Apple centre retailers have expressed mixed feelings about the closure of the company`s South African representative office and the transfer of its responsibilities to distributor The Core Group.
The move comes almost 10 years after Apple re-opened its doors in SA, after having divested from the country in the 1980s.
The announcement was made on the eve of Apple`s release of its new product offerings, the iPod Shuffle and the Mac Mini, aimed at the PC home user market.
The Core Group executive director Rutger-Jan van Spaandonk says the move follows the company`s December appointment as an Apple independent marketing company, which makes it a "virtual subsidiary".
"This means all of Apple SA`s responsibilities will be transferred to us and the local representative office will be closed."
Van Spaandonk says this will have a profound impact on Apple`s retail strategy, which will be explained to Apple centres and independent retailers at a conference in February.
"We are looking at a model that is similar to the one being used by the automobile industry. The car manufacturers largely own their retailers and every retailer for a particular brand looks exactly the same. Eventually the physical distinction between the various Apple resellers will disappear," he says.
Winds of change
<B>CORRECTION</B>
It has been brought to our attention by Garren James of C3, an authorised Apple centre, that there are in fact four Apple centres in SA and not three as reported in this story. The Apple centres are: C3 and Cool Apple Buddy in Johannesburg, and Digicape and Project 3 in Cape Town.
For more information about Apple centres, go to http://www.apple.com/za/buy/applecentre/.
There are three Apple centre resellers in SA: Apple Buddies in Sandton, and Project 3 and Digicape in Cape Town.
Digicape director Robin Olivier says The Core Group`s appointment as an independent marketing company is in recognition of the work it has done to promote the brand.
"Largely because of them, and companies such as ourselves, the Apple market has seen more than 40% growth during the past three years."
However, Olivier feels The Core Group will face three major challenges: stock availability, pricing (compared to other similar countries, SA`s prices are still too high), and reseller channel support.
"We always suspected they would open their own stores. Unfortunately that puts us as a reseller in direct competition with the distributor," he says.
Resellers complained last year when The Core Group opened its online sales site, which sells equipment at about 3% cheaper than they do. This, and the fact that the Apple centres have to fund their own stores, has put a squeeze on their margins, which should normally average 7% to 10%.
Project 3 co-owner Alan Goldberg says of The Core Group`s appointment: "They have invested a lot in brand awareness and this is their reward. However, if they directly enter the reseller arena, they will find it very different from supporting a consumer to supporting a company. Companies still buy 80% of Apple equipment."
Goldberg says product availability has to be addressed, although he does understand some of the issues surrounding it. He also feels Apple`s prices have come down considerably during the past year.
Product pricing
Van Spaandonk says Apple`s new products, the iPod Shuffle and the Mac Mini, should be available in SA at the end of February to beginning of March.
Preliminary pricing for the iPod Shuffle should be around R754 for the 512MB model and about R1 133 for the 1GB version.
The Mini Mac should cost about R4 176 for the 1.25GB system and R4 959 for the 1.4GB version. This system excludes keyboard and monitor.
BMI-TechKnowledge director Mark Walker says while Apple`s home user product offerings seem good, the company may face stiff competition when the Linux open source software boxes are released later this year. These are expected to retail for below R4 000.
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