo said his sales showed there was a strong case for maintaining third-party product.

"RAM alone in November and January equalled the whole of our normal business," he said. "In December it was three and a half times our normal business."

The distributor was now looking to appoint a dedicated product manager to grow upgrade sales and source new product, Khoo said.

"The upgrade business requires a dedicated person to manage it as those products are commoditised and prices are extremely volatile," he said. "For example, everyone dumped stock over the Christmas period, which sent prices down. Over Chinese New Year there was demand but no stock, which sent prices up."

But despite the massive contribution the upgrade business was making, Khoo said he would use the breathing space a product manager provided to grow the rest of MacSense away from Apple.

"The upgrades business is too reliant on the success of Apple in a given month, and it is not smart to rely on only one vendor," he said. "While Apple is having record sales growth the majority of that is based around iPods, not Macs. They are also offering their direct upgrades business to the channel which eats up my market."

Khoo said he was working to build out the company's digital convergence offering with products such as DVD jukeboxes. Its IT infrastructure business was also being expanded with new RAID systems and networked attached storage (NAS) products.

"One RAID system is the same margin as 1000 PCI cards or iPod cases," he said.

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