Retail Tells Investors Apple Bites
From the New York Post.
"RETAIL TELLS INVESTORS APPLE BITES
By TOM ANDERSON
April 25, 2004 -- Rebel Apple Computer, which cast itself as the foe of Big Brother in its famous "1984" ad spot during Super Bowl XVIII, has become the oppressor, say some Apple dealers.
Two retailers pleaded their case directly to shareholders at Apple's annual meeting last week in Cupertino, Calif.
"Microsoft screws over everyone, but Apple screws over its friends, and that's worse," said Tom Santos, owner of MACadam computers in San Francisco.
Santos and four other dealers are suing Apple in a California court because they claim the company is price gouging, withholding hot products and unfairly luring their customers to splashy Apple-owned stores.
For example, Apple makes dealers pay $244 for three-year computer warranties it sells to Apple Stores for $2.70 each, Santos claims. He culled his example from invoices that he obtained from Apple's Web site.
The steep markups are killing profits for dealers, many of whom are mom-and-pop shops that stuck with Apple through the rotten Newton years as well as the lucrative iMac era.
Thomas Armes, owner of Elite Computers & Software in Cupertino, said he laid off 71 employees and scuttled his 17-year-old retail business that sold $20 million in 2002 due to Apple's anti-competitive practices.
"When Apple was giving their stores all the flat-panel iMacs they wanted and we only had a demo model weeks later, I knew that my stores were in trouble," Armes said.
The five dealers are suing Apple in separate lawsuits. They charge the company is hurting shareholders by propping up Apple Stores with unfair discounts and poisoning dealer relations with aggressive tactics.
Apple launched its retail chain in 2001, complete with slick window displays, space-age designs and swanky locations. Think Mr. Spock meets Donald Trump.
Apple now has 77 stores in the U.S. and one in Tokyo.
The rush to retail has some analysts scratching their heads.
"Apple's investment in retail stores is on thin ice," said Rod Bare, an equity analyst with Morningstar. "Straying into retail is a risky venture. The company-owned stores are not the blockbuster hit Apple expected."
Apple controller Peter Oppenheimer said the company's stores had second-quarter sales of $266 million, down $7 million from the December quarter. Apple Stores posted their first profit last year. Apple won't comment on dealer complaints due to pending lawsuits."
So. Not a nice meeting I'd say. How's Apple stock? Anything anyone would like to say about this?
I kinda knew this would happen. It would be inevitable that Apple would put the squeeze on these other Mac retailers.
I'm sorry I can't say more. Have to get back to doing some research. Thought I'd share...
"RETAIL TELLS INVESTORS APPLE BITES
By TOM ANDERSON
April 25, 2004 -- Rebel Apple Computer, which cast itself as the foe of Big Brother in its famous "1984" ad spot during Super Bowl XVIII, has become the oppressor, say some Apple dealers.
Two retailers pleaded their case directly to shareholders at Apple's annual meeting last week in Cupertino, Calif.
"Microsoft screws over everyone, but Apple screws over its friends, and that's worse," said Tom Santos, owner of MACadam computers in San Francisco.
Santos and four other dealers are suing Apple in a California court because they claim the company is price gouging, withholding hot products and unfairly luring their customers to splashy Apple-owned stores.
For example, Apple makes dealers pay $244 for three-year computer warranties it sells to Apple Stores for $2.70 each, Santos claims. He culled his example from invoices that he obtained from Apple's Web site.
The steep markups are killing profits for dealers, many of whom are mom-and-pop shops that stuck with Apple through the rotten Newton years as well as the lucrative iMac era.
Thomas Armes, owner of Elite Computers & Software in Cupertino, said he laid off 71 employees and scuttled his 17-year-old retail business that sold $20 million in 2002 due to Apple's anti-competitive practices.
"When Apple was giving their stores all the flat-panel iMacs they wanted and we only had a demo model weeks later, I knew that my stores were in trouble," Armes said.
The five dealers are suing Apple in separate lawsuits. They charge the company is hurting shareholders by propping up Apple Stores with unfair discounts and poisoning dealer relations with aggressive tactics.
Apple launched its retail chain in 2001, complete with slick window displays, space-age designs and swanky locations. Think Mr. Spock meets Donald Trump.
Apple now has 77 stores in the U.S. and one in Tokyo.
The rush to retail has some analysts scratching their heads.
"Apple's investment in retail stores is on thin ice," said Rod Bare, an equity analyst with Morningstar. "Straying into retail is a risky venture. The company-owned stores are not the blockbuster hit Apple expected."
Apple controller Peter Oppenheimer said the company's stores had second-quarter sales of $266 million, down $7 million from the December quarter. Apple Stores posted their first profit last year. Apple won't comment on dealer complaints due to pending lawsuits."
So. Not a nice meeting I'd say. How's Apple stock? Anything anyone would like to say about this?
I kinda knew this would happen. It would be inevitable that Apple would put the squeeze on these other Mac retailers.
I'm sorry I can't say more. Have to get back to doing some research. Thought I'd share...
Comments
There are already at least two threads:
http://forums.appleinsider.com/searc...der=descending
Originally posted by FormerLurker
This article is new, but this subject is not....
There are already at least two threads:
http://forums.appleinsider.com/searc...der=descending
I know, but since there is a "non-revival" of old topics I'd thought I'd start anew...
And one more story like this and Apple will be digging deep out of that hole.