Apple launches price match policy

Apple Computer Australia has announced a "price matching" policy which would see its direct online store match prices quoted by its reseller channel on Apple hardware and software product.

An email sent to the Apple channel and obtained by CRN on Monday morning, stated that if a customer sees Apple hardware or software for less at an authorised Apple reseller, "we will match that price up to 10 percent off the current Apple Store regular price." The company's US operation launched the policy recently.

The move - in response to global directives - has left some Apple resellers up in arms. Adam Steinhardt, MD at Apple reseller Next Byte was not surprised by the move. "They've [Apple] been competing against us for years, so it's nothing new. We expected it."

Steinhardt said that compared to five years ago, the Apple reselling business is today a "much harder" business to run. "It's not an easy platform to grow," he said.

However, he believed that customers "have a good experience when they go to our shops and the call centre experience is a different one."

Ben Morgan, MD at AppleCentre in Taylor Square, said that the Apple channel is seeing changes that would have some huge ramifications over the next couple of years. "As an owner of a company [reseller] you have to be prepared to read between the lines."

Another reseller - who wished to remain anonymous - was miffed by the idea.
"It's somewhat insulting. Apple has spent the last three years at conferences trying to explain that they're not the enemy. By putting a price matching facility in place, it [Apple] competes with its own channel.

"Personally I don't understand it - why would you be seeking to compete with these companies by means of price matching? I think what they're after is higher profits - they want the small margin that we [get] on top aswell.

"When the channel is the majority of your business and you start doing this sort of thing, all you do is antagonise the channel," the reseller said.

Steve Bardel, director at an AppleCentre in Flinders St, Melbourne, said he believed the move was indicative of the fact that Apple doesn't have a long term view of its channel.

"By price matching their channel, they're not are helping us to build our business are they? They're trying to weed out the weak. Apple want expansion and growth and if you're not paying your bills, you're not getting that," he said.

He said the Apple Store is a low-overhead and low-risk proposition. "I don't hold it against them - I'm sure that the other big IT companies do the same thing."

Still, he believed that his business was strong enough to cope with Apple's direct strategy. "I have a successful Apple business, I really don't have any qualms about them doing it because I believe my business is strong enough."

He said that while he uses the Apple brand to get people in the door, he makes more margin from third-party products. "I have pity for the smaller channel partners that rely on shipping machines [boxes]. I believe that the channel partners that have got a weak balance sheet will definitely be in trouble," he said. "I'm glad that they've come out and said that they are price matching," he said.

The program applies to identical "Apple-branded, pre-configured and configured-to-order hardware and software products that are currently in stock at an Apple authorised reseller."

"The products must be ones for which Apple currently is taking orders on the Apple Store, with estimated delivery dates of not more than three weeks."

Henrik Kocharians, MD at Sydney-based Apple reseller, Maccentric, said the price matching policy was “no different to a customer coming to us, getting a quote from us and going to other dealers and expecting a price match.”

“I don't want customers who are going to screw us down to the last cent – I'm not interested. 95 percent of the market that a lot of resellers are failing to see is the Windows market. These are the guys who want you to transition them from Windows to Mac.

“Where are they [Apple] competing? On price? That's it,” he said.

Apple Computer Australia declined to comment.