Apple SA debate heats up
The distribution of Apple products in South Africa has long been a hotly debated issue, with many consumers questioning local Apple distributor Core Group’s pricing structure. This debate has now hit headlines with an anti-Core website launched, and Core Group Executive Director RJ van Spaandonk hitting back at critics.
According to the website Stop Core (http://stopcore.co.za/), a website ‘aimed at stopping the Core monopoly in South Africa’, the Core Group charges in excess of 25% more for Apple products than the retail prices found in the rest of the world.
“The aim is to get Apple to realise what is going on in South Africa and give Core a good speaking to but still allow Core to continue their business. As a capitalist I realise that Core is more than within their rights to make a profit but it does not explain the massive price differences of over 25 percent in comparison to retail prices,” the Stop Core website states.
In one article on the Stop Core website the writer says: “If someone over at Apple is reading this, we in SA are tired of the poor service and high prices that Core forces on us. Please give another group import rights as well, the sales of your products suffer because of their incompetence.”
Core Group hits back
Van Spaandonk said that Core Group is definitely not a monopoly as suggested by Stop Core, and added that the company has just over 1 % of the computer market in South Africa.
Van Spaandonk explained that online prices in the US for Apple products exclude sales tax and VAT, which means that people must accommodate for this discrepancy when doing pricing comparisons.
The Core Group executive added that his company engages in what is called forward cover which means that an exchange rate is locked in – often at a higher Rand/USD ratio than current currency values. Van Spaandonk said that the current forward cover rate is around R 9.1 per USD which partly explains the higher local prices for Apple products.
Van Spaandonk has also previously said that it is not accurate to compare local Apple pricing to that in the United States as Core Group source Apple products from Europe rather than the US. Pricing comparisons with EU based territories may therefore make for a more accurate pricing comparison.
Only authorized distributor of Apple products
Another contentious issue is companies like CAB (Cool Apple Buddies) selling Apple products in Apple-branded stores around the country.
Core Group explained that it is the only authorized distributor of Apple products in South Africa and that many consumers may burn their fingers with grey Apple imports from alternative local resellers.
On the Core Group’s ‘Stop Grey’ website (http://www.stopgrey.co.za/) consumers are warned as prospective buyers of Apple products that there are risks involved in buying grey products.
According to the Stop Grey website the risks include that the buyer may not be entitled to official warranty support, could end up buying reworked, used or stolen products, may not have access to the level of support required by Apple for authorised resellers and could have their equipment confiscated by the authorities.
Van Spaandonk added that the grey importers don’t have the interests of consumers at heart. He warned that many grey resellers sell end-of-line products without warning consumers that they are buying an ‘old’ product.
According to Van Spaandonk Apple US has asked CAB to stop trading Apple products in South Africa after ceding Apple copyright to a SA subsidiary of Apple. Van Spaandonk added that Apple has started legal proceedings to ensure that their copyright in South Africa is protected.
CAB Sandton store owner Sharon Schon disputes Van Spaandonk’s claims, saying that to date she has not received a civil suit from Apple. Schon added that CAB has never had a problem with honoring guarantees and that CAB is currently trying to acquire a second Apple distribution channel in South Africa.
Schon further said that CAB is not a grey importer, and that they are sourcing their products from an international reseller adding that Core Group is doing the same. According to Schon Core Group has not been appointed as the official Apple distributor by the parent company, but rather an international reseller.
MyBroadband is however in possession of an official letter available from Adams & Adams – which acts on behalf of Apple Inc. USA – that confirms Van Spaandonk’s allegations against CAB (Apple legal letter attached here).
The letter states that Apple Inc. is in dispute with CAB regarding:
- Trademark infringement of Apple’s registered rights
- Passing off of Apple’s common law rights
- Infringement of Apple Computer Ltd copyright through the unauthorized importation and sales of Apple products in South Africa
Van Spaandonk added that CAB’s allegations against Core Group were simply untrue, and that Core Group sources its products from Apple Europe – a subsidiary of Apple US – and not a reseller as CAB suggests.
This is confirmed by Apple’s official website which states that “The authorised distributor for Apple products in South Africa is Core Group”: http://www.apple.com/za/contact/
Apple in South Africa – give your views
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