Aviator who loves Macs

Morgan admits that "it's not easy" being an Apple reseller and does not mind saying he has a 'mixed' relationship with the vendor. "Yes, it's a love/hate relationship, we love the product, we love the concept, we believe there is opportunity in that. What we hate is the mechanics of the way in which the corporate deals with its external relationships.

"And in some ways, it's very disappointing. I think that Apple has an amazing opportunity given the scope of the people that it does business with, yet sometimes it chooses not to capitalise that opportunity but rather suppress and make the situation very difficult."

Apple's recent move to the Intel platform with its MacBook Pro product, for instance, has meant that 2006 is a year of transition for Apple and it is a challenge for resellers to get through the transition unscathed.

"I categorically understand that this is the future - it's a great product and it's one of the smartest decisions the corporation has made. Obviously the corporation needs to deliver this product to customers and this is an important shift. The problem is that we selling a product today that doesn't necessarily have everything that needs to go with it. So the challenge for the reseller is that you are simply told via an announcement at a developer conference by Steve Jobs.

"Very little accommodation is made for the reseller now having reduced revenues and increased cost structures because we are trying to get a product out there to an audience that may not be necessarily buying early and there is no compensation for that. You are expected to survive that storm the best way you can and come out the other side hopefully smiling."

He believes that good resellers will survive this transition but others that are operating "marginal" business will struggle. "This is going to be an enormous challenge [for marginal businesses] and in some cases may prove to be a challenge which cannot be overcome."

Morgan feels that millions of dollars being pumped into marketing the iPod could probably be diverted to other areas to ensure the companies that have delivered Apple's products for the past 25 years remain profitable through the transition. "They don't wear the penalty of Apple making a global decision not a local decision."

Morgan says the reseller channel would argue that there is never enough being done while Apple would argue that they do too much. "I think it's Apple's view that they do enough in terms of brand and awareness, and that the resellers receive the benefits from that.

"If you're a corporation that's a great view because (A) it's going to be a lot more effective to your bottom line and marketing spend and (B) it's going to make things a lot easier to get approved internally because you're not pushing the envelope and it's a very comfortable decision.

"From a reseller perspective, it's difficult if you don't want to open a shop for Apple and you have this thing on the front door saying you're an Apple centre but people don't know that you exist. I think that more could be done in that respect. Apple have for the last 20 years in Australia had this brand called AppleCentre and I would have thought that in 20 years you could make that a good retail proposition. It is unfortunate to see that resources haven't been allocated to local awareness - that resources haven't been allocated to building a strong retail front in that respect and subsequently you have AppleCentres that aren't of a high standard and don't deliver the message clearly."

Apple stores

It is for this reason that it would make the decision easy for Apple to do retail on its own. "I would also put back to Apple that this isn't something that is the responsibility of the retailer - it's also the responsibility of the branded vendor."

The potential for Apple to open its own direct stores is a threat to the existing Apple channel. "Apple have spent the last two-and-a-half years in Australia reshaping the way Apple stores are going to be perceived."

Morgan believes that while Apple-owned stores improve the company's image, they will come at a cost for Apple resellers. "It's going to put a lot of guys out of business. Apple aren't hiding or denying that their intentions are to put stores in busy locations. It could be a huge risk.

"If I read between the lines, I think they are ready to do it. I've spent the past four to five years, complaining about it. There are multiple ways of Apple achieving what it wants to achieve in retail and it doesn't necessarily have to do this by retailing itself. It will be an extremely sad day to realise that Apple's faith in the third-party relationship is just not there. In some ways, I'm going to feel personally that it's a back-hander to me. I've given Apple five very good years of my life from the age of 21 to now.

"It's going to be a very upsetting experience to know that Apple will be eventually contacting my customers, saying 'We can do it better than what you have been getting so far'. I know that Apple look at box movements, they look at numbers, but I'm a human being and I look at the fact that I have given them minutes, hours and days of my life that I will never get back and I would like to think that is of some value to them."

The future

The only risk for the future of Apple would be the company becoming too proud of its own position and "alienating itself from an audience that is not interested in how great Apple thinks it is".

"It's only interested in what it can achieve using its product. I know there's a lot that has been invested by Apple in building the cult, building the following and the feeling towards the corporation that it's the creative person's computer, it's the computer for the rest of the population. We buy that and we understand that but you can only go so far."

Still, Morgan feels that Apple is a great company and has conveyed a lot of "good feeling" into a market that is traditionally about saving a buck. "They have really challenged that thinking and it is paying off for them."

Morgan believes that there is a big job to be undertaken from Apple's and its reseller's perspective in achieving awareness of Apple computers. "I think that we are going to be able to do it more effectively together working in a united form than fighting with each other for what customers are there."