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(Nikkei BP Group)

(No.1 High-Tech News Site in Japanese)

  • Only Retailers with Skillful Sales Staff to Sell iMac: Apple Japan's Director
  • August 27, 1998 (TOKYO) -- Only retailers with skilled sales staff will be able to sell the new iMac, according to an Apple Japan Inc. executive.
    Nikkei MAC, a magazine published by Nikkei Business Publications Inc., interviewed Naohisa Fukuda, director of business operations at Apple Japan, on the domestic sales strategy for iMac, a new personal computer model for consumers that has been selling briskly in the United States.

    Nikkei MAC: Apple Japan announced its tie-up with Shimamura Music and Ado Electronic Industrial Co., Ltd. on sales of iMac in Japan. We will be able to buy it from other retailers as well?

    Fukuda (photo): iMac will be sold exclusively at retailers which tie up with us on sales of the product. As of now, we revealed only Shimamura and T. Zone, directly operated shops of Ado Electronic Industrial. We are currently negotiating with some other retailers, too. I think we will announce some more retailers for iMac before the model hits the shelves.

    Nikkei MAC: Why are you going to limit the number of retailers which will sell the iMac?

    Fukuda: First of all, let me tell you about current conditions of the personal computer industry in Japan.

    Since the Windows 95 operating system hit the market, PCs have been sold as a home electric appliance. Unlike other home electric appliances, however, in reality, not everyone who bought a PC can operate it as he or she likes. Many of them had to give it up.

    In this sense, Mac was not an exception. Actually, not a few of those who purchased our Performa model failed to manage it, and they have hardly touched it. We believe that has promoted a sense of mistrust among our users, in other words, a fixed idea that they can in no way manage it. And that has created a situation in which PCs have not been selling well in Japan.

    We did not want to repeat the debacle with iMac. We want our users to really handle the model as they like. That's why we need to give them apt advice on what they can do with their PC. We also place great importance on our follow-up services to our users. We believe we will make the same mistake again unless we sell iMac at retailers which can realize all of these things.

    We would like to sell iMac only at shops which have skillful sales staff who have a deep understanding of the product and make some solution proposals to customers.

    Since iMac is a PC designed for consumers, the staff will have to explain in detail to entry-level users for what and how consumers can use iMac.

    It's not that all shops of Shimamura and T. Zone will handle iMac. At this stage, we acknowledge only a dozen of Shimamura's shops and four T. Zone shops as retailers of sufficiently high level. We plan to cooperate with the two retailers to improve the skills of sales staff and sell iMac at more of their shops.

    Nikkei MAC: Have you approved MacMasters as a retailer of that quality?

    Fukuda: The quality of MacMasters has been falling as the time goes by. As you know, prices of PCs are falling. But unfortunately, distribution channels in Japan have not changed as prices go down. Consequently, neither retailers nor PC makers can make sufficient profits out of PCs anymore.

    And that indicates our inability to make investments for the future. We understand the lowering of the quality at many MacMasters is a structural issue.

    If we do not change anything, the whole PC industry will be ruined. I think both PC manufacturers and retailers have to change, although the change has to involve some distress. We would like to construct a new business model to revitalize the entire industry with the debut of iMac.

    Fortunately, Apple Computer Inc. of the United States has been changing under the leadership of Steve Jobs. One of his results is the development of iMac. Because we will ship such an attractive model, we would like to review distribution systems and the way retailers are, and I think we can do it.

    In the United States, Apple can offer iMac for a low price of US$1,299 as a result of their cost-cutting efforts, coupled with their reform of distribution channels. It is not a result of reducing parts and assembly costs. Therefore, we will not be able to provide our users with the model for a comparable price unless we take a similar measure.

    Nikkei MAC: Many retailers selling Mac models are currently accepting reservations for iMacs. However, do you mean that some of them will not be able to actually sell the product?

    Fukuda: You are correct. They accept reservations at their own discretion. Unless they are approved by us as a retailer with sufficient product knowledge, they will not be allowed to sell iMac.

    Nikkei MAC: Who are your target users?

    Fukuda: There are three types of target users. First, we will have traditional Mac users. Second, we will gain some Windows users. We would like to sell iMac to those users who understand the value of iMac at T. Zone and any other potential retailers that we will tie up with in the future. We want retailers to sell iMac not only in the Mac section of their shop, but also in the Windows section.

    Third, we will regard those who have never been interested in PCs as a highly important user bracket. We expect Shimamura Music to explore this type of potential user. Other than Shimamura, we hope to tie up with any retailers which can draw out and promote the appeal of iMac to those other than existing PC users.

    Nikkei MAC: What about distribution channels?

    Fukuda: The iMacs will be transported to Japan from a plant in Singapore by air almost every day. After customs clearance, they will be directly transported from the airport to each shop. In this way, we can cut significantly the distribution process to consumers.

    There will be no conventional distributors involved in the process. Each shop will have inventory only for a few days. If shops place orders to maintain the same number of units as inventory, within a few days they will have replacement units sent directly from the plant in Singapore. Shops will no longer have excess inventory, thus reducing sales costs and cutting the price of the iMac in the end.

    Nikkei MAC: In the future, will all of your products, including existing ones, be sold exclusively at selected shops through such distribution channels?

    Fukuda: As a first step, we will use the distribution channel only for iMac.

    Conventional Mac machines for professional users will be sold via the existing distribution channels, including sales by visits to customers. Details, including the timing, have not yet been decided, but we plan to offer a build-to-order system for distributors.

    Related stories:
    Apple Japan to Start Sales of iMac at Low Price on Aug. 29
    Apple Japan's iMac PC Sales Strategy Far from Clear

    (Nikkei MAC)

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    Updated: Wed Aug 26 15:46:41 1998 PDT