Editorial: Sour Apples

It is puzzling that Apple can be so good at making and marketing IT products, and so bad at guiding them smoothly through the distribution channel.

Apple is, by the admission of its own distributors, “the best kept secret in the world”. The vendor produces hardware and software just as any other company does, but somehow manages to fool consumers (and admittedly, the journalists here at ARN), into thinking IT is sexy. (I would argue that the words “IT” and “sexy” should never be seen anywhere near each other). Sexy or not, it has a lot of trouble getting those products on the shelves.

If you are an Apple dealer today, let me give you a warning. I am not sure if Apple has told you or not, but it wants you to re-invent yourself. During the hundred and one million phone calls we, at ARN, have made on your behalf in the last few months, we overwhelmingly got the feeling that you are going to have a tough 2004.

For a start, Apple does not want to talk to the press. We can’t quite work out at what point down the chain its representatives are being gagged, but it is fast becoming irrelevant. Apple will not discuss the changes being made to its distribution strategy because, it claims, it is better for dealers to hear about it months down the track when (hopefully) the strategy and systems are right.

A more likely scenario is that they are being gagged because in order to fix up the mess Apple has created for itself, the company is going to need to hurt somebody.

The hiring of NCR to conduct services on Apple’s behalf is one example. Apple’s move into department stores is another. Apple’s loyal dealers are going to have a lot more competition — not just competing for customers, but also competing for the opportunity to actually get their hands on product in an efficient and timely manner.

Apple is in a tight spot. Its traditional dealer base wants it to continue to serve their needs, to resist selling direct online or opening up direct stores (as they have done in the US and Japan), to resist the lucrative mass merchant market, to resist introducing too much competition. On the other side of the fence are the opportunities to expand the vendor’s business. A spokes­person for one of Apple’s distributors said the vendor was currently “too protectionist over who can sell the products”. He is hoping that in 2004, Apple will be more flexible and faster in its response to market movements.

Can you solve Apple’s conundrum? How do you protect the businesses that have stayed loyal and helped to build brand and reputation for quality, without limiting your opportunities for expansion? Drop me a line here:

On a much brighter note, all of us at ARN wish you a merry Christmas and happy new year. We thank you for your support in 2003 and look forward to providing you with more news and vital information in 2004.

Next year already promises to be a a big one. We are delighted to announce that Brian Corrigan has been appointed Editor — please join us in congratulating him at