Distributors wait to see where axe will fall

Apple UK managing director Jon Molyneux has revealed that the manufacturer will cut one distributor from its current lineup of three by the end of the month.

Molyneux said the UK channel needed to be brought into line with declining worldwide revenue. Apple uses UK distributors Ingram Micro, Computer 2000 and Computers Unlimited. 'We are a $7 billion company this year, which is a significant reduction from the year before. We need to right-size our distribution strategy accordingly.'

The move is part of Apple's worldwide strategy to cut back on the number of distributors it uses. In the US, Apple strengthened existing relationships with two master distributors on a worldwide basis - Ingram Micro and Micro Age.

It would prove contractually difficult for Apple UK to cut Ingram out of the distribution circuit.

But channel sources agreed that C2000 shifts a significantly greater volume of Apple kit than Ingram Micro. This is further complicated by strong links between Apple UK and C2000. Apple channel sales director Julian Klein worked at C2000 as commercial director.

A senior channel source claimed that Computers Unlimited, the only specialist Macintosh distributor, was unlikely to be axed.

Molyneux said the distribution contract would be open for tender. He confirmed that bids were also being considered from two distributors outside its lineup, one of which is understood to be Principal.

Alan Clarke, vendor director of Principal, declined to say whether it was talking to Apple but said: 'We are always interested in profitable business.'