German Mac users, resellers mobilise against Apple

But can Apple cope in one of the world's most cutthroat markets?

Apple users and resellers in Germany have backed an open letter to Steve Jobs that demands the interim CEO sort out Apple Germany's management and what it claims is the parlous state of Mac sales in the territory. The letter claims Apple Germany's bosses are "careless and erratic" in its marketing, have bad customer and management policies, and claim better sales than they actually achieve. For example, the letter mentions Apple Germany's claim in November that it had increased its revenue and "strongly added to the good results of the enterprise" (Apple's words). However, the letter also cites market research which indicates the German division made DM150 million ($90.36 million) less than analysts had expected. Resellers claim the company's management only keeps Apple Germany in the black by inflating system prices, which limits unit sales for dealers already suffering from narrow margins. The company has a target of selling 15,000 iMacs by the end of the year, claims the letter's writers, yet German supermarket chain could sell 200,000 Pentium boxes in a single day -- more machines than Apple Germany sells in a year. Again, resellers blame pricing, claiming they wanted to see the iMac come in a DM1999 ($1200) rather than the DM2998 ($1806) it was actually released at, falling to DM2498 ($1505) last month. The letter ends with a quotation from an interview with Jobs that appeared on the German magazine Woche: "Apple historically has never done well enough in Germany and I don't understand why, because Germany is a great country and Germany has a lot of small businesses -- really healthy, strong small businesses. And Germany's consumers are smart. So I don't know, I think it must be something we've done wrong." The letter's writers would clearly agree, and cite the above examples as evidence for the prosecution. At the same time, they do fail to take into account the cutthroat nature of the German PC market, largely driven by a price-conscious buying public that is happy with lesser specced kit than US or other European customers would settle for, provided it's cheap -- around DM1699 ($1023) or less. The German market is dominated (78 per cent) by local PC assemblers -- even Compaq ranks only tenth in marketshare -- and has seen many firms come and go. In such an environment, it might even be hard for Steve Jobs -- the guy the letter writers and the resellers they cite clearly want to fly over and sort things out -- to make much headway. ®

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