C5DavidRichards

David Richards

Wake up Apple

16 April 2001

Information Week Magazine

Submitted for Most Controversial category

Following the collapse of yet another Apple reseller – this time for an estimated 30 million dollars – one has to question seriously the viability of any business selling Apple products.

The Australian Apple reseller network is now in tatters, particularly in the eyes of the wider distributor community. During the past five years the failure list of Apple resellers has seemed endless: IC Technology for $20,000,000, Choice and AdType Solutions for $3,000,000. Then there was Contex, Mac Warehouse, MAC Zone and Random Access for an estimated $18,000,000. By now, Apple must be running out of favours with its credit risk insurance brokers as every few months they are being hit by yet another failure. But does Apple really care about this? It seems that all Apple wants to do is to push Apple boxes through a reseller network without any regard for the viability of each business or the business track record of the principal running the business. The real victims in this are not Apple but the distributors who have extended credit to the Apple reseller network. This insanity has to stop. What is clear is that the Apple management team have a mandate for supporting failed resellers as they get back into business by extending credit and granting them licences to sell and market Apple products. If Apple won’t stop this practice the distributor community has to do it for Apple by refusing the resellers credit. In addition, other vendors who are selling direct to Apple resellers with questionable track records have got to support the distributors by also cutting off credit. Right now, administrators to the failed Buzzle group are working with Apple and the directors of Buzzle to de-merge the companies that initially grouped together to form the Buzzle group. The plans, according to directors and past directors of the group, are based around each company which was involved in forming the consortium to being allowed back into business with a clean slate within weeks. This has to be seriously questioned. I make this comment excepting Buzzle director Robert Kloster and his business. Kloster was formerly managing director of Design Wyse before that company was re-branded as a Buzzle outlet. I have known Robert for a long time. He is an excellent businessman whose Melbourne-based company business was not only profitable but had an excellent reputation in the marketplace. This cannot be said of organisations like Choice Connections Australia. It is time Apple faced up to the fact that it is a minority brand. Apple has limited market share and while it is true that its range of products appeals to design and video production professionals it is simply not making it in the enterprise market. Only last year, Cable & Wireless Optus announced plans to dump its use of the Apple brand internally. C&W Optus chose to convert 4500 Mac terminals into Citrix thin client clones running on a Windows NT network. In addition, Optus has had little success selling the Apple brand through its retail outlets. What Apple has to do is go back to distributing its consumer small business products through department store chains such as Harvey Norman. At the same time the company should push all of its professional business through a small group of highly viable resellers. That is, resellers who are also selling Windows 2000 workstations and servers which they will continue to sell alongside the Apple products. It should be borne in mind that 92 percent of all Web development work is being done on Windows NT and 2000 workstations. Not Apple systems.

Apple has to go back to pushing small business products through chains such as Harvey Norman and professional products through viable resellers

David Richards

Editorial Director

Penton Media

(02) 9928 1218

dwr@penton.com.au