Apple is a hardware company, and one with high demand for their products. They walk a very tight rope balancing their own sales with that of their channel partners. And when it comes down to lower margin/cost items, any sort of discount, even $10 on an iPod, can make or break sales.

Indeed, it is a very slippery slope they tread upon.

John assigns too high a value to price for consumers who are more dedicated to particular channels. When an Apple Store customer asks an Apple Store manager to match the price of a competitor, the customer is saying that she would prefer to buy from the Apple Store. If price were the most important factor, the customer would just buy from the other channel.

Costco, in particular, has nothing to worry about. Costco offers its shoppers a particular shopping experience, that includes a very liberal return policy. Many of Costco's shoppers do their primary shopping for everything at Costco, trusting the company's buyers to present them with great value and selection.

And consider refurbs... No way any retailer can compete with the prices of Apple refurbs. But those appeal to a very specific kind of customer -- the one who doesn't mind scratches and dings, and who might not buy at full price anyway.

John, undercutting channel partners was an issue when the dealer network was small shops who actually had enthusiasts and experts on staff to "sell" the products. iPods and computers are commodities now, and Apple is footing the bill for the stores that have the experts available. Those stores ought to be allowed to compete too.

Anybody who has sold Apple hardware or software has had Apple screw them for the past 10 years. If you are a consultant and convince a company to switch to Mac, and sell them 10 Mac's, you can count on that company getting a call a week later from an Apple rep telling them if they want to buy any more hardware, to phone the rep directly for a discount. Every time.

Which is why you don't even prepare a quote on store.apple.com with your customer's information. Apple routinely goes through these and calls them to see if they can get the sale directly. That's why I put my information on there with a throwaway email address. If Apple "follows up" then they get me and not my customer.

Let's not forget the many Mac-specialist stores that have disappeared or are hanging on in spite of unfair competition from Apple. Specifically, New York's Tekserve, which has supported Mac users in good and bad times. Their excellent suppoort has saved many a user. Now Apple looks like they are opening a store near them in the neighborhood. Just not fair, IMHO. I was manager of MacEmporium back in the late eighties, located close by, and was happy to refer people to them. David Lerner and his staff are wonderful people and I still refer people to ?hem But how long can they survive with Apple, basically stabbing them in the back? Would be a sad thing for them to be forced out.

Bill Gore
Hey Mac!
NYC

There is some good Mac shops, including Tekserve. As a whole, however, the Mac third party retailer market almost buried Apple. For every Tekserve, there were many more Sears like experiences including in the independent world.

In my view, Apple taking control of it's own customer experience is one of the smartest things Apple has done. Imagine if Apple was still relying on now defunct CompUSA. Moreover, Apple is able to be more cost competitive with PC competitors because it isn't splitting it's profit in half as much. Car companies should do the same.

I do not think Apple is competing unfairly. For instance, it is not undercutting retailer's sales. What I do think is unfortunate is that companies like Tekserve probably would never have invested in selling Macs if they knew they were going to have to compete against Apple itself. Yet, Apple gave the retailers the opportunity to sell Macs. The shops combined weren't effectively advocating the line. Apple had to change strategies. It is sad some of the good shops might fall, but I'd prefer that to Apple itself failing. As an Apple customer, I am happy Apple took matters into it's own hands. Nonetheless, as a person, I certainly feel some pity towards those good Mac shops.

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Guest wrote:
Let's not forget the many Mac-specialist stores that have disappeared or are hanging on in spite of unfair competition from Apple. Specifically, New York's Tekserve, which has supported Mac users in good and bad times. Their excellent suppoort has saved many a user. Now Apple looks like they are opening a store near them in the neighborhood. Just not fair, IMHO. I was manager of MacEmporium back in the late eighties, located close by, and was happy to refer people to them. David Lerner and his staff are wonderful people and I still refer people to ?hem But how long can they survive with Apple, basically stabbing them in the back? Would be a sad thing for them to be forced out.

Bill Gore
Hey Mac!
NYC

As a customer, price matching never impressed me. My view has always been that I might as well get it at the advertised place if all I get by going else place is the same price. Now if you beat the competitor's price, that is something else.

Nonetheless, I'd never buy a Mac from anywhere else but Apple. The experience (and price if you are a student) just isn't as good anywhere else.