A legal spat between Apple and its largest French Premium partner has prompted others to vent their spleen – albeit anonymously – over how the vendor allocates stock and treats its channel.
As reported by ChannelWeb earlier this week, French Apple Premium Reseller (APR) eBizcuss has filed a suit against Apple, claiming the vendor has been unfairly favouring its own stores when doling out supplies of new products.
Some insiders predicted the move – which was originally revealed by French newspaper Le Figaro – could pave the way for legal action by other APRs across Europe.
One continental European APR who saw the coverage contacted ChannelWeb to sympathise with eBizcuss' position and slate Apple's channel tactics. A UK APR has also stepped forward to lend its backing to eBizcuss's cause, although both would only talk anonymously due to fears of possible repercussions from the vendor.
In a 4,400-word missive, the European APR reeled off a list of factors he claimed will stick in the throat of APRs as the forced migration to the new v2 store format gathers pace.
He alleged that:
- APRs have sometimes not enjoyed parity against Apple's own stores and high street retailers when it comes to the availability of flagship products such as the iPad and MacBook Air, giving them the embarrassing reputation of "shops with no products".
- Apple's SI partners are being allowed to stray onto APR turf by targeting SMB and education deals, driving down margins.
- Some APRs are encountering cashflow difficulties brought about by Apple's decision to cut their credit lines, he alleged.
- APRs currently cannot stock iPhones, which is a big source of customer dissatisfaction.
- The v2 format forces APRs to reduce the amount of lucrative third-party accessories they offer, he claimed.
Refitting stores to the new v2 design costs $400,000 (£258,000) a time, the source estimated, and APRs must upgrade their locations by the end of this year or lose their status – which would cost them two to four points in margin.
He stated: "According to our calculation, if eBizcuss has 15 shops, the investment required to remain in the business as an APR v2 would be $6m to $8m... one must concede that without product to place in their shops, with unfair competition from Apple's own pricing and regulation, with no access to iPhone, with no guarantee from Apple on any of the previous topics, it may be a very dangerous game to play."
Apple, which briefly became the world's most expensive firm last year, keeps its APRs on a notoriously tight leash and the continental European APR gave an alias to avoid possible repercussions.
The APR in the UK – which Apple treats as a separate region from the continent – said he too supported eBizcuss's move. He would also talk only on the condition of anonymity.
"The general consensus is good luck to them [eBizcuss]," The UK APR said. "APRs on the continent are definitely feeling the pain more than us, but there are instances where Apple has given preferential treatment to its own stores and website and even the high street retailers like DSG.
"We totally feel eBizcuss's pain and hope that something positive comes out of it. Apple is not giving us the tools to do the job it wants us to do."
The v2 upgrade may force several UK APRs to hang up their boots in 2012, he added.
"By the end of this year it will be a very different picture in terms of which APR stores are open," he said. "We have all known about v2 for 18 months and the format is fantastic – customers like the fact it is not dark and dingy like v1. But everyone is trying to hold off for as long as possible to do the refits because of the expense and because retail in the UK is not great right now."
Clive Longbottom, analyst at market watcher Quocirca, described eBizcuss's actions as "brave".
"Like a lot of these large companies, Apple will have more lawyers than the channel partner will have employees," he said.
Dave Stevinson, sales director of distributor VIP Computers, said he could see both sides of the story.
"Apple is in the fortunate position of having huge demand for its consumer products, and naturally consistency of supply will be limited," he said. "The APRs can add their value by getting behind the macs and servers where the supply is prevalent, customers value service & support rather than mere fulfilment of ipads."
"Apple as a brand is iconic and although the v2 store fitting upgrade will be painfully expensive - I am sure it will be worth it. It is an investment not a cost."
ChannelWeb sought a response from Apple but the press office was shut as this story went to press.
Nana Baffour opens up on Getronics' mammoth acquisition of Pomeroy
Analyst predicts SaaS will remain the dominant segment in the market as it grows 17 per cent in 2019
NSS Labs claims vendors are refusing to have their products tested effectively and are trying to restrict its access
CRN's Nima Green caught up with Chris Labrey for a quick Q&A at CRN's recent European Channel Leadership Forum