Apple MD Headed for the Big House?

For those that don't know, Tony King is currently the Managing Director of Apple in Australia. He has presided over a massive change in the way that Apple does business in Australia, not all of it good.

Apple has been incredibly successful in the last few years, but at what expense? The ACCC (Australian Competition and Consumer Commission) has recently announced that it will be going after big companies that use their market power to crush smaller companies in the same market. There are many instances of this happening in the Mac market in Australia, and I'll cover just one today.

History: When Tony King took over at Apple he came and visited a few resellers to find out our pain points. I clearly remember telling him it was ridiculous that we couldn't sell to education customers, and I know a lot of others did too. Some time later it was announced that we'd be able to sell to some education customers under strict conditions. It never became a large proportion of Total Recalls business, however it was nice not to have to turn people away just because they qualified for a discount!

Fast forward a year or two, and everyone knows that one of Australia's largest reseller chains is using some creative bookkeeping to buy more discounted machines than they are entitled to. This spreads far and wide, but Apple either can't or won't investigate and punish the transgressors, so they just announce that the scheme is over, and many people will only be able to get the education discount online. We now know that they can and will punish people for breaking their reseller agreements, so why not do it back then when the problem was fixable?

At the channel conference where the death of the scheme was announced, I overheard a conversation when another reseller spoke to Tony King. Reseller 'you can't do this, surely your reseller business is worth more than the business you get from mass merchants?' Tony King 'not by next year'. It's pretty clear Apple has been planning to get rid of their traditional channel for some time.

Could it be that they wanted to direct as much business to the website as possible, more margin for themselves? By the way, it is now easier than ever to scam the system- try ordering something at education price online and see if you get asked to supply ID (resellers were required to ask, and take copies). Apple states on their Education Store website-

'Purchase Quantity
Faculty, Staff and Students purchasing from the Apple Store for Education Individuals will be allowed to purchase the following quantities of product per academic school year:

Desktop: One (1) may be purchased per academic year
Mac mini: One (1) may be purchased per academic year
Notebook: One (1) may be purchased per academic year
Display: A maximum of two (2) may be purchased per academic year
Software: A maximum of two (2) per software title may be purchased per academic year
Apple TV: There is no limit on the quantity of Apple TV purchases per academic year
iPod: there is no limit on the quantity of iPod purchases per academic year'

Try logging on and see if you can order more than this- you can. In direct contravention of their own policy!

These actions are not only against their own policy, they're anti-competitive. Hello Graeme Samuel!