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Express Online wins Apple deal

Express Online has been given distribution rights to the entire portfolio of Apple products. While the news is a cause for celebration for the online wholesaler, it has stirred the pot as far as the vendor's other channel partners are concerned.

But it is a big tick for the distributor's recently appointed general manager, Alison McQuarrie.

"We are absolutely thrilled," she said. "We are carrying the complete range from iPods to PowerMacs and right up to storage units together with all the software and accessories.

"It's a significant stamp of approval for us to win a vendor of Apple's calibre and it confirms we are a major force. Our resellers will be excited - we did a survey last year that asked which vendor they would most like to see us add to our line-up and the number one response was Apple."

Geoff Hill moves from a pre-sales role with Express Data to become Apple product manager for Express Online.

McQuarrie predicted complementary vendor relationships like Adobe, Macromedia, Belkin and Lacie would be a major differentiator for her company.

"We know we were up against other distributors [for this contract] and these relationships must have been a significant motivator to appoint us," she said.

Express Online joins KH Distribution, IT Wholesale and Apple's direct resellers in vying for Mac dollars.

ITW general manager, Darryl Tucker, said Apple had notified him of its decision to add another distie about a month ago.

"They have got some stock issues at the moment so it's difficult to justify adding another distie," he said. "But it needs good distributors because it isn't very good at holding stock and that's where we come into the picture. Another strong distributor might assist Apple and us." Tucker said the SMB market was ITW's main forte.

Apple had informed him Express Online had been recruited to boost its regional presence. There would be enough room for everybody to make a dollar, he said, as long as all parties competed fairly.

"We don't come across Express Online that much but people I have spoken to tell me they are pretty good at what they do," he said. "Having more people marketing the products helps sales as long as everybody has a sound philosophy about making money."

Over at KH Distribution, which has been distributing Apple for a decade and bases its business on the vendor, the mood is one of concern.

"I'm obviously not happy about it," managing director, Keith Rice, said. "They [Express Online] are pretty heavy discounters according to our research and that puts pressure on our model because we are the only distributor that provides technical and after-sales support.

"You just can't support a model like that and discount at the same time so we are apprehensive."

Rice said the possibility of another distributor being added had first been flagged to him about three months ago.

"They [Apple] opened the meeting by praising the growth of our business and then told us they were considering putting on another distie," he said.

"I found it difficult to reconcile these statements ... but we are the largest Apple distributor and maybe they feel threatened that we could pick up sticks and do something else."

Since ITW was appointed about three years ago, Rice said the two companies had learned to live with each other.

"ITW is much broader than us, is very focused on the PC market and has customers that we wouldn't normally reach," he said. "Customers tend to jump back and forth between us depending on whether they need support or not. Express Online is supposed to bring better reach into regional areas.

"We have had enormous support from Apple over the years but it's all verbal and based on personality so we have no guarantee that will continue."

Rice said KH Distribution was looking to expand its vendor base and had recently been granted exclusive rights to the Bose SoundDock. Discussions were also underway with other vendors, he said.

Apple Centre Taylor Square director, Ben Morgan, said he was not surprised to hear of Express Online's appointment because Apple had recently been in detailed discussions with Ingram Micro.

These had collapsed, he claimed, because Ingram baulked at Apple's no return policy.

But expecting another distribution appointment had not softened the blow.

"It never ceases to amaze me that Apple can continue to add distributors and resellers when it can't supply its existing channel," he said. "But I suppose another distributor means more orders and more profit.

"Maybe it will enable Apple Australia to place bigger orders and boost supply for everybody. It could also allow it to throttle back on reseller credit and pass that risk on to distribution partners."

Apple had failed to respond to requests for comment at the time of going to press.