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."

Comments

Colored Logo

[bjb]

I remember seeing this store the one time I drove to Apple in Cupertino. It was my first time in California (I'm a NYC native), and while driving down from San Francisco through the Valley, I was given the choice of one place I could stop and be a geek for a few minutes. Cupertino. Apple.

I was so thrilled to be there, though I had just missed the 5pm closing time of the gift shop, so I could only drive around in an infinate loop ;-).

Anyway, I remember seeing this Apple dealer across the street (well, go out the front of the complex, make two rights, and make a sharp left across the street). They had a large colored Apple logo (the old "rainbow" style, which I am sentimental for), even though every other Apple symbol around was the new metal/steel/aqua or whatever they call it. I found that strangely comforting that even though Apple changed their logo, their old one was always staring them right back into the doorway of the gift shop. I was glad they didn't change their sign.

Anyway, silly nostalgia and memories.. go back to your own business..

ComputerWare

[Stigmata669]

was in trouble long before the Apple retail stores opened. They weren't making enough money to even keep their Palo Alto store open... It's a Radio Shack now and has been for a few years.

Still, it's sad to see small retailers go.

Re:ComputerWare

[chia_monkey]

Sadly enough, it doesn't really surprise me. I lived down the street from the Capitola store and was always annoyed that they didn't have a website. A simple thing like that could have helped draw customers to that location instead of having to drive over to the Apple Store over the Hill. It WAS fun having new Apple stuff within walking distance. They just didn't have decent business sense.

Re:ComputerWare

[Anonymous Coward]

My problem with their complaint is they're only putting forward one possible explanation for their failure. The Apple Stores are a stunning example of what to do right in a store. Computerware in the last few years have been run by a dodgy unhelpful group of people not interested in customer service, or bringing people into their store. That makes all the difference, even before issues like stock availability. I doubt it would matter how Apple handled them, they would have went out of business just as quickly the way they were being run.

Truth be known, if I were Apple I'd want stores like ComputerWare to be as far away from my name as possible, they certainly don't do it a service.

Re:ComputerWare

[Anonymous Coward]

I can't comment on the contract issues between Apple and Elite since I have no knowledge of them but I think there are many other factors at work in this situation that would lead to the closing of the Elite stores.

First, Computerware went out of business once before. They had a reputation of having helpful, well informed, sales people but very high prices in an extemely competitive market. Typically, they would sell ALL of their products at MSRP, this includes video cards, USB hubs, software, etc. You gotta keep in mind that they were a retailer that had several Fry's Electronics, CompUSA, and a MicroCenter, all less than ten minutes away in any direction from many of their stores (except Capitola). Each of these companies sells Apple computers and has a huge selection of peripherals and software, many work around the Apple MSRP by offering specials on other products when you buy an Apple computer. Computerware did not and subsequently went out of business.

Elite then bought out Computerware and implemented EXACTLY the same business model. Add to that the extremely high rent for commercial property in silicon valley over the last few years and you have a recipe for miniscule profit margins. To their credit, Elite re-hired many of the old Computerware staff but the high prices made it a place to buy only as a last resort. I remember going in there to buy a Radeon 9000 video card. They insisted on selling it at full retail so I went and bought it at Microcenter on sale and saved over $40. On another occassion, I went to buy a second battery for my G4 laptop and they had it sticker priced at $149 and marked down to $139 when I can buy it anywhere else (not just Apple) for $129 and this was after they had already announced that they were going out of business.

I am still unhappy to see them go since I think that fewer Apple retailers, even if they are high priced, is a bad thing but I don't think that the owner can blame Apple for all of these factors. He took a gamble on a failed chain, implemented the same sales plan, and expected a different result.

Re:ComputerWare

[happystink]

They definitely do grab all the best stuff for themselves when there's a shortage, I actually bought the imac I'm writing on now from an apple store 3 hours away from me a few weeks after it came out because it was the only place that had any in a 3 hour radius. All the local stores were saying they wouldn't have any for weeks and there were articles on cnet, etc. about the shortages because some retailers accused Apple of only shipping them to the Apple stores. So, I phoned the nearest Apple store, and sure enough they had tons of them, so I drove there the next day and picked one up. I dislike Apple for doing it, but what can I say, I am impatient ha!

Re:ComputerWare

[TeamSPAM]

You are correct that Dell has a monopoly on Dell computers as only Dell sells them. So there isn't a question of Dell favoring their retail arm over other retailers. I'm still waiting for proof that Apple is guilty of favoring their retail stores.

Re:So Microsoft is not a monopoly?

[Anonymous Coward]

You are confusing legal definitions with dictionary definitions. OJ may have killed his wife but he did not murder her. Se how simple it is.

Everything's Apple's Fault When Things Go Wrong

[GurgleJerk]

I happen to live within just a block of one of the ComputerWare stores and have watched it go out of business twice. The store did fair business. In visiting, there had been no time in the past several years that I was the only one in the store, and it was often crowded. If they didn't make money, it's because it was run poorly. They were always busy. Another local Mac shop had/has the same amount of foot traffic and remains open.

But let me also tell you a story of another place where I've lived, the Pacific Northwest. My family purchased three Apples (IIc, Mac SE, IIgs) over time from a chain called "The Computer Store." which has been in business there since the early eighties, and now is called "The Mac Store." They did a great job of presenting Mac in a clean and professional retail environment with knowledgeable salespeople. They probably still do.

The point is, that in opening retail stores, Apple initially opened bay area stores in Santa Clara and Palo Alto. That was the original plan, and it was fair. They put one near Apple's campus in Cupertino and another in a well-travelled shopping district in an affluent town.

But - they didn't put any stores in Oregon or Washington. Why? The Mac Store chain is doing very well selling Apple products, with satisfied customers. There was no great need for Apple to go into those areas. Apple just recently opened a Seattle-area store, and will likely go into Portland at some point. But they are being very careful not to but The Mac Store in trouble. They couldn't be more respectful of The Mac Stores' ability to stay in business.

In the Bay Area, ComputerWare was the only Apple chain, and when they went out of business (the first time), Apple suddenly a store into Emeryville (near Pixar HQ) and announced Burlingame and Walnut Creek stores. It was a solid, sensible move to retain customers. All the sudden here comes Elite, which had never given Apple much trouble before, and they spend tons of cash to rebuild the ComputerWare chain, putting stores into the same markets.

I never understood it - why would you invest so much money in competing with Apple in retail? Well it was pretty obvious that Apple was going to win that war, just on brand recognition. How could Elite ever earn the investment back selling low-margin Macs? They knew very well what they were getting into. Forget "unfair practices" - the ComputerWare stores were doomed, and Elite should have known it. It was a stupid move. Whatever they're claiming now is just legal cover for investors and future lawsuits.

This hurts Apple

[Anonymous Coward]

I can't believe what I'm hearing: "It's Apple's perogative to smash anyone trying to sell their products." While I'm sure this has advantages (price control and to maintain limited resources), it also can't help push sales! It seems less and less companies are selling Apple products. While you could argue that web + Apple Stores will fill the gap, I'm not so sure. The question here is exposure. At some point, we'd all like Apple and PC's to get equal shelf space (or more) in any heterogenous computer store, right? That is never going to happen is Apple treats it's resellers like this.

Many years ago I set up a reseller in Mexico. It was such a pain to sell Apple's stuff, that I just switched to selling PCs. Is that what we want every Apple seller to do?

I hope Apple starts correcting the problem. They must, unless they really are happy with the "elite" computer buyers willing to make a special effort (to switch in the first place, or even to drive out of their way) for their products and the 3% market share that implies. If that's true, I guess then their advertising and prime-time spots are wasted. Wasn't Apple the computer for the rest of us only a few years ago? The point being, Apple has got to match the availability of its products with it's wide public appeal due to it's superior design and ease of use. Limiting the purchase-points (especially in this back handed kind of way), is not the answer. If Apple Stores need an advantage over other non-Apple stores selling their own stuff to the point of running them out of business, something is wrong. I can't be sure if it's a good strategy for Apple, in the long run. Can't have an Apple Store everywhere, can we?

I'm curious to see how this pans out. I think Apple should be wooing resellers galor, the more people selling Macs (in a knowledgable, fair way), the better. Many who are "sold" on Macs already are the bread and butter of Apple stores. (something like 50% of Apple Store purchasers already own Apple products). So more people buying Apple products -- anywhere -- is a good thing, right? Right???

remembering computerware

[ivgm]

Beyond the economics or other consideratons of the validity of CW , I remember fondly working at the old California store when, -on the weekends, bus loads of japanese tourists would unload and shop there (at the time we only sold software and peripherals) -folks like gase, hertzfield, smith, levitus, bushnell would frequent and shop -we had guys (and some gals) who really new the SW and could match the needs of the user with the best product. (tim, yugi, steffan, etc) -Saturdays would be an absolute zoo because of how many people were packed into the tiny store. economies shift, business decisions are made, life goes on. Working there, early in my carrer, was really fun. RIP

Bwahahaha

[The Bungi]

I loved reading the responses to this story. It doesn't get any more apologetic than this. Yet if this was Microsoft strong arming someone - or even the mere impression of them doing so - this would have been plastered all over the front page (instead of conveniently hiding in this section) and would have thousands of "insightful" posts explaining -yet again- why "M$" sucks and why Bill Gates is the Great Satan. We'd get the usual treatises on monopoly law, quotes by open source developers who've had to resort to eating garbage to survive due to Microsoft's unfair business practices, "All Hail Linux" posts, etc, etc, and ad nauseam.

This Slashdot double standard towards Apple is just mind boggling.

comparison

[YllabianBitPipe]

I remember shopping at the SF ComputerWare store (before it went out of business) for an iBook and it was a totally pleasant experience ... helpful people, no strings attached, all my questions answered and no hard sell. I liked shopping there. Was sad to hear that store was closed. I have no experience with the Elite Computers version.

Compare this with my recent trip to the Palo Alto store to buy a new iMac. Great store, great look, great browsing experience, but watch out if you actually want to buy a computer. The sales guy pulled out every add-on in the book, MS Office, AppleCare, an iSub, a printer, .Mac, sheez. I must have said "no, I just want the comptuer" five or six times.

I know times are hard in retail but that sure left a bad taste in my mouth. I still go to the Apple Store to browse but from now on, I'm buying my hardware online. No more pesky retail clerks to deal with.