Apple to add second distributor this week
- 26 September, 2010 22:00
Renaissance says it does not expect a significant impact on its business after being told by Apple that a second local distributor will be added on 1 October. In a statement to the Stock Exchange today, Renaissance says the move does not affect the companies’ current relationship nor distribution agreement. “We have a strong and productive relationship with Apple and our performance in the market has resulted in quarter on quarter market share improvements over the past year,” says Renaissance CEO Richard Webb.
In the statement, he reiterates earlier comments that Renaissance has not been Apple’s exclusive local distributor since 2006. “We do not expect this latest development to significantly impact on our business. Renaissance will continue to compete in the New Zealand marketplace. We believe in choice and competition and our profitable diversification along with our exciting plans for the future, reflect how we are well-positioned for the new plans Apple has to harmonise its distribution strategy in New Zealand.”
Ingram Micro was earlier rumoured to become the second local distributor, but has not yet been reached for comment. Although Renaissance posted an earlier announcement to the Stock Exchange saying it was jubilant in announcing that Apple’s local share of the PC market had reached a record level in excess of 11 percent, chairman Colin Giffney said in an interim report last week that his company was ready for moves Apple may make in its distribution strategy.
“The reality is that a significant reason for the decline in Renaissance profits in the last few years has been due to the combined effects of Apple engaging directly with the consumer and at the same time aggressively reducing distribution margins,” says Giffney in the report. “The distribution margin for the iPad... is very low. With recent diversification and our plans for the future, Renaissance is well positioned for any plans Apple may have in harmonising their distribution strategy in New Zealand if they think such a change is needed.”
Renaissance says it doesn't know how much of Apple's product range will be affected by the new distribution agreement.
CEO Richard Webb says as a publicly-listed company, it has an obligation of continuous disclosure.
Chief marketing officer Warwick Grey says Renaissance's point of difference is the value it can add "beyond just shifting boxes". This includes its 24/7 support operation, its application development team, its PC manufacturing business, and its plans for new retail concepts. He adds it is seeing strong interest in Apple's Mac product among enterprise customers.
Renaissance says announcing Apple's distribution move is a chance to be disruptive and let resellers decide if they want to support Renaissance. "We're so far away from being dependent on an exclusive arrangement," says Grey. "It's a relief to get this out and let the channel decide."