Search: reseller

On the heels of Apple executives reporting the company sold 43 million iPhones during the last quarter, a Colorado entrepreneur is using homeless people and Apple’s stores to supply his iPhone reselling operation. A KUSA-TV report says the scheme was uncovered at the Cherry Creek (Denver) Apple store, and leaves the homeless and other down-and-outers holding monthly cellular contracts they can’t afford to pay. According to the report, the resellers drive the streets looking for people who might need quick cash, offer them a deal, and then drive them to an Apple store. Inside, the resellers provide cash for the recruits to purchase one or more iPhones tied to a cellular carrier. The recruits are told they can easily cancel the monthly cellular contracts, leaving them with no liability. In exchange for their help purchasing the iPhones, the recruits receive $100 or more. Only later do the recruits discover that they are on the hook for the monthly charges or contract cancellation charges. KUSA reporter Jeremy Jojola identified the resellers as two men from Beverly Hills (Calif.) operating a company that offers unlocked iPhones, and said they seemed to be working with one particular Cherry Creek store employee. However, Jojola didn’t speculate on whether that employee was part of the resellers’ scheme. Jojola did say the number of people he saw at the Cherry Creek store indicated to him that employees must have been aware of the resellers’ activities. Denver police have classified the situation as a civil matter and have declined to investigate the scheme Jojola uncovered. video

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Blessed by being Apple’s first reseller of personal computers in 1976, but cursed by the proximity of five of Apple’s own retail stores, FirstTech Computers (Minneapolis) is closing down by month’s end, the latest in a string of resellers who could not compete. As reported by TwinCities.com, 75 employees at two locations will lose their jobs on March 29th. Since their first delivery of Apple II computers, FirstTech prospered and had the retail market to itself. But in August 2001 Apple opened a retail store at the Mall of America. It was the chain’s 4th store and, not coincidentally, was located near then-Sr. VP Ron Johnson’s home town of Edina (which hosted its own store, Southdale, in 2002). Since then, four more Apple stores have opened in the region, including the Uptown store just five blocks away. Like other resellers in the United States, FirstTech felt the pressure from Apple’s stores. It was often difficult to obtain sufficient products, product manager Fred Evans told TwinCities. FirstTech tried to stay relevant by offering a wider range of services than Apple, including setting up Windows computers. But now, after 37 years, FirstTech will close and become part of Apple’s continuing retail legend.

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Even as Apple is reinforcing its image as a company trying to improve the human experience, Apple CEO Tim Cook has reportedly told retail store leaders he’s interested in more iPhone revenue, by taking sales away from resellers and bringing it to Apple’s own retail stores. As first reported by the 9to5Mac Web site, Cook’s remarks seem to contradict the company’s retail culture that focuses on excellent customer service and satisfaction, not profits. In fact, Apple’s last top retail executive, John Browett, was fired last October largely because he focused more on sales, market share and profits than customer service. But Cook’s three-hour talk to the retail team raises a bigger question about how the current number of stores and staffing levels will handle the millions of additional customers he wants to bring into the stores. read more…

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A series of drawings accompanying patents granted by Hong’s Kong’s Intellectual Property Department depicts a set of retail furniture that is likely being used by Apple authorized resellers in greater China. The designs are very basic, yet retain Apple’s traditional minimalism in order to emphasize the products instead of the fixtures. None of the designs is elegant enough to be used in Apple’s own retail stores. As first spotted by the Patently Apple of Web site, the patents cover the design of six configurations of furniture, and two variations of a plastic product stand. The patent applications were filed last March for a “display structure,” and cover the “pattern, ornament, shape, configuration of the article shown by solid lines in the representation.” Two patents are for a free-standing product display, both single-sided and double-sided. Two others don’t include the lower stand, and apparently are intended for wall mounting. Two additional patents cover counter-type furniture. The last two patents are for an acrylic display for individual products about the size of an iPhone or iPod. Design patents are typically filed once the design is already in use. In addition, most patents filed in Hong Kong are based on existing ones already filed in China, Europe or the UK. Therefore, it’s likely that Chinese authorized resellers are already using the furniture somewhere. Download (pdf) the patent drawings to see all the designs. drawing

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One of Apple’s most high-profile authorized resellers is moving from its epic location, directly across the alley from the Boylston Street (Boston) Apple store, and refocusing its operation only on business and professional customers. Tech Superpowers founder Michael Oh explains, “We’ve determined that we can compete with Apple, but we’ve just stopped wanting to.” Oh says that on May 1st the company will move five blocks away and give up the walk-in consumers they’ve handled since the company was founded in 1992. Oh says the relocation and change in business focus simply reflects a change in the Apple market itself, and is not the result of a knock-out punch by the Apple store. read more…

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The arrival of an Apple retail store in Halifax (Canada) has been inevitable in Chris Duffie’s mind for several years. He’s the owner of authorized reseller Halifax Mac Store, and has had the market pretty much to himself for a decade. So when rumors began swirling late last year that an Apple store was arriving at the Halifax Shopping Centre just three miles away, his decision to close down his retail business was an easy one. As reported by the Chronicle Herald newspaper yesterday, the Mac Store will close forever on April 13th, and Duffie will take his expertise over to Torusoft, a local consultant and systems integrator. Together, the companies will focus on service, support and consulting for the Apple community, a field that Apple stores generally doesn’t touch. A Mac Store sales manager will join Duffie’s at Torusoft, but seven other of his employees will be laid off, possibly picking up consulting gigs with Torusoft. Duffie’s decision has been mirrored by Apple resellers around the world. Some have transitioned their focus to service, but others have gone out of business entirely after an Apple store arrived.

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Just one month after Apple opened its first store in Valencia (Spain), a nearby authorized Apple reseller has laid off its staff and closed its doors, a victim of competition from the Apple store. Illa Digital is just four blocks from the Calle Colón Apple store, and opened four years ago as the city’s first Apple Premium Reseller, the highest level of certification for a reseller. Illa Digital was the only reseller serving the city center when the Apple store opened last December 3rd. According to ValenciaPlaza.com,, the store’s owner noticed revenue began to decline after the Apple store opened. Finally this week, the store’s owners laid off all four of the store’s employees and the store went dark. A second reseller, K-Tuin, has a store further north from city center, and for now is still in operation, the Web site notes. From the time the first Apple stores opened in 2001, Apple executives have claimed that business for resellers actually improves. Resellers have generally disputed that claim, but acknowledge that they must substantially adjust their customer focus in order to remain successful after an Apple store arrives in their customer region. map

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An authorized reseller in France has filed a lawsuit against Apple alleging unfair competition, mirroring complaints by United States resellers that Apple favors its own retail stores over resellers when it ships new products. As reported by Le Figaro (sub.), eBizcuss CEO François Prudent says his 16 locations in France suffered a 30 percent decline in business during the third quarter of 2011 after the supply of iPad 2 and MacBook Air laptops from Apple dried up. In the fourth quarter, his company could not obtain a supply of the iPhone 4s, Prudent said. He traced the product shortage began to November 2009 when the Carousel del Louvre Apple store opened in Paris, the country’s first. He said eBizcuss has upgraded its stores in response to Apple’s retail foray into France, spending $6.5 million on the stores. “Since 2007, we revamped our point-of-sale system at the request of Apple to meet Apple’s criteria.” Prudent alleges that Apple is soliciting his business customers directly, taking revenue away from the reseller. “The proposals submitted to Apple commercial enterprises are lower than prices at which we buy the equipment,” Prudent claims. Prudent says he’s a long-time Apple supporter, and was one of the first importers of the Apple ][ personal computer in 1977. U.S. lawsuit details

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Apple is interested in opening its own retail stores in Brazil, according to an executive of a local authorized reseller, but is being cautious over their brand exposure and market share in the country. Germano Grings, vice president of the company Herval, told the Web site G1 that Apple is “very strategic” about its retail stores, and acknowledged that retailing is “not very easy in our country.” Apple has no stores in South America, but does has an extensive network of Apple Premium Resellers, including 31 in Brazil. Herval plans to have 20 locations in the country selling Apple’s products by 2013, the largest reseller chain in the country. The stores will be duplicates of Apple’s own stores, and will be “more beautiful than theirs,” Grings said. “Customers who walk into one of our stores and an American store will not notice a difference in customer service, quality, technical service or inventory.” The company is not fearful of competition from Apple opening its own stores in high-profile locations within major cities, Grings said. “They will not open stores where we are,” he said, in smaller cities of Brazil. Grings said he’s joked to Apple executives that he would gladly help them open a store like Fifth Avenue (NYC) along Avenida Paulist in São Paulo. “How wonderful would it be?” he asked.

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Every since Apple opened its first retail stores in May 2001, the company has taken the position that its authorized resellers actually benefit from a nearby Apple store, instead of having business stolen away. The resellers are not convinced, and over the years have claimed a variety of illegal or unethical business practices by Apple: failure to reimburse resellers for warranty repairs they’ve performed for a customer, no supply of just-introduced products and failure to promptly supply current products.

The question has arisen—How much does the reseller segment contribute to Apple’s overall revenue—that group of small, usually individually-owned retailers in small towns across the U.S. and in other countries. I tend to believe that Apple’s authorized reseller network represents a relatively small percent of the company’s overall revenues. Unfortunately, Apple doesn’t report its revenues in a way that separates out the resellers, but rather by four geographic areas and the retail stores. Therefore, it’s impossible to know for sure. Nevertheless, there are some clues.

First, Apple doesn’t allow resellers to sell certain Apple products at all, including the iPhone. Also, some resellers are restricted from selling other products, such as the iPad, Apple TV and Mac Pro. For example, even the huge Best Buy chain does’n sell the full line of Apple products, such as the Mac Pro and Mac mini.

Second, even for products that Apple resellers are allowed to sell, it’s well known that Apple severely restricts the supply. In the months after a typical new product introduction, there is no product supply at all for resellers, and in the following months there is only an unpredictable trickle. This has been an on-going source of irritation for resellers, among other issues.

Thirdly, 68 percent of Apple’s total net sales in the first nine months of fiscal 2011 were derived from the iPhone, iPad and iTunes. The iPhone is not sold by authorized resellers (only available only at the Apple on-line store, Apple retail stores and certain cellular carriers). The iPad is sold only be certain resellers like Best Buy, and then only is very limited quantities. The iTunes store has no outside resellers at all.

Lastly, now that Apple has recently switched its method of software distribution to on-line downloads, resellers no longer have software as source of revenue, including OS X or iLife. Naturally, the resellers already were not participating in any revenue from Apple’s App Store for the iPhone.

Now, if you combine all this information, it becomes a little more clear how resellers are contributing.

Virtually none of Apple’s 68% of iPhone, iPad and iTunes sales come from resellers. That leaves no more than 32% of the total possible revenue available for resellers. If one was generous in guessing that resellers contribute 20 percent of that 32%, you’d end up with an overall 6.4 percent revenue contribution by resellers. A 10 percent share if more likely, putting the overall contribution of revenues at just 3.2 percent. If you subtract other Apple revenues from products resellers cannot sell (OS X, iOS 5, for example, which are not separately reported), the actual percentage is even lower.

To prove this low share, look at it from the other direction: If you believe that retailers are contributing 20% to Apple’s overall revenue, for example, that would mean resellers would be generating 62 percent of Apple’s non-iPhone/iPad/iTunes revenue. That’s just not reasonable.

Again, all this math refers to authorized resellers, which include the mon-and-pops, Costco, 7-Elevens that sell iPods, Target, etc. It doesn’t refer to cellular carriers who directly sell the iPhone, Best Buy and similar large resellers in other countries.

Hopefully this math is correct and all this makes sense. Let me know in the comments if you have other questions or feedback.

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A geeked-out Lexus will be the first thing visitors notice inside the Tech Superpowers retail store at Patriot Place (Mass.) mall on grand opening day, followed by a living room set to show off home automation gear and an office displaying high-tech furniture. “We’re trying to make it very different from an Apple store opening,” says company owner Michael Oh with some understatement. When the doors open July 2nd there will be musical guests, prizes and plenty of Apple products to purchase. The company has operated a consulting and pro Mac support operation for nearly 20 years from a tiny space across the back alley from the Boylston Street (Boston) Apple store. But last November they dabbled in general retail with a 1,000 square-foot pop-up store at Patriot Place. The success of that location confirmed Oh’s belief that the time is right to take partners and go big with a 3,300 square-foot showcase of gear from Apple, Savant Systems home automation gear, Turnstone furniture, Nuvision large-screen displays, Solais Lighting Inc. and tricked-out cars by Kaizen Tuning. store details

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The Marin Mac authorized reseller in San Rafael (N. Calif.) closed in May 2010, leaving an empty store and postings on their door. Some flyers were on the inside (vouched-for) and some on the outside (can’t vouch for them). As of April 2011 the space is still vacant and flyers are still posted on the glass.

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No one knows the hazards of being an Apple reseller near an Apple retail store better than Michael Oh—his Boston-based Tech Superpowers is just 75 feet across the alley behind the Boylston Street Apple store. Oh and his employees monitored the store’s 18-month construction during 2007, and wondered if revenue from their mainly-professional customers would be affected. Oh says that after the Apple store opened, his consumer and repair business declined for about 12 to 18 months. But then sales began to pick up. Now, business is better than ever, prompting Oh to take the next step—a pop-up retail store over the holiday season at Patriot Place shopping mall. And next April, Tech Superpowers will open a full-size store at the mall, hoping to serve a region without any Apple stores at all. read more

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Apple has filed trademark applications in Europe that focus on two diverse retail topics—the name of its reseller operation and the acrylic stand used to display iPads in the company’s retail stores. The applications were submitted to the European Union agency responsible for trademarks and designs, the Office of Harmonization in the Internal Market (OHIM) during September and October. The first application trademarks the phrase “Premium Reseller,” a designation created in 2006 to replace the existing Apple Center designation for companies selling Apple’s products. The terms of the new program were more stringent for resellers, but also added certain marketing initiatives and dealer support features. Premium Resellers are part of Apple’s channel programs, located in all 10 countries outside the U.S. where Apple has retail stores, along with many other countries as large as India and as small as Ecuador. The second trademark covers the design and appearance of the round acrylic stand used to properly display iPads within Apple’s stores. The application to OHIM credits a long list of people for the stand, including Jonathan Ive, who receives top credit for Apple’s hardware. The stand is generally circular, but has a slanted cross-section to angle the iPad for maximum visibility to passing customers. The stands first appeared last April with the iPad’s debut. Download (pdf) the two trademark applications. stand photo

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A new Authorized Apple Reseller in Florida seems to prove that the concept of independent stores is still viable, even with competition from Apple’s own retail stores. The OneClick store in the city of Doral west of Miami is 14 miles equidistant from three of Apple’s stores. It stuffs a lot of sales and service into a small space at the Windmill Gate Shopping Center, and features a very clean, black-and-white exterior that recalls the early Apple store design. Marketing director Jean Paul Ciaramella says the store sells the full line of Apple’s products, offers AppleCare and other repair services, and provides corporate computer solutions. Ciaramella says just one week after opening the store has a “constant flow” of visitors to the store. Visit their Web site. store look

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