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The New Apple Store Next Door

Michael Oh, president of Apple reseller Tech Superpowers, was forced to make some quick changes to his business model in response to the opening of the largest Apple store in the United States just 50 feet away from his own business. How should channel partners react when vendors hone in on their home turf?

May 19, 2008
By Jeff Goldman: More stories by this author:

The point, Oh said, is that even if Apple were to step in and start targeting business customers directly, there would still be room for a company like his. “They would play to the bigger enterprise companies… but for us, the bulk of our business still comes from 10-, 20- or 50-person companies. No matter how big Apple gets as a direct seller to business, they’re simply not going to have enough coverage of all of those little businesses to take away that part of the pie.”

Apple didn’t respond to requests for comment. However, Oh believes nothing he’s saying is intended as an indictment of the company. “We’re happy with the margins that we get, we’re happy with the support that we get, and in some cases, they’re very communicative with us about what’s going on,” he said. “It’s just the Apples stores which function, it seems, almost like a separate company.”

Oh added the manager of the new Apple store did stop in and visit Tech Superpowers about a week ago to discuss how the two stores could help each other with referrals for service and for out-of-stock items. But the fact that there was no communication from the company itself throughout the two-year construction process was frustrating. “It really would have helped to have a little bit of cooperation from a partner and a vendor who’s so important to our business… organizationally, there’s just a big line between the retail division and the channel side,” he said.

As a result, Oh finds himself thrilled with one part of Apple’s business – and simply shut out by the other part. “The channel side of their business is better than it has ever been in terms of programs, in terms of support, and all those things,” he said. “But then you have the ‘other’ Apple, and I’m frustrated with them, simply because we have no information, and they’re spending x millions of dollars putting a store in right next to us without any official acknowledgement that they’re doing it… I’ve had conversations with people on the channel side, and they couldn’t confirm anything about the store’s presence or when it was coming in or any of that stuff because that’s basically a completely separate business."

Looking forward, Oh is optimistic about Tech Superpowers’ new focus on everything from business customers and onsite services to data recovery and laptop rentals. And he’s simply resigned himself to the dual nature of his relationship with the company. “It’s two different Apples,” he explained. “The one Apple that we can deal with, we love. And the other Apple that we have to deal with, we’ll make sure that our business is complementary to it in every way that we possibly can, and hopefully that cooperation will work. And that’s the best that we can hope for.”


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TAGS: services, consumer, enterprise, Apple Store, reseller



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