Won't somebody please think of the Apple resellers?

Won't somebody please think of the Apple resellers?

Summary: Another day and another Apple store opened in Sydney, but is Apple encroaching on reseller turf?


On Saturday, Apple opened its second Sydney CBD store in the Broadway Shopping Centre. It was all the usual happy-clapping freaky cult sort of stuff you've come to expect from Apple, but wouldn't look out of place at the Hillsong Church.

But leaving aside all the excitement of yet another Apple store opening, I'm slightly concerned about the fate of long-running Apple reseller Next Byte, which has operated just next to Broadway for as long as I can remember. Before Apple even had its first store in Australia, I took my first iPod back to Next Byte for repair and couldn't have been happier with the services the store offered.

How can a small Australian company that has been loyally reselling Apple products and services for 17 years ever hope to compete against the tech giant itself? Apple has the better location, the nicer store and the backing of pretty much the most successful company in the world right now.

Next Byte, by comparison, is much smaller, encompassing only 17 outlets across Australia at the moment, and doesn't have the market power or brand recognition that Apple automatically gets.

And it's not the first time Apple has opened up an outlet quite close to Next Byte. There was a Next Byte in Castle Towers in north-west Sydney, until Apple decided to open up its own store in 2010. From what I've been told, that Next Byte store lasted another three months before it closed down and some of the staff moved across to the new Apple store.

Calls to Next Byte's Sydney outlets were quickly passed onto the marketing department, who declined to comment on what they thought the impact of this new Apple store would be on their business, but it's believed that Next Byte is trying to differentiate itself from Apple's stores through its "premium" offerings, like experienced Apple technicians and the training courses it offers for Apple products.

Apple declined to comment, but I can imagine from Apple's perspective, more Apple stores in the one area might be a good thing, and customers might be inclined to check out Next Byte if they're already in the area to visit the Apple store.

Time will tell, but given that Apple seems to have a habit of targeting areas where Apple resellers have been successful for so many years, I have to ask, won't somebody please think of the resellers?

Topic: Apple


Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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  • Of course

    But, they are greedy and they wannt it all... They want to over charge and take all the profits too!
  • Yep, same old same old

    Dick Smith (ie Woolworths) shafted all it's loyal franchises and stockist about 5 years ago. Let not forget that in most cases we do this to our selves.
  • meh...

    old news...

    Incidentally, Apple stores don't give out discounts while resellers can. This is the same case with Bose.

    I don't think they even do price-matching.
  • Greedy Gluttons

    As a long time fan of Apple I have decided to kick them to the kerb and go Android or Microsoft. Reason being I've realized they are slowly but surely conning the masses with extremely overpriced hardware and finicky software agreements. Somehow they managed to hypnotize people, myself included to buy products that doesn't have half the features that the competitors already have. (We always got to wait for another year and another update to get the extra one feature that the competitors already included in their existing products) The iPhone 4 was the biggest scam, i'm quote sorry i fell for that. I still got problems trying to hold the phone, I need to have the cover on or else its the most uncomfortable device to hold. Contrary to popular belief, Apple's products DON'T JUST WORK. I'm finished with Apple
    • Yeap, impossible to compete with MS features

      when they're press releases.

      Enjoying the MS mobile and tablet experience;-)

      As for Apple I'm not sure why they would be moving against resellers that have provided very good service for a long time. Disappointing.
      Richard Flude
  • When Microsoft released thier own tablet,

    When Microsoft released their own tablet, some tech community members ranted Microsoft had set itself up against it OEM partners. I think Apple has done the same here.
    • It's just business

      Under US company law, the only job of Apple management is to provide the highest possible return to shareholders. They've apparently decided they can do that more effectively by competing against their partners and selling directly. That's just business, and Apple management are just doing their job.

      Microsoft's situation looks similar at first glance, but is actually rather different. First, Windows has been failing in the tablet market, so there's an obvious need for something different. Second, most of Microsoft's tablet partners already 'defected' when they started selling Android tablets. HP even withdrew their support from Windows 7 tablets and tried to sell webOS tablets instead. Not exactly a 'loyal' partner, but HP's (incompetent) management were just trying to maximise profit.
  • Apple is thinking about its resellers "we don't need you any more"

    It was already shafting retail stores by undersupplying them when new products were released, while ensuring their own stores were amply stocked.
  • Double-edged sword of being an Apple reseller...

    I had worked for Apple resellers from the late 90's to the middle of the '00's and have seen first hand the disparity with which resellers are treated. Apple has been slowly pursuing a disintermediation strategy with their resellers since about the time Steve Jobs returned to the helm. Just a timeline off the top of my head (many of these dates are approximate, so don't kill me if they're not exactly right):

    ~1998: Apple cancels its reseller educational programs. All educational Apple products must now be purchased directly from Apple, and can only be resold by educational institutions. (up until this point in time, Apple specialty resellers would typically supply school districts and could sell to students and teachers).

    Around this same time, Apple also started its "Store within a store" concept in CompUSA's, and started pulling advertising and support from "Specialty" (ie, Apple Only) resellers. This concept was a colossal failure.

    ~2000: Apple changes the AppleCare support plan rules so that AppleCare can only be sold as part of a registration package (prior to this, AppleCare could be sold by a reseller and just registered by their service bay - charging the reseller afterwards). This has the effect of resellers having to purchase contracts "up front" and reselling to customers. (to this day, I haven't seen any other company claim to be "out of stock" on an extended warranty).

    ~2004: The iPod Mini is released, and stock on these units is nowhere to be found. The only place customers could seem to buy one for a number of weeks is Apple's online store. Fancy that.

    Also worth noting - to this day, the only place you can get an iPod engraved is from Apple. Resellers can special-order these, but it can take weeks, whereas customers can get one from Apple online within a couple of days. There is also no return policy offered to resellers for engraved iPods.

    Other notable "Apple Only" things that have left resellers in a bind:
    1) Only one standard Mac Pro unit is available. Resellers can special-order upgraded models, but are offered no return nor price-protection privileges on these models. As a consequence, few resellers are able to stock anything other than the "base" Mac Pro model.
    2) Some Apple products have been available historically only through Apple (though admittedly, they've since been absorbed into other products). These include Mac OS X Server (when it was first released), WebObjects, Cinema Tools, and Shake.

    It has been no news to resellers that Apple doesn't view them as important as they once were. For many Apple specialty stores, they were "The" Apple store until Apple started opening their own stores, and are now facing the other side of that blade. And with resellers that "just happen to sell Macs" (like Best Buy, Future Shop, CompUSA, etc), they really shouldn't complain too much, because they always did a terrible job of selling Macs to begin with.
  • Tekserve seems to survive okay

    In the days of youre, they were the "only" Apple service center in Manhattan that anyone would go to. Despite the fact that Apple has been flooding the New York area with stores, their buisness has gone UP not down.

    Because these stores while technically they may be competing with Tekserve, are part of the reason there's a LOT more Apples to be serviced or sold.

    The reason is the same one that drives the success of the Apple stores... building the buyer community. Tekserve advertises in every issue of the Village Voice, puts it's presence in key community events like Pride marches. Instead of dreading Apple's presence, they've learned to embrace it and work it to their advantage.