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ComputerWare/Elite Chain Throws In The Towel
An anonymous reader writes "ComputerWare, a ComputerLand-like chain of stores specializing in Apple computers, went out of business in 2001. Thinking he sees an opportunity for expansion, the guy who owns Elite Computers, the long-time independent Apple computer store literally across the street from Apple HQ in Cupertino, bought the CW name and leased and reopened the SF Bay Area stores as 'ComputerWare by Elite Computers.' In 2003, Mr. Elite realized the reason the original ComputerWare owners got out -- Apple's engaging in 'unfair competition' -- and announced he is closing the chain along with his original store."
From the article, I can't comment on what things were like before Apple opened up its retail stores, but the business was purchased by a company doing pretty well until they touched this. If the allegations are correct, and Apple shipped product to its own stores significantly in advance of competitors and then used registration to lure customers to the branded stores, then this smacks of anti-competetive behavior. Apple may not have a monopoly on desktops, but they do have a monopoly on Apple products. By selling their products both in their own storefronts and to competing storefronts, they need to be treating both as equal stores. Otherwise, there could be legal repercussions, like this one.
Now, I'm not convinced yet, but I want to see how this pans out.
Some may think so, but I certainly don't. The thing you're overlooking is that the usual company we bash for unfair business practices is not only notorious but infamous for using them, so when a new instance is announced we don't feel the need to check over the facts yet again before rendering our judgement. They've used up all the chances we're willing to give them.
In this case, we have a business not really known for unfair business practices. They may have done a few unfair things in the past, I really don't recall, but most businesses have. Nobody's perfect. The point here is that I don't recall them, and therefore they don't have the reputation of being rabidly monopolistic.
What it boils down to is simple: I don't recall Apple doing this sort of thing recently, therefore I'm willing to reserve judgement until I see how they respond.
If Microsoft wanted to do that, that's perfectly within their rights. Apple can't be troubled to support every damn type of hardware or architecture out there, and no one can force them to. It's the same as Texas Instruments not letting Casio license their (arguably) superior calculator software, or Kodak not licensing the operating system of their cameras to other companies.
Irix only runs on SGI hardware. Boo hoo. It's hardly anticompetetive. It's just far easier to support, not to mention that Apple is a hardware company and selling machines is how they make money.
Every once in a while I like to masturbate a new word into my vocabulary, even if I don't know what it means.
From the article: Mr. Armes says Apple delivered new products to its own Apple stores as much as a month before they would ship any to him. "We didn't get as much product as the Apple stores, and we got it later than the Apple stores," Mr. Armes says.
I don't see anything unusual about this. Apple has very strict price controls on its products. The reason why it puts them in its Apple Stores first could be to get the product out there in the market in case other retailers balk at the high prices.
We can be sure that Macs will probably never be seen at places like Staples and Office Max because they would not be allowed to put the product on sale. This is why when we do see Macs at larger stores such as CompUSA and catalogs such as MacZone, there are always special offers of extra stuff like printers ans scanners and the like. That's the only way for an Apple retailer to compete with the Apple Store.
It's not Apple's fault. Steve Jobs didn't force "Mr. Elite" to become an Apple retailer in the first place. Every type of "dealership" has its caveats because it has to follow a certain set of rules governed by the manufacturer of the product it sells. I say: "buy one directly from Apple's website." I bought my 17-inch PowerBook there. I was fast, easy, and I got my extra RAM put in by an Apple technician! What more could you want?
Mr. Bond, they have a saying in Chicago: Once is happenstance. Twice is coincidence. The third time is enemy action.
Apple products are developed and produced by Apple. It's their business (literally) and if they want to sell their products in Apple stores only, they are free to do so. You can argue it's not fair or whatever, but it is up to Apple to decide who sells their stuff. So, in a way, they mind their own business.
>Apple may not have a monopoly on desktops, but they do
>have a monopoly on Apple products. By selling their
>products both in their own storefronts and to competing
>storefronts, they need to be treating both as equal stores.
>Otherwise, there could be legal repercussions, like this one.
What?!? By this definition of "monopoly," every company has a monopoly on all its own products. This makes no sense. What legal repercussions? Unless Apple signed an explicit contract with these guys, promising equal access to their products, why shouldn't they be able to ship first to their stores, for example? I'd certainly like to know about the grounds of Thomas Armes' "unfair competition" suit.
Could someone with more legal knowledge than I comment on this?
"Science is a tribute to what we can know although we are fallible" -Jacob Bronowski
I agree that it would be foolish to think that it's okay for Apple to use unfair business practices and bash M$ for the same thing. However, the Elite comments must be taken in context. The assertions made by Elite may be inaccurate. Even if they are accurate, there may be reasons that Apple did not ship as much product in as timely of a basis as they did to their Apple stores. Such reasons might include payment history, past sales experiences with selling their leading-edge products at the Elite locations, etc. I'm not naive enough to think that Apple would never engage in unfair business practices, but the allegations must be proven before we go off on apple for stifling competition.
Anyone take any life saving courses? Sometimes you can't save the person in trouble and it's better to have one victim than two (person in trouble and would-be rescuer). It sucks. It's not fair. Welcome to the real world. I think we are in a similar situation here.
I know some true believers are going to get upset but face it; Apple is in a life and death struggle. They are not as close to the edge as they were in previous years but "beleaguered" status is never that far away. The Apple Stores, IMHO, are an important part of Apple's long term strategy. Maximize profits by cutting out the middle man. As Apple is forced to cut its profit margins this becomes critical. On top of this these stores are incredibly important marketing tools. They are very strategically located and the couple I've visited always seem to have a lot of foot traffic. People may not be buying but they are getting the sense that Apple is a viable option today and not just a historical footnote. These stores are far more valuable than super bowl ads.
If it is necessary for Apple to screw small independent dealers in order to ensure its long term survival then so be it. If Apple were to become further marginalized and lose its image as a viable alternative these dealers would get screwed anyway.
While I recognize the right of Apple to dictate conditions & practices to their resellers, I think Apple is being short-sighted by scaring off resellers like this. Agreements not allowing recompense for damages, and preferentially releasing product earlier to their own stores is clearly creating an unfair competitive situation favourable to Apple Retail, something which Apple said they would not do when they announced their retail store strategy 2 years ago. Sure, it means more business will go to Apple Stores and Apple online, but there is also a cost invloved: fewer people in the market to promote Macintosh products. One example is that Elite and other resellers are/were able to get into vertical markets in a way Apple would never have the resources to pay attention to.
While deprecating resellers for company-branded stores may result in a short-term finacial gain, I think it's poor long-term strategy for the overall health of the platform. Note to all you people out there saying "Slashdot has double standards with MS!" it's not the same, since
And frankly, it's not Apple's fault that Elite sucked. The number of complaints from their (ex)customers I've heard about them is astounding. Their management decisions, sales tactics, and repair records are all the explanation I need for their failure.
I've worked at an Apple Specialist before, who realized that the Apple Stores interact with a completely different market, and that there are entire market segments almost exclusively available to Specialists. They've continuously grown and become the largest and best Reseller / Specialist / Service Provider within a good 100 mile radius. Yes, there was a supply shortage when the new iMacs rolled out.. yes, MacWhorehouse and a couple of the newly opened Apple Stores got a handful of units before we did... but we still got the first stock in the county.
Every Apple Specialist and Reseller has a rep who covers a certain territory and takes care of "his stores", the shops in his area. Ours ROCKED. Totally on top of things, took care of ordering issues, advised about ways to improve store operations, suggested places to get additional income (it's all about the service department, baby!), helped the store plan out long-term strategy, and always was checking in on how the store was doing.
If Elite hadn't been a shady operation and had run themselves well (As ComputerWare and a number of other successful Apple Specialists have), worked cooperatively with their Apple liaisons, maintained a better-trained staff base (rather than paying them a crappy wage + dinky comission.. I interviewed @ one of their stores once and took another job), paid attention to the market and where Apple was opening stores, and only re-opened Computerware stores in GOOD locations, things might have turned out differently.
Well, I believe the US has a little law called 'anti-trust', which states that you can not use a monoploy in one area (such as producing Apple hardware) to gain a monopoly in a new area (such as selling Apple hardware). I seem to recall a case involving a software company a little while ago using this law...
I am TheRaven on Soylent News
As much as I regret saying this, I suspect that may be correct.
Apple has always been known for being friendly to the little fish, mom-and-pop Apple stores around the country, and individual users alike. Lately, however, they've gone a bit kamikazee on their closest allies when it comes to store fronts.
Granted, many Apple resellers out there are sub-par in presentation and product knowledge -- this is why Apple's own stores are doing so well. Apple Store reps can tell you anything about anything (or find out), and their store design and placement are the best in the industry.
Unfortunately, this means the little guys can't compete. I love the Apple Stores, but it means the end of independent, store-front resellers very quickly, and that is detrimental to the entire platform.
Within about 3-5 years (assuming that much "beleaugered" Apple doesn't bite the big one first), I expect that Apple will only have independent resellers in education and online.
Is Apple becoming another incarnation of Microsoft that just happens to give the users what they want, but will wind up holding all the keys?
Here's hoping not... (Roll the empirial march...)
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"Cogito Eggo Sum: I think, therefore, waffle."
I'm going to be devil's advocate, and say that maybe the sales person was the problem. Used to work at CompUSA or something. From previous comments, it seems that this isn't necessarily the way they worked. Who knows; maybe he had a review that morning and got 'you haven't had an add-on sale all month' or something.
As long as you have one nearby, I'd say just give it another try. It's a couple of bucks in gas vs. shipping and whatever else comes with online orders. Yes, sometimes there is free shipping/add-ons/whatever. My point isn't simply the money, it's to not judge a store by one employee. "One data point does not a line make."
R: That voice. Where have I heard that voice before? B: In about 365 other episodes. But I don't know who it is either.