Apple has admitted fears that resellers may cease working with it over concerns about it beefing up its direct sales unit.
In a 10-K Annual Report document filed last night following its financial results the day before, Apple outlined a number of risk factors which could negatively impact the business. Fourth of the 27-strong list was information regarding its go-to-market operations.
The business operates through a network of distributors and resellers, whose own financial performance could affect Apple, it claimed, pointing out the "narrow operating margins" partners have to deal with.
The company admitted its channel partners have raised some concerns about its go-to-market strategy.
"Some resellers have perceived the expansion of the company's direct sales as conflicting with their business interests as distributors and resellers of the company's products," the filing said.
"Such a perception could discourage resellers from investing resources in the distribution and sale of the company's products or lead them to limit or cease distribution of those products."
But it insisted it has and will continue to invest in programmes to boost resellers' sales.
"These programmes could require a substantial investment while providing no assurance of return or incremental revenue," it added. "The financial condition of these resellers could weaken, these resellers could stop distributing the company's products, or uncertainty regarding demand for some or all of the company's products could cause resellers to reduce their ordering and marketing of the company's products."
Elsewhere in the filing, Apple pointed out outsourcing conditions, changing global business conditions and potentially damaging law suits as other risks to the company's success.
The fast pace of change in the technology industry also poses a risk to Apple, it admitted in the filing.
"To remain competitive and stimulate customer demand, the company must successfully manage frequent product introductions and transitions," it said.
"Due to the highly volatile and competitive nature of the industries in which the company competes, the company must continually introduce new products, services and technologies, enhance existing products and services, effectively stimulate customer demand for new and upgraded products and successfully manage the transition to these new and upgraded products."
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