Apple sued by dealers
- Thread starter Viro
- Start date
diablojota
Doctoral Student
Yes, and this is also on OSnews as well.
If the claims are true, this is going to be devestating for Apple. Their stock will plummit and they will lose a lot of money in lawsuits.
So, let's hope they are not true. It would be a very sad day, and a major blow to the newfound successes from Apple.
If the claims are true, this is going to be devestating for Apple. Their stock will plummit and they will lose a lot of money in lawsuits.
So, let's hope they are not true. It would be a very sad day, and a major blow to the newfound successes from Apple.
There is such things as volume discounts which they could claim the Apple stores are getting because they are much larger than the other retail stores. They are however claiming every store pays the same amount, so to say this would also mean they were lieing.
diablojota
Doctoral Student
And to follow on that train of thought, would mean that they are in violation of several Fraud regulations that are controlled by the SEC. As I said before, this could be very devastating to Apple, and create a low-confidence opinion as regards to their stock.
diablojota
Doctoral Student
Viro said:
Not just their image, but their large horde of cash that they have. With a dramatic decrease in stock price, they lose out on this money, then they also would have to pay out loads of money to the retailers. Then they would have to redo all their accounting to reflect the accurate prices, and as seen in the article could be losses of up to 80 million dollars. Add a class action suit to this by stock holders, and Apple is trying to float upstream without a paddle.
*IF* true, I hope Steveo didn't know about this because he could get in some serious trouble as CEO.... 
diablojota
Doctoral Student
Let's hope Apple has a very good explanation for this.
Captain Code, I agree, I hope Steve didn't know anything, however I find that highly unlikely.
This is very worrisome. Let's hope they have a good argument for this...
Captain Code, I agree, I hope Steve didn't know anything, however I find that highly unlikely.
This is very worrisome. Let's hope they have a good argument for this...
diablojota
Doctoral Student
bobw said:Rumors, don't you just love em
What worries me is that there is evidence there apparently. Have you seen the copies of the invoices at the other site?
Let's hope it turns out to be a lot of hot air, and Apple is capable of counter suing for slander.
diablojota
Doctoral Student
Well, if they doctored the documents in the attachment, that would mean that they would then also become liable for slander. Otherwise they will have a serious lawsuit on their hands.
I am surprised Apple hasn't already filed a cease and desist yet, if this is false.
I am surprised Apple hasn't already filed a cease and desist yet, if this is false.
Gnomo
Registered
I don't understand. Allow me to layout how I thought this worked and someone who is more of a business guru explain (in layman's terms) where I have things wrong.
My understanding:
Apple's retail stores are part of the Apple Corporation, not franchises like a McDonalds (ie. you get the name, but it is owned by an individual or group of individuals who run it). As such, customers (who shop at the Apple Retail stores) are buying directly from the manufacturer as if they had gone to the online apple store. So, the retail stores aren't really buying products from Apple, they are Apple.
Each store (including the online store) has to keep a base "cost" from which to calculate markup and profit. In most cases this "cost" would be the actual cost of manufacturing the product, however I'm guessing Apple has probably added a small amount per unit to pay for running the stores.
Now, by opening more than one store, Apple has complicated things for their accountants. Apple now has to keep track of which stores are earning profit for them and which are losing money. To do this, each store need to keep track of it's earnings and costs (like any store). However, since they Apple store's only expendatures are things like rent, power, etc. and their income is from selling products that Apple has already paid for under a different department. The numbers would be very inflated (every store would look like it was making money).
To solve this problem Apple probably treats it's retails stores (which is a department in the company) as a customer of the manufacuring department. So $$ is transfered between the two departments in the company. This makes the balance sheet (per department) look much better and also allows the company to keep it's eye on which stores people are buying from.
Obviously Apple authorized resellers are going to pay more for a product than the Apple retail stores. Apple has to make some $$ from those sales. Did Apple lie about charging their stores the same as the resellers? I would like to believe that they wouldn't intentionally lie like that, but it looks like they did. Maybe they didn't understand the question and answered as if they were asked if customers were going to pay the same at an Apple store vs. a 3rd party?
Okay that is my $0.02, please let me know where I am off so I can try to understand what the hubub is about.
My understanding:
Apple's retail stores are part of the Apple Corporation, not franchises like a McDonalds (ie. you get the name, but it is owned by an individual or group of individuals who run it). As such, customers (who shop at the Apple Retail stores) are buying directly from the manufacturer as if they had gone to the online apple store. So, the retail stores aren't really buying products from Apple, they are Apple.
Each store (including the online store) has to keep a base "cost" from which to calculate markup and profit. In most cases this "cost" would be the actual cost of manufacturing the product, however I'm guessing Apple has probably added a small amount per unit to pay for running the stores.
Now, by opening more than one store, Apple has complicated things for their accountants. Apple now has to keep track of which stores are earning profit for them and which are losing money. To do this, each store need to keep track of it's earnings and costs (like any store). However, since they Apple store's only expendatures are things like rent, power, etc. and their income is from selling products that Apple has already paid for under a different department. The numbers would be very inflated (every store would look like it was making money).
To solve this problem Apple probably treats it's retails stores (which is a department in the company) as a customer of the manufacuring department. So $$ is transfered between the two departments in the company. This makes the balance sheet (per department) look much better and also allows the company to keep it's eye on which stores people are buying from.
Obviously Apple authorized resellers are going to pay more for a product than the Apple retail stores. Apple has to make some $$ from those sales. Did Apple lie about charging their stores the same as the resellers? I would like to believe that they wouldn't intentionally lie like that, but it looks like they did. Maybe they didn't understand the question and answered as if they were asked if customers were going to pay the same at an Apple store vs. a 3rd party?
Okay that is my $0.02, please let me know where I am off so I can try to understand what the hubub is about.
well... you bring a good point Gnomo. one I actually found myself agreeing with wholeheartedly... if Apple had discussed it to their resellers as such.
That would be my only question. But all in all, it's rather glaring favoritism if these accusations ring true.
I hope not. Not one bit.
That would be my only question. But all in all, it's rather glaring favoritism if these accusations ring true.
I hope not. Not one bit.
diablojota
Doctoral Student
Gnomo, that is true, however, Apple stated in their SEC filing that their retail stores are a treated as a stand alone, and that they pay the same price as other retail stores. Not from the manufacturer, but at the retail level. The retail stores are still paying less than the authorized distributors, i.e. Ingram Micro.
So the problem is in the SEC filing. Apple stated that their retail stores pay the same dollar value as an authorized reseller.
So the problem is in the SEC filing. Apple stated that their retail stores pay the same dollar value as an authorized reseller.
What the article doesn't talk about is what was brought up in earlier posts:
The amount of bulk each store is buying. If all the Apple Retail Stores are considered to be one entity that is one large bulk order made to the warehouse. I would also withhold any judgement on the matter until the orders, not just the prices, are made public. I know here at the university I work for we get specific price drops based on the amount of equipment purchased. If we bought 9 iMacs the price per unit is about $100 more than if we purchased 10 iMacs.
The amount of bulk each store is buying. If all the Apple Retail Stores are considered to be one entity that is one large bulk order made to the warehouse. I would also withhold any judgement on the matter until the orders, not just the prices, are made public. I know here at the university I work for we get specific price drops based on the amount of equipment purchased. If we bought 9 iMacs the price per unit is about $100 more than if we purchased 10 iMacs.