Commentary: Apple and AT&T Independent Resellers Unite!

There was a time, when buying a Mac meant a trip to your neighborhood independent Apple reseller. Just about the time Apple decided to take matters into their own hands and open their own stores, the cell phone industry exploded, thanks in no small part to the growth of independent cell phone providers. All of those kiosks in malls and standalone independent phone dealers add a substantial amount of revenue for AT&T each year. Many offer contracts with different carriers. What better way to get them to get more customers onto your service than to arm them with the most sought-after cell phone around?

Instead, these dealers are left with the unenviable task of talking down the benefits of the iPhone to get customers to purchase a different phone. Even though there are still no superior phones to the iPhone yet, more and more decent touchscreen competitors are springing up. And guess what? They aren't on AT&T's network. So in essence, you're making your own resellers push customers to competitors.

Let's go back to the Macintosh resellers for a moment. These are stores who have stuck through thick and thin with Apple for years and years. They did the heavy lifting for Apple, taking the time to fight the hard fight, to give the best, personalized service, and to evangelize, from the heart, about why the Mac was better. It could be argued that these days Apple gets far more revenue from their own stores than these resellers, so therefore they aren't important. Well, guess what? They are important. And the proof? Well, they're still standing. All those years of building customer relationships continues to pay off. Even as Apple continues to open more and more flashy stores, there is a base of customers who continue to buy products from their tried and true reseller. Maybe the local Apple Store is too far away. Maybe people don't want to brave a mall just to ask a computer question. Maybe the jig is up, and people realize that getting a knowledgeable genius in an Apple Store is really hit or miss these days. Whatever the reason, People still choose resellers.

There have been fundamental clashes before about how products were being distributed, with some feeling resellers were getting shut out. Eventually though, (some) product would arrive. It's a far different story with the iPhone.

I cut Apple some slack on this issue with the original release of the iPhone. After all, it was a new product, and a small(er), controlled rollout could be justified. We're over two years in now, and there's no justification beyond greed. We know the phones can be activated at home, why not allow more people to sell the phone. And with the announced deal to sell the iPhone in Wal Mart, doesn't that shoot the whole theory that this is about controlling the point-of-sale experience? We've visited two Wal Marts (and will continue to do so) and have yet to find a person who could tell us about the phone, or even a working demo model.

The Apple and AT&T resellers would both show far more passion and knowledge in selling the iPhone. It is inexplicable these two groups, who have shown their loyalty to their respective corporate gods, are unable to sell a product they want to sell and could sell with far better enthusiasm than Apple's current third-party iPhone providers. I hope Don Mayer at Small Dog Electronics is right. In his predictions for 2009, Don predicted that "Apple will allow its top independent resellers to sell the iPhone." It's the right thing to do, and way overdue.

Image: Movietonic.com

Apple and AT&T keep the spoils from the little guy

Quick, what do Apple resellers and AT&T independent dealers have in common? Answer: Neither can sell the hottest product from the company with whom they've pledged their allegiance.

For years, Apple resellers have watched the constant march of Apple-owned stores into their territories. To be honest, there were/are a lot of independents that couldn't match the experience and know-how of the Apple Store. At the same time, there are/were many dealers who've devoted years cultivating a user base, and giving excellent service. Some have survived. Some, like Boston's Tek Serve have watched Apple move in literally next door.

Next, you have AT&T. From day one, the iPhone has only been available from Apple Stores or AT&T-owned stores. This left many AT&T resellers in the dark, and probably with a bad taste in their mouthes. Imagine you're an independent business owners, allied with AT&T. Each day customers ask you about the iPhone. You don't have any to sell, and any positive remarks will result in a sale for someone else. This puts these owners in the awkward position of either painting the product in a negative light, in hopes of remaining in business, or to be honest with the customer regarding the features the iPhone, and risk losing their business.

The line from Apple and AT&T has been that they need to be cautious of unlocked phones being sold. Why one model of phone is the only one to rise to this level of concern by AT&T is questionable. Sure, it's in high demand, but it's still a tiny part of AT&T's overall phone sales. If unlocking was the real concern, why sell any phones through third parties at all?

Today comes word that Best Buy will sell the iPhone starting in September. The phone will be available in all Best Buy locations within AT&T service areas. You'll recall this is the same Best Buy that's on year three of rolling out Apple computers in less than half of their locations so far.

The bottom line is, Apple/AT&T want to control as much of the pipeline as possible, from the iTunes app store as the sole source of applications, to the shutout of resellers and independent dealers, while working with Best Buy, a company with no loyalties to either company: Rest assured that if Verizon had a phone far superior to the iPhone, Best Buy would try for that exclusive as well. Why not make the distribution as wide as possible? Both Apple resellers, and independent AT&T dealers should be able to carry the full product line. Imagine going car shopping, let's say for a Ford Mustang, and having your local dealer tell you that model is only available from a Ford-owned dealership. (which as I understand it, doesn't exist. Hmmm.) Of course given the economics of the car industry right now, it might not serve as the best example. Still, it seems if you can reward loyalty and expand your distribution points, that's the most logical thing to do.

Exclusive: Apple using campus flyer campaign, undercutting resellers?

Anyone who's been to a college campus has probably seen the sea of posters and flyers posted for things like Semester at Sea, Roommate Wanted, used textbooks, etc. Well now Apple, known for classy, minimalist ads has entered the campus flyer fray. The flyer pictured above is from the campus of The University of Pennsylvania. It is a professionally made flyer (with perfect perforations, pre-scored) intended to mimic the look and style of those other signs around campus. Each tearoff directs you to www.apple.com/go/campusoffer which then re-directs to the Back to School offer on Apple's site. If you can't see it, iPod cleverly features the facebook app. Also in the bottom right is the marketing material number: L370509A-US

While Apple is certainly free to try this type of marketing, it is troubling because Penn also has its own computer store, offering Apple education discounts. Let alone the fact that on many college campuses, you are forbidden from posting these without permission. Did Apple seek permission first? Who posted them? How many campuses are these on? And how effective can they be in the summer, when most students are away anyhow?

Apple did not reply to a request for comment sent yesterday.