Dell, Fry's, Micro Center All Sign Back Up With Apple

by , 1:00 PM EDT, April 16th, 2003

The rift between some retailers and Apple has begun to close, according to C|Net. The rift made itself known earlier this month when it was reported that Dell, Target, Fry's Electronics, Micro Center, and other prominent retailers had refused to sign a new reseller agreement with Apple. Though Apple later down played these resellers as only contributing 1.5% of Apple's 2002 sales, more than US$86 million according to TMO's math, it would seem the company went back to negotiating anyway. From the C|Net story:

Among the holdouts that have reached a pact with Apple are Dell Computer and regional computer sellers Fry's Electronics and Micro Center, according to a source familiar with the situation. As of Wednesday morning, the iPod had not reappeared on Dell's site, but a Dell representative confirmed that the Apple music players should be available again shortly.

Although some resellers have still not signed Apple's new contract, Apple said the amount of sales represented by such dealers had dropped significantly.

In a statement to CNET News.com, Apple said that those resellers that have not yet signed deals represented 0.3 percent of Apple's sales in fiscal 2002. A week ago, the resellers that had not signed accounted for roughly 1.5 percent.

At 0.3% of 2002's sales, the holdout retailers still represent some US$17.2 million. Note that Target is not listed as one of the resellers back on board with Apple. You can find more information in the full C|Net story.

The Mac Observer Spin:

Oh, to be a fly on the wall in the negotiations between Apple and Dell. Actually, any of these negotiations would be a rather tasty affair, but it's doubtful that we will find out any time soon what sort of give and take there was between the parties.

Be that as it may, it is a very, very good thing that Apple has been able to find agreement with these retailers, especially Dell, Fry's, and Micro Center. Each of these companies offers exposure to Apple's products that the company would not otherwise have. Fry's and Microcenter both have outlets in markets not serviced by an Apple Store retail location. Dell, of course, shows the iPod to the biggest market of all, the Wintel market, from within one of the biggest chunks of that market, Dell's own.

Remember that though these resellers represented some 1.5% of Apple's 2002 sales, a huge number in reality, Dell only began selling iPods in October of 2002, which wasn't a part of Apple's fiscal year. That means Dell's chunk of that missing 1.5% actually represents a much, much larger share of Apple's revenue than it might seem. Dell is a very important retailing partner for Apple when it comes to the iPod on the Windows side.