Most independent retailers are selling the Apple iPhone 3G, on average, at R1 000 higher than Vodacom's recommended resale price, as they claim that otherwise they would not be making a decent profit.
The recommended resale price posted by network operator Vodacom on its Web site is R6 389 for the 8G model and R7 569 for its 16G sibling. The phones went on sale last week Friday, with Vodacom bringing in some 30 000 units into the country.
The independent resellers say that, even with a markup, their prices are still within international norms. Today, the Apple iPhone has gone on sale in Russia at average prices of $1 000, or R8 000.
A spot check by ITWeb shows that the pre-paid or cash price for 8G and 16G models, respectively, at Cellular City, is R7 656 and R8 659, and at Cape-based Apple premium resellers Digicape and Project 3 the respective prices are R7 189 and R8 369.
iStore, the retail arm of Apple equipment importer The Core Group, which is not bringing the iPhone into the country, is reselling the units at R6 800 and R7 999 for the 8G and 16G models.
A salesman at one of the iStores says the mark up is necessary, “otherwise we are really losing money”. However, he says sales have been extremely positive.
Large reseller Dion Wired, which is part of the Game group, is selling the iPhone at Vodacom's listed prices.
Legal right
“We ensure that we are among the first to market a new product and that we sell it at the cheapest prices,” a Dion Wired manager, who asked not to be named, says. “Sales of the iPhone though have not set the world alight.”
Digicape MD Graham Greathead says if his business had to sell iPhones at the recommended resale price, it would only make R70 if someone had to pay with a credit card.
“That is not worth it for us,” he says.
Greathead says that as an Apple branded store, Digicape also takes on a lot of customer queries from people who have bought their units at other resellers and this cost has to be factored in too.
“We cannot turn away anyone who has bought an Apple iPhone somewhere else as this could do great damage to the brand,” he says.
Greathead says sales of the iPhone have been “pleasing”, but he refuses to give any details.
Seymor Joffe, Cellular City's national sales manager, says: “As independents, we have to sell it for more in order to make margin, but that is our right under South African law.”
South African competition law forbids the setting of standard resale prices and several high profile cases recently dealing with the issue have resulted in hefty fines being levied against various companies.
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