And So Long, FreeMac (2/3/00)
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So let's say you're a formerly-beleaguered computer company trying to increase your installed base and market share past a critical mass in order to attract more developers to your platform. Now let's say that a third-party venture wants to purchase a million of your computers and give them away to rabid consumers looking for a free ride-- a figure which represents perhaps half of the total sales numbers for that particular wildly-successful model. You say you'd welcome that prospect with open arms, and do whatever it took to ensure that the plan succeeded? Bzzzzt, thanks for playing, but it's clear you're not Apple material. The correct answer is this: you'd tell said third-party venture to go play in traffic. But we have some lovely parting gifts for you...

It's true, FreeMac.com is no more. The company that wanted to give away a million iMacs starting last September has renamed itself "NadaPC.com," according to CNET, and will give away a million "Internet access terminals" instead. Why the switch? Well, Jonathan Strum, the man behind FreeMac, went to Apple and tried to get his company authorized as an official Apple "reseller," but that didn't wash. (Maybe it had something to do with the fact that selling an iMac for $0 is substantially under MAP.) As a result, FreeMac couldn't qualify to buy iMacs at wholesale prices from Apple's distributors.

Next, Strum offered to ensure (somehow) that the iMacs he gave away would only be distributed to new computer users and PC owners, thus expanding Apple's market share. No go. And when a desperate Strum offered to buy the million iMacs at full retail price, Apple still refused, further noting that Apple resellers are only allowed to sell to end-users-- meaning FreeMac isn't even allowed to buy iMacs at, say, CompUSA and give them away. (Hmmm, will our dealer get harassed by Apple if word gets out that we bought an iMac there and gave it to a family member?)

And so, FreeMac is dead. We think we may have come up with a way to get around Strum's roadblocks, though. Since FreeMac customers had to accept a First USA credit card as part of the deal, why not arrange delivery of the iMac from a mail order reseller like MacConnection, have the end-user's credit card charged for the iMac purchase price to comply with Apple's regulations, and then pay First USA and have them issue a credit to the customer's account? Ta-da-- the customer gets a free iMac (and a nice credit rating boost, to boot), FreeMac gets to buy the iMac and give it away, and as far as Apple's concerned, it's just one more iMac sold via retail. So Apple sells a million iMacs via MacConnection to end users at full retail price, a million customers get free iMacs, FreeMac gets its distribution problems hammered out, and First USA puts a million credit cards in the hands of "qualified" consumers. Everybody's happy. See? All it takes is a little ingenuity. Now, did you really want a free iMac from a guy who couldn't even come up with a simple plan like that?

As for just what Apple's problem was with the whole FreeMac concept, we can't say. We imagine it had to do with worries of weakening the brand-- having Apple's product, name, and logo associated with a startup that could very likely crash and burn. Remember how Steve went ballistic when he found out a third-party company was making Apple logo watches? And then there's the factor of the public eventually thinking of the iMac as a "cheap" system-- not good for sales of the iMac DV Special Edition, for instance. Still, passing on an opportunity to put a million more iMacs in the homes of qualified consumers... well, we've just got to wonder.


 
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The above scene was taken from the 2/3/00 episode:

February 3, 2000: iToolsgate is quelled in mere days, following quick action on the part of Apple's lawyers; welcome to the era of the kinder, gentler iTools Member Agreement. Meanwhile, FreeMac.com calls it quits due to Apple's resistance, and Palm readies its first color device for a February 20th debut-- where's Apple's?...

Other scenes from that episode:

  • 2074: Buh-Bye, iToolsgate (2/3/00)   Well, there's the end of that little fracas... No sooner does the Mac community work itself into a seething, frothing, foaming-at-the-mouth state of righteous indignation at Apple's misdeeds when suddenly Apple has to go and spoil everything by doing the right thing...

  • 2076: Countdown To Color (2/3/00)   The clock is ticking... Go2Mac reports that the official, Palm-branded Palm IIIc is now entered in the Best Buy computer system. It sports 8 MB of RAM, the long-awaited color screen, and a $450 price tag...

Or view the entire episode as originally broadcast...

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