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Warehouse boss throws down gauntlet to Apple

Chief executive wants to provoke wider discussion on restrictive distribution agreements; says more iPads on the way.

Chris Keall
Thu, 22 Mar 2012

On Wednesday, The Warehouse sold 100 units of the new iPad, throwing a spanner in Apple's carefully staged-managed plans for Friday's official release.

The sale, through the retailer’s website, was over within minutes.

But it could have long-lasting ramifications. 

It's set the stage for an intriguing power-play between New Zealand’s largest retailer, against the world’s biggest gadget maker.

And it’s one that’s going to intensify.

Speaking to NBR today, Warehouse CEO Mark Powell said his company was trying to source more units of the iPad – as many as possible and as soon as possible.

He would not say who his company’s parallel importing supplier was, other than that it was a company in the US. Apple kept a tight rein and it was difficult to access bulk quantities.

Nevertheless, “We’ll get as many as we can get,” Mr Powell said.

The Warehouse is one of the biggest – possible THE biggest – authorised reseller of Apple’s iPod music player, Mr Powell said.

A few months ago, the Warehouse boss visited Apple in Sydney.

“I asked if we could range the iPad as well, but they were reluctant.” said Mr Powell.

In the end, Apple decided it didn’t need to add to its New Zealand iPad retail channels.

At that point, Mr Powell took matters into his own hands.

“Our view is that if you won’t supply a product, we’ll parallel import it,” the Warehouse boss told NBR.

Mr Powell said he had not heard from Apple about Wednesday’s iPad sale.

Was he worried there would be a backlash from the US company, which is famously controlling over how, when and what price its products can be sold?

For example, did he see The Warehouse’s iPod business in peril? Is there a danger Apple could pull its authorised reseller status for the top-selling music player?

“I’m confident they won’t,” Mr Powell said. “I’d be very disappointed if they did.

If Apple did pull the iPod from The Warehouse, couldn’t the chain simply parallel import that Apple gadget too?

“I don’t want to do there,” Mr Powell said. “I don’t think we’ll have to.”

The Warehouse boss said his company would at least match Apple’s recommended retail price for the iPad, with potential scope to go lower.

Mr Powell said the new iPads sold through The Warehouse’s website were priced at $799 in anticipation of Apple’s RRP.

He found it curious that Apple pointed media to NZ pricing that suddenly appeared on the NZ Apple Store on Wednesday morning, ahead of the Warehouse’s 11am kick-off for its online sales.

Apple had set the entry level (16GB Wi-Fi) model’s price at $729.

“Maybe we did our bit to help influence the New Zealand price,” Mr Powell said.

The Warehouse boss said he hoped his company’s actions would help stir a wider debate.

He stressed his beef was not with Apple, but restrictive distribution agreements as a whole, which were often driven by retailers trying to avoid competitive pressure.

The Warehouse had increased its parallel importing activity across the board over the past six months, Mr Powell said.

All brands should be available through all channels.

“I believe in free markets and free competition,” the CEO said.

Chris Keall
Thu, 22 Mar 2012
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Warehouse boss throws down gauntlet to Apple