Web puts Apple kit a mouse-click away
Apple's online shop means the channel could be in store for a head-on collision with the manufacturer's direct sales strategy.
Apple is going head-to-head with Dell after revealing plans to sellon collision with the manufacturer's direct sales strategy. direct on the Web, ending months of speculation.
On 10 November, Apple revealed it was to roll out a direct sales strategy through a combination of Web-based sales and in-store retail outlets at CompUSA. Apple will also set up a build-to-order configuration service as well as overhauling its product range.
Apple founder and acting CEO Steve Jobs said: 'We are not sitting down to take the punches. Michael Dell, we're coming for you.'
The direct sales initiative will be two-pronged, with Apple selling product through a Web-based shop. The online Apple Store went live in the US this week and will be rolled out across Europe in March. Apple is offering customers financing options and will ship kit to the doorstep.
In addition, Apple will introduce 57 retail stores across the US with retailer CompUSA. Forty Apple Stores will be opened before Christmas.
Apple said it aimed to hit Dell's target of 15 per cent of revenue from internet sales.
Apple representatives claimed there was no conflict as they guaranteed there would be no preferential treatment given to direct sales over reseller outlets.
The manufacturer has also introduced a range of desktop systems based on G3 architecture, jointly developed by Motorola and IBM. The architecture puts all the components on a single motherboard, enabling Apple to manage its inventory more efficiently.
The company was confident it would not run out of product in the run-up to Christmas - there are 20,000 G3 products in the channel. Apple claimed if it sold all these machines it would be back in profit.
Paul Clark, Motorola European marketing communications manager, said the architecture would enable the next generation of processors to run at speeds of up to 600MHz. The entry-level PowerMac G3s to be launched will start at about $2,000 and will include minitower systems, desktops and notebooks.
To improve inventory problems and product supply, Apple has introduced a build-to-order configuration service. There will be three configuration levels - good, better and best, which will correspond with the entry-level, mid-range and high-end systems.
But observers were surprised by Apple's failure to announce the anticipated partnership with Oracle. One observer expressed surprise that no announcement had been made.
Jobs failed to attend the Q&A session after the announcement and Apple representatives refused to answer questions about Oracle, investment or the network computer. Apple's share price went down 4.3 per cent at the close of play on 10 November.