DMG4449@RITVAX.BITNET ("Daniel M. Greenberg") (03/12/89)
An interesting little article about our friends at Apple and the vendor
channel. You may or may not find this interesting and I'll let you
draw your own conclusions...
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Apple's plans turning dealers sour
Computer & Software News Vol. 7 No. 10, March 6, 1989
A vendor's best-laid plans can often backfire and raise the old channel
conflict problem.
Apple's efforts to plant a heavy foot in the corporate market, for
instance, caused a considerable amount of bruising in the dealer channel.
The vendor installed its Earned Investment Program to address the needs of
its dealer base. Although the plan took effect for some dealers last fall,
the company created more problems by dropping rebates and raising prices.
What's more, Apple's 1988 activities taken together caused severe channel
conflict, which still has not been addressed.
Hard times among Apple resellers were seen in its first fiscal quarter 1989
which ended Dec. 30. Apple's sales were up 35 percent with $1.4 billion in
sales. But its sales through computer stores were down by 15 percent for
the same period.
Most observers attributed the shift in sales to the lack of a rebate
program during the period, as well as to price hikes. Apple acknowledged
its own short-sightedness and in January, the vendor lowered prices on many
of its products adn reinstated a rebate program.
Also durning 1988, Apple expanded its direct sales force by 200 and has
focused its attention on accumulating business in the corporate market.
That caused some resellers to scale their own efforts to sell APple
products.
In response to Apple's recent efforts, Donald Wolf of Wolf Computer in Los
Gatos, Calif., has turned more toward selling Hewlett-Packard computers.
According to the independend reseller, H-P operates a program similar to
that of AT&T in which sales teams are compensated for directing business to
a dealer.
"Apple has concentrated its efforts to dispalce IBM neglecting everything
but its direct sales force," Wolf said. "The infrastructure [of the Earned
Investment Program] helps us sell into the small business market, but it
doesn not help us with the $1 million to $2 million per month category."
WHile Wolf works consistently with H-P salespeople, he has yet to find any
similar cooperation with Apple. "Our customers tell us they're out there,"
he said of the Apple sales force. "We've never seen one."
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