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#1 |
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Kasper's Automated Slave
Join Date: Nov 1997
Posts: 6,153
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Apple presence forces Glasgow reseller to close its doors
Repeating a trend seen elsewhere in the world, Apple's Glasgow, Scotland retail store has been siphoning enough customers away from local reseller Scotsys to force the third-party shop to close its store in the city.
Ever since opening in late August of last year, the conspicuously-marked official Apple outlet has effectively squeezed Scotsys' Glasgow store out of its mainstream market, making it unprofitable for the latter to compete with the Mac maker outside of specialty fields such as education, government, and small business. "The closure of our Glasgow store is a simple recognition of the fact that, since Apple opened its outlet on Buchanan Street, there has been very little room at the high-volume consumer end of the market," says managing director John McAleenan, who heads Scotsys' parent company Adventi. Despite the setback, Scotsys will continue to operate offices out of Bellshill and Edinburgh and says that retail was not key to its success. The firm points out that it has just secured a regional government order for 1,000 Macs and that it continues to work with the government to encourage orders from local businesses, rather than large multinationals such as Apple. The shuttering of the reseller's Glasgow presence represents the latest chapter in what is often seen as a tug of war between Apple and the third-party stores it needs to extend its sales network. While Best Buy plans an expansion of the number of its stores with official Apple sections, Mac-focused stores have sometimes found themselves under increased pressure once Apple either sets up a nearby store or achieves a breakthrough in direct sales for the region. Apple's online store is believed to have forced multiple Canadian stores to close even before first-party stores appeared, as resellers were often unable to supply customers with new systems as quickly as direct orders. Some of these retailers have in the past accused Apple of making small and medium-sized resellers a distant second priority to its own shops and very large retailers like Best Buy, shipping most iPods and Macs to its preferred outlets in advance of others. The issue first came to wider public attention in 2003, when MACadam's Tom Santos and the owners of two other since-closed Apple resellers filed a lawsuit against Apple, charging the company with taking illegal steps to drive customers to its official stores at the expense of local businesses. At the time, the plaintiffs argued that Apple was pursuing a systematic plan of shutting down third-party stores by delaying shipments of new products, badmouthing resellers, and of raising the costs for both new Macs and repairs. To date, Apple has denied the claims. Beginning as early as 2004, the Cupertino, Calif.-based company has also reportedly instituted reseller-neutral policies for sales staff to prevent them from disparaging third-party shops and products in an attempt to steer more business towards Apple. |
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#2 |
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Registered User
Join Date: Feb 2007
Location: Glasgow
Posts: 87
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Good riddance to bad rubbish. All I ever heard was negative things about Scotsys.
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#3 |
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Registered User
Join Date: Jul 2007
Posts: 34
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Apple has never respected resellers or developers, or customers for that matter. Apple is a proud and haughty company, which is a direct reflection of Steve Jobs. The Apple Stores are all staffed by clones of Steve Jobs. For a company with an anti-Big Brother persona, they enforce intellectual conformity in a way that Mao could only dream about.
Yes, they make a great computer, but their business and personal ethics are the inverse. Had they supported their dealers properly initially there would be no need for Apple Stores at all. Apple will eventually lose all these stores they are opening. Just as the smaller stores could not maintain their overhead, neither will Apple be able to. A few unexpected bumps is all it will take. At this point their strategy is to compete with themselves. They are saturating the box retailers at the same time that they open stores. It's nuts. It would have made more sense to create a franchise system with the Apple resellers, but they never gave them enough margin to survive. You don't assemble a huge hoard of cash by treating people fairly, you assemble it by treating people unfairly. |
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#4 |
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Registered User
Join Date: Jun 2004
Location: Dublin, Ireland
Posts: 7
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Scotsys can't even compete. Here at one of Scotland's largest universities, we simply don't buy much in the way of computers from them, given that Apple's educational discount saves us some 10% (and there's the usual Higher Education service contracts in place). And that, even though Scotsys's retail store is literally two minutes from my office. All I'd buy there is the occasional power supply, or a laptop bag.
That said, I can't say I've heard bad things about Scotsys. They're friendly and competent, and usually have the latest hardware in the shop. But I can see why they won't be able to compete once Apple is going to open its Princes Street presence (if that is to happen). |
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#5 |
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Registered User
Join Date: Apr 2006
Location: The Ansible
Posts: 11,815
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How exactly doing Apple selling more expensive computers hurt other retailers?
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#6 |
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Registered User
Join Date: Oct 2006
Posts: 37
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It is in the services
When I was in the Apple reseller channel they treated us fine. Most of the money was in services outside of the store. Most reseller who count on Retail tend to struggle anyway. They can't stock as many iPods as a Target or Walmart and people are comfortable enough with on-line ordering that they will buy from who ever is the cheapest or has some rebate or bundle.
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#7 |
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Registered User
Join Date: Apr 2006
Location: Houston, TX (The Woodlands)
Posts: 5
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Facts
Short story: Apple resellers, when they signed on with Apple, were NEVER promised perfect support, or exclusive non-compete agreements, or that Apple would never change their price, plans, strategy, scope, or offerings.
I'm sorry, but nostalgia aside this is just business. It's not "big bad bully" beating up "helpless little girl". When you sign on as an Apple reseller you know what you're getting into: you're going to get support and service from a company KNOWN to have less-than-wonderful service and support for it's resellers. You KNOW that. If you want a company that has a "perfect" reseller relationship then get into some other business. No one forced them to choose to sell Apple products -- they did that on their own. And they did it because there was a profit in it. But business is not static. Things change. If Apple decides to charge them 10 times what they do now, then so be it. Both parties will live with the results, good or bad. If you don't like it, find a new business. Business is fluid... it changes every day (both good and bad), and as a business owner you have to change with it -- sometimes performing a 180° turn. It's just business. Don't like it? Then stop selling Apple products. Sell something else. Create your own product. Or maybe find a better way to package, market, or bundle services in with the deal. In short... Apple doesn't promise success, non-compete, perfect service, perfect prices, and a non-changing relationship. No business on this earth does all that. The press just likes to point out situations like this so that they can use our emotions and nostalgia to make it appear like a "big bully" situation. It's not. It just simply is not. It's business and everyone does it in some form or the other. You think Scotsys didn't try to squeeze every last penny from its customers at every possible turn? You bet they did. You think Scotsys was there to support customers who had problems at the drop of a hat? I doubt it. No one is blameless in this game -- so we need to not let the press control our emotions and nostalgia in situations like this. This is not a "personal" situation, as the press would like us to believe (as that makes for much better news). It's just business. |
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#8 |
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Registered User
Join Date: Jul 2007
Posts: 34
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That is another whole separate problem. Why do government's allow the same goods to be sold at different prices? But don't kid yourself, the manufacturer plays favorites. No matter what the independent store does, the factory store will get favors. HUGE FAVORS. In marketing alone there is a huge disadvantage, but as the other poster noted, the education discount is offered direct only, not through the retail channel.
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#9 |
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Registered User
Join Date: Jan 2002
Posts: 277
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Wow, people just don't get it. In the days of online shopping and big box stores, the smaller retailers have to smarten up. Does anyone honestly think this is just a problem with Apple? Every product from cell phones to cameras to other PCs, or even non-tech products can be bought cheaper online or at big box stores.
Here's a subtle note to Apple retailers: YOU CAN NOT HAVE A VIABLE BUSINESS IF ALL YOU WANT TO DO IS SELL MACS. You need to provide value-added service, not just retail. Even if you have friendly and knowledgeable sales people, there's nothing stopping people from talking to you and then going home and buying from Apple online. You need to offer courses, installation, consulting, etc. - something that will make your customers pay for something they can't get cheaper elsewhere. The above retailer seems to be surviving - just not their retail operation, so it seems like they're getting the message. But other retailers have not (like the article about the 3 Canadian retailers referenced in the article) |
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#10 |
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Registered User
Join Date: Sep 2006
Posts: 3
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No big surprise
Given my past experiences with Scotsys, it's no surprise they have shut. Despite being the mac 'specialist' in Glasgow & Edinburgh, they were expensive, had very little stock of anything, couldn't answer anything about a mac if it wasn't printed on the box somewhere and gave the general impression that they just couldn't be arsed with the general public. I don't know anybody that liked the shop or will be sorry to see them go.
I can't speak for their institutional sales side but I can only hope their service is better. |
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#11 |
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The New Number 2
Join Date: May 2003
Location: The Village
Posts: 7,528
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The guys in Scotsys in Edinburgh were pretty cool, friendly and helpful but the business seemed to lack ambition. I think that is the problem - they stayed small.
They had a golden opportunity handed to them on a plate for years to sell the coolest stuff - in fact they had the Apple market potentially sewn up in Edinburgh until John Lewis ran with the ball instead. If you are selling the coolest tech products in the world in a University town whose students have probably the one of the highest disposable incomes of any in Europe then, well......
Wanted: new sig. Applications invited by posting ridiculously lame wingnut comments in this thread.
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#12 |
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Registered User
Join Date: Jan 2008
Posts: 2
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Good News
It's been my misfortune to have to deal with Scotsys (for support) on a number of occasions in Edinburgh. The experience has always been bad.
Apple have obviously shown the good people of Glasgow how Apple products should be sold and supported. Hurray for competition! |
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#13 | ||
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Registered User
Join Date: Nov 2001
Location: MA
Posts: 315
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Quote:
Quote:
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-JD
-- "If Apple wasn't so greedy, they would build G6's and give them away!" |
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#14 |
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Registered User
Join Date: Oct 2007
Posts: 245
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I think you got the title of the article wrong. How about "Scottish retailer refuses to offer competitive service and goes under"?
It was their choice to fail to keep up with the modern world. |
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#15 | |
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Registered User
Join Date: Oct 2005
Location: Edinburgh, Scotland
Posts: 293
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Quote:
Scotsys Edinburgh is a stagnant little store, with a single model of each of Apple's range if you're lucky – always a couple of months out of date mind – whose notion of "value added" is to hike up their 3rd party kit prices whenever they remember to be bothered. Ugh. Apple's UK webstore alone was enough to keep me away from them. Here's to hoping that Glasgow's proximity on Cupertino's (007 arch nemesis fortified compound style) world map doesn't put them off the Princes Street option for much longer. I heard "from a reputable source" that Glasgow and Edinburgh were meant to be happening at the same time. Dang! |
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#16 |
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Registered User
Join Date: Nov 2007
Posts: 54
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It is pretty crappy that Apple does these things to resellers but its true that every big company does this in one way or another. Wal Mart shuts down plenty of businesses because who can afford to start up a store that offers everything from groceries to auto parts to guns to clothes at very competitive prices? The fact is when a company becomes big enough they can provide things that start up or smaller companies simply cant. They are almost too good at what they do and others can't compete. A free market will work itself out though in the end.
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#17 |
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Registered User
Join Date: Jun 2007
Location: Bushie'sland
Posts: 302
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These resellers provided repair services and used products that Apple doesn't. The resellers are now gone in my area. When I took my dead (power supply) 39 month old display for a repair to the Apple store, they told me it is "vintage" and they don't fix vintage products.
Cubist
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#18 |
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Registered User
Join Date: Jul 2007
Posts: 34
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The invisible hand of stupidism rears its ugly head again. It's invisible because it doesn't exist.
There is no such thing as a "free market" if you accept the "scientific" concept of cause and effect. Things happen for a reason. People make a conscious choice to screw other people. "In the end," we'll all be dead. :-) Yet another cause and effect. |
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#19 |
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Registered User
Join Date: Mar 2007
Posts: 728
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#20 | |
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Registered User
Join Date: Nov 2007
Posts: 54
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Quote:
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#21 |
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Registered User
Join Date: Mar 2007
Posts: 728
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For over 20 years, Apple tried every permutation of the retail partner route, and the result was a nice view over the precipice of bankruptcy. The Apple Stores, like 'em or hate 'em, are a major cog in Apple's newfound success. It's called taking back control.
I used to like the little Mac shops (and little PC shops for that matter), but no longer see the big value-add for them. |
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#22 | |
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Registered User
Join Date: Dec 2005
Location: Fangorn forest
Posts: 281
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Quote:
BTW Apple sets ridiculously high prices for all its parts and specifies tight, sometimes impossible to achieve, times for repair. For example a service provider who replaces a drive in a notebook is paid for one unit of labor. If I remember correctly that's just 20 minutes. In the case of the 12" PowerBook it's impossible to replace a drive in under 45 minutes. Selling used product is one good area to differentiate from Apple stores. You can usually make good margins, but occasionally a unit will fail in warranty (stores usually have to offer a 30 day guarantee on used stuff) and blow the profit of several units. Another area where a re-seller can shine is by offering rentals. This can work when you have sufficient demand from corporate clients who can afford to cover a significant portion of the unit's cost every week. It's completely uneconomical for a retailer to rent machines at consumer rates. It's hard to make much money as an Apple reseller. Profit margins on high end hardware is under 10% and can drop below 5% on consumer models. I recall selling $1100 eMacs for just $40 above cost. It's almost not worth the time it takes to answer a few questions and do the paperwork. You can't mark up your RAM 25-40% anymore because even though Apple has sky high RAM prices, your customer can simply walk across the street to the local PC shop where all RAM is only 10% over cost. Offering a good selection of Mac specific notebook bags is one of the few ways to beat the big box stores, but there's better selection online. I don't recommend anyone get into the reseller game. It's a good way to lose all your hair trying to stay above break even. |
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#23 |
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Registered User
Join Date: Feb 2008
Posts: 2
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#24 |
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Registered User
Join Date: Oct 2007
Location: Los Angeles, Kahleefornyah
Posts: 226
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Hello? Can we get back to stories that COUNT please? Stuff that happens in America and not those little islands in the ocean? Sheesh....
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#25 |
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Registered User
Join Date: Nov 2007
Posts: 66
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#26 |
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Registered User
Join Date: Nov 2007
Posts: 66
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.....
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#27 | |
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Registered User
Join Date: Oct 2005
Location: Edinburgh, Scotland
Posts: 293
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Quote:
![]() My brother came to them recently with an out of warranty Power Mac G5 coolant leak, and soon discovered they weren't competitive on repair. He took his custom elsewhere. I was in there looking for a 12" laptop bag for a (new to the Mac) friend's eBay acquisition, and discovered their total selection was smaller than when I bought my bag in the same shop five years ago and the prices start at double. To have any chance of business as the small Apple specialist you've got to try a lot damned harder than that. They play(ed) it by the book, and without much eagerness or enthusiasm at that. The Edinburgh store you may well like is dead man walking. Glasgow's was reputed to be better, and how many months has it taken for an Apple Store to do it justice? Now if only there were a place you could take your friends to in town and let them get a feel of the computers, and wasn't a scrawny little dump? I'd like not to have to ride the train the next time I'm winning people over! |
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#28 | |
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Registered User
Join Date: Aug 2006
Posts: 646
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Quote:
Come on, man. Not cool. ![]() -Clive |
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#29 |
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Registered User
Join Date: Feb 2003
Location: Treasure Island
Posts: 1,605
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To be honest, this was on the cards as soon as Apple announced they were opening a store in Glasgow. Scotsys weren't any worse than any of the other Scottish Resellers, and I think we'll see a good few of these Resellers bailing from the Mac scene before long.
The Glasgow Apple Store offers better pre-sales advice and after-sale care; their prices are more competitive; and most importantly of all, they keep everything in stock - no waiting to the end of the week (or in John Lewis' case the end of the month). The stock situation is absolutely the key here – every single Apple Reseller complains that they can't get hold of the stock in the quantities that they need. Scotsys say it, John Lewis say it, PC World say it, CMYK say it, TMAS say it... nobody can get the stock. But the official Apple Store always seems to have everything in stock - read in to that what you will. Yeah, Scotsys can claim that retail wasn't key to their success, but I think everyone concerned knows that they simply had their bollocks nailed to the post by Apple.
When Steve Jobs wants to hear your opinion - he'll give it to you...
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#30 | |
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Registered User
Join Date: Jul 2007
Posts: 34
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Quote:
All competition does is change hands of the ownership of the capital, like two dogs fighting over two bones, and too dumb to share. (This is an area that Marx didn't understand at all.) For example, there will still be an Apple store in Glasgow, but it has nothing to do with "regulating prices." As noted, the prices and services between the two companies had already differed, in both directions, on different items. If a new store should return, that will still be the case. Again, there is no data to use to claim that competition is "regulating prices" or that the free market will "work it all out." Adam Smith and Marx (who drew heavily on Smith) were both wrong. Henry George was closer to the mark, but even he missed some of the obvious things. FYI, Adam Smith's concept is really just an echo of Voltaire's Pangloss from Candide; "Whatever is, is best." Pangloss saw nothing when his eyes were open, and while everything was as he described, none of it was true. He was, of course, the modern day college professor (left or right doesn't matter.) In ancient times he would have been the sophist. The problem is much more like Forrest Gump: Stupid is what stupid does. The invisible hand of stupidism (as I call it) it one of the most powerful wrong ideas afloat in the world today. It is the political equivalent of "checks and balances," which Paine correctly called a "farce" in Commonsense. He named the book Commonsense because people didn't have any, and that is still the case today. |
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#31 |
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Registered User
Join Date: Nov 2007
Posts: 54
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Inflation is caused by the devaluation of currency through borrowing (printing money out of thin air with nothing to back it up). Hey at least you tried to sound smart by name dropping. I am glad you declared also that competition does not regulate prices whatsoever. Good to see you enlighten the entire world with that.
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#32 |
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Registered User
Join Date: Jan 2008
Location: England UK
Posts: 200
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Brand Control
It's not scientific but perfectly natural for a company to want to take control of its brand. If it can produce its own hardware, software and then control the distribution of that product, then why not. ABC...123...
I would say it's more to do with philosophy than anything else. Apple (Jobs) just see's this Scottish retailer as another factor which may dilute that philosophy, hence taken control and keeping it in-house. Not unique to Apple i'm afraid. In the end people ultimately decide what is best for them and not Apple. |
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#33 | |
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Registered User
Join Date: Jun 2007
Location: Boise, ID among others
Posts: 529
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Quote:
abusive husband: "It's your fault. You knew I wasn't the nicest guy in the world before we got married, and now you're complaining that I beat the shit out of you?" bad analogy but you get my point. |
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#34 |
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Registered User
Join Date: Sep 2007
Posts: 4
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I think most Apple Authorised Resellers are set up by Mac buffs who somehow think that if they sell Macs, they'll be doing an invaluable service to Apple. Most of these buffs are invariably disappointed when Apple (consciously or not) forces them out of business.
Apple makes its own hardware and software. I think it was inevitable that they would eventually master internal sales as well, and any people who thought otherwise were only kidding themselves. |
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#35 |
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Registered User
Join Date: Oct 2005
Location: Edinburgh, Scotland
Posts: 293
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Yup. Spot on.
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#36 | |
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Registered User
Join Date: Feb 2007
Location: Glasgow
Posts: 87
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Quote:
1) When they told my friend she needed a new iBook when all that was wrong was that the hard drive had failed (we got a second opinion) 2) Various small companies I've done work for have had support contracts with them, and get no support whatsoever (or quick fixes which go horribly wrong) 3) Computers being sent in for repairs and being returned with even more problems. I would go on, but as there's only 24 hours in the day, we don't have nearly enough time. |
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#37 | |
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Registered User
Join Date: Jul 2007
Posts: 34
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Quote:
Money is just an intellectual agreement. It isn't real. Therefore, the issue is not what money "is" or how much exists, but rather what we do with it. And again, since you seemed to have missed the point, if competition "regulated" prices, then inflation would not be constant. Your money-supply theory is to lay one fallacy upon another, without addresses the original problem. If the invisible hand of stupidism really worked, then there would be no inflation. Free market theory is a farce, but your post does point to the heart of the problem. There are two contradictory theories floating around. One has to do with the movement of goods (free markets,) the other has to do with the movement of money (monetary policy.) The two theories are mutually exclusive, primarily because the first theory assumes that everyone is equal, whereas the second theory assumes that everyone is unequal. Neither theory is right, since both states exist simultaneously. They describe a situation that does not exist. |
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#38 | |
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Registered User
Join Date: Jul 2007
Posts: 34
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Quote:
And, of course, the one thing that goes wrong always stands out more than the 100 things done right. In any case, it is unlikely that the Apple Store will even try to give the same level of service as an independent store. The Apple Store is just a pretty warehouse. They will not attempt to solve a ALL of a customers problems, therefore they won't fail at anything. |
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#39 | |
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Registered User
Join Date: Feb 2003
Location: Treasure Island
Posts: 1,605
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Quote:
When Steve Jobs wants to hear your opinion - he'll give it to you...
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#40 |
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Registered User
Join Date: Nov 2001
Posts: 1,591
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