Apple price cuts claim victim

Auckland Apple reseller Computer World 1982 has succumbed to shrinking Macintosh margins.

Apple price cuts are putting pressure on its reseller channel and seem to be behind the calling in of receivers at long-time Auckland Apple reseller Computer World 1982.

Dave Best, managing director of Computer World 1982, says he hopes the company will rise again "from the ashes".

"There's a combination of causes but the biggest thing was we were expanding too fast. We had 70% growth last year and 90% this year and we hit our credit limit.

"It was coupled with the fact that because the price of computers has halved you do twice as much work for the same turnover."

Best says the receiver was called in by Apple distributor CED, but Peter Arnott, group finance director at CED, says the receivers were called by the debenture holders Triumph Industries, Renaissance and CED.

"We have group exposure to some of these people, as you would imagine. It's up to Dave Best and the receivers to tell you what their plans are, but I've got one job in mind and that's to steady the ship in terms of what's owed.

"Dave's a very knowledgeable Macintosh man and there's nothing in this receivership that's negative. We're not worried about any fraud or defalcation. Dave's just been expanding a bit rapidly and we want to make sure he stays within the fold."

"I think discussions will go on about that and what is the best way for Dave to continue to represent us and getting what he owes us down to manageable proportions.

"What he owed us didn't balloon out, it just got older and older."

To the suggestion that price cuts on Apple computers had created some of the pressure, Arnott comments: "He's joining the PC world, isn't he.

"If you look over the last eight to 10 years, the revenue of all of these guys doesn't equal the number of boxes they're pushing out. Prices are probably a quarter of what they were five years ago so you have to sell four times as much to get the same revenue."

Arnott says Apple prices have been declining for some time to compete with PCs. He also says there is no chance of Triumph taking over the outlet.

"It's not our strategy."

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