As the Apple Turns: Scene 179: Let's Have a War (11/14/97)

Let's Have a War (11/14/97)

But just as Apple is facing some sunny days with its new Apple Store kicking into play, the dark clouds of a massive price war loom on the horizon-- so says an article at MacWEEK.

One of the changes Apple made to its reseller channel policies was the announcement of the severe reduction of co-op funds, starting on January 1st. Co-op funds are paid to resellers who honor Apple's minimum advertised price, or MAP, in order to defray marketing costs. Basically, Apple says, "Don't sell this for less than $1899," and if the reseller complies, they get some cash to use for better advertising, etc. Now do you see why Mac prices are well-nigh identical in every major store and mail-order catalog?

Up til now, the vast majority of resellers were honoring MAP, but at the end of the year the co-op funds will be reduced by 75%. Suddenly, MAP isn't as attractive as it once was. So some resellers are banking on winning more customers with sub-MAP prices-- hopefully enough to make more in sales profits than they will lose in co-op funds. So far, ClubMac and Cyberian Outpost are the first to break away, selling G3 Powermacs for about $100 less than Apple's MAP. MacZone and ComputerWare are considering following suit.

Since these guys will have lower prices than the Apple Store, and don't charge sales tax like Apple does, Apple may have a tough battle ahead. Will the option to order custom configurations (and loyalty to Apple) be enough to keep customers buying direct?

SceneLink (179)

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The above scene was taken from the 11/14/97 episode:

November 14, 1997: (Sorry—this was before we started writing intro text for each episode!)

Other scenes from that episode:

178: That's the Spirit (11/14/97) The first custom-built Mac in Apple's history was completed last night, serving as a milestone along the road into the build-to-order business. And while this in itself is good news, we at AtAT are heartened to read at MacOS Rumors that the recipient of that personalized Powermac G3 also received some bonuses with his/her order-- namely, a personal letter, an Apple T-shirt, and a free Quicktake digital camera...
180: Yet More on a CEO (11/14/97) Oracle's Larry Ellison has been chatting to the press again, and you know what that means-- More rumors about a new Apple CEO! According to a Reuters story, the latest word from Larry is that the board of directors has narrowed things down to a single favorite candidate, and that candidate is not his best friend Steve Jobs (who "wants to focus on Pixar and his kids")...

Or view the entire episode as originally broadcast...


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