It’s pointless doing those sums.

Honestly, the prices you charge for your products, and the service you provide, I’m sure you’re doing ok now, but can’t say I’d feel sorry for you if it happened again though.

All the greedy distributors with horrible prices and terrible service (Core being one of them) are really lowering the quality of life in SA.

RJ – I hope you read this comment and a little seed is planted – you may be paid for your writing in newspapers and magazines, but they are on their way out, and you ignore the internet and social media at your peril

I apologise in advance for the negative tone of this comment. It is not intended that way. I understand that this comment is unlikely to have any effect, but I feel like it needs to be said.

Apple serves a market of “high end” customers – who expect “high end service”.

The two principal issues here, in my opinion, for Apple customers in South Africa are a) the inexplicably high prices (which remain to this day, despite what anyone claims, inflated well beyond the so called tax mentioned in the article, particularly on the upper band of the product line), but also b) the fact that Core comes across as providing almost zero benefit, value or service other than physically getting the machines into the country.

On the price issue.

In the article, RJ failed to mention that Core cut the prices of some of their product line soon after the blog articles he mentions appeared. So much for not paying attention to bloggers. Please explain why the top end Macbook Pro models are still so expensive when bought through Core, compared to the UK or Europe?

Or why Brad’s iPod Touch is arriving at such a low cost, including shipping?

Let’s do a little exercise. Even if we add a 35% (not just 25%) tax mark up onto Brad’s iPod Touch, that means that Core is earning a gross profit of R 1300 per iPod. The cost of transporting these will decrease, the more units you import. Let’s say the cost of shipping is a staggering R600 per unit, including shipping through to the retail store. (Although this is included in the R3110 Brad is paying). That means Core is making a profit of R 700 per iPod touch sold. Multiply that by let’s say a very conservative 25 000 units sold in ZA this year … R 17 500 000. Hmm.

Now lets say Core’s office building and other overheads of staff etc (maybe 25 people involved in the iPod Touch) come to R 1 000 000 per year for fixed costs, and 25 salaries, lets say R 7 000 000 per year. Core passes on lets say about 5% to its dealers (who knows how they survive), so that’s about a million. Leaving a bunch of millions, per year, net profit, from the iPod Touch alone. Just one product that Core brings in.

I understand that iPod Touches are luxury goods that are purchased by the elite. But I also believe that if Apple opened a local distributorship, they would be able to sell more products (because they would be cheaper, since they are the manufacturer). Not only that, I bet the service would be better. And we’d have an American company bringing their expertise into the country and training support personnel up to an appropriate level of competence.

So now let’s talk about service.

For an example of the poor service that Apple customers regularly endure: I have a faulty Macbook Pro; it is my own fault that it is malfunctioning. I accidentally dropped it when visiting a friend in a hospital ward. Apart from the DVD drive being broken, it works perfectly. I am writing this comment using it. It is a wonderful product that has given me three years of almost flawless service, despite the fact it was dropped horrendously.

That’s why I bought an Apple!

I have asked for help in having it fixed at several distributors and iStores, but no one can help me. My machine is now out of warranty. I want to order a new DVD SuperDrive. Alas, no-one imports those, and to my knowledge they don’t even appear on Core’s stock list. I’m not prepared to hand my machine in to a technician who can’t even find the part on the list of parts.

Here’s a different example, where Core actually subtracts value: Try ordering a customised Macbook on the local Core web site. They don’t offer the same (simple) customisations available from the Apple store in the states (e.g. add in some extra RAM, choose a different graphics card).

Obviously this kind of advanced customer service would require far too much effort and cost – since this would mean Core would have to do something apart from unload the machines from the shipping containers and deliver them to the retail store.

Another example of the poor service Core provides: It took weeks (in some cases many weeks) before any local Apple distributors could provide simple details about the latest OSX operating system, such as when it was arriving, and how much it would cost in ZA. This is unacceptable, we’re talking about an operating system here, it’s not like it’s a “nice to have”.

A “high end service” company would know that this is the kind of detail that is important to its customers. It would have those pertinent product details prepared and proactively disseminated to the dealers weeks before the product arrived, and would be taking “pre-orders” via its dealer network; in fact even actively using their dealer network to promote the product. Not in South Africa. At least, not at the dealerships I visited. Oh yes, you can always put your name “on the list” in the store (cough).

I feel sorry for the Core distributor partners, specially the “smaller players” who are loyal to the brand but have no “clout” against Core.

I could have had my copy of Snow Leopard shipped to me from the States long before some of the local distributors would even have known about its existence.

With regards to distributors: I personally know of one local distributor who complains that when they call Core for stock on particular items, they are repeatedly told “No stock is available” … but if they walk into one of the Core retail stores, the item they are looking for is on the shelves.

Why should the Core owned / sponsored retail stores get preference over the other independent dealers? It is not appropriate that the only licensed importer is also competing in the retail space. Is this not a clear conflict of interests?

All of the above leads me to the conclusion that there is no smoke without fire. In fact, I suspect all is NOT well at Core.

I have nothing personally against “Mr Apple” – I think he may even to a certain extent be unaware of the level of service his company is not providing to its distributor network and clients.

To you, sir: It’s not enough to just bring the product into the country, add a markup, and then try sell it. That is not perceived as a value add. You need to add value. Otherwise I (and soon others, like Brad) will just go around you. This is a different generation who know how to order products over the internet, and do so all the time. Imagine if all the Brads bought through you – suddenly your market might be bigger than you realize.

Look at what happened to the music industry in America – Apple showed the big music companies that people were willing to buy music online through the iTunes store and skip out the CD stores. The same thing will happen to Core. I’m sure Core has a few more years to keep doing what they’re doing, but eventually, it’s going to burst. Specially if our postal service improves.

The only ethical way that I can see for Core to survive in the long term, is to get really good at supporting its customers, engaging with the larger Apple user / developer / dealer community, and to start answering the hard questions (like how can I find a replacement SuperDrive?). Or relinquish its monopoly so that someone else can run with the opportunity.

This seems to be something RJ is clearly worried about having to do some day. So what, if some of those “bloggers” want to start their own franchise? Maybe they will do a better job than Core, or will actually care about the Apple brand and it’s customers?!

If Core can’t help customers with certain things because they can’t *afford* to do so, because of economies of scale …. or because Core doesn’t offer the same level of service as Apple can and does in the States … (which Core currently clearly can’t/doesn’t) … admit it to your customers.

Don’t just blithely use the Apple brand and adverts, as if people will get the same Apple experience in ZA, which they won’t … rather be humble, honest, and try get the whole company to a place where Core can at least say “we’re doing the very best we can, given our limited scope and the small South African market size”.

That would be much better than the current “take it or leave it, we don’t care” approach to service.

Core is going to need a really good reason to give people to justify why they should pay so much more for buying through Core than by going direct… and if Core is going to say that the reason to buy through themselves is “after sales service”, then they better PROVIDE GOOD after sales service.

Another small example of how we’re limited in ZA compared to the US (from the ZAStore – the Core retail online store):
“Do you sell the AppleCare extended protection plan?
Unfortunately this product is not offered to South Africa at this time, so we are unable to supply. ”

A standard Core response. What if you NEED an extended protection plan?

How much *does* Core spend per year on supporting Apple products, relative to income and shipping costs? How many support technicians are there in the country? How are they trained? Who trains them? Can Core support technicians be shown to be on a par with US technicians? Why is extended AppleCare not offered in ZA? Can companies have their own support technicians trained by Core? I don’t think these are questions RJ would be comfortable discussing over lunch any time soon; but that’s just my guess.

I rest my case. I love Apple products, but the current attitude and uncompetitive practices shown by Core leave a rotten taste in my mouth.

Sorry for the good people who work at Core (they are in there!!) – but the truth needs to be said. Eventually, the customers are “revolting”.

Core its utterly useless when it comes to Nintendo and Apple products here, over priced and next to no after sales service.
I went to go ask when the new iPod touches were going to come out here and how much they would be at the Gateway iStore and just got a, “I dunno”.

Core sucks :/

I work closely with one of the other major US technology players and sadly there are a few bigger forces at play when it comes to the Apple pricing in South Africa. First off our wonderful currency tends to exaggerate things a bit. All distributors take forward cover on currency and when the Rand strengthens we basically get screwed on the relative price and everyone gets up in arms about how cheap it is in the US. We also sit at the bottom of the world and air freight costs to RSA are close on the ridiculous.

All said though a warning to the Core group is that as technology dependability improves and your customer gets a bit more savvy (ie can order online from somewhere else) you better start thinking about how you add some value or things as they always do will change!

The same goes for Nintendo products – the Wii standing next to my TV is is anti-Core as I am…

How does one get hold of the Competition Commission to report Core? Coz we’re finally seeing some movement on cell interconnect charges, time to bring down Spaandonk Corp as well!

I mean, the reason they can post revenues “well in excess of R1bn/year” is because of the inflated Apple and Nintendo pricing!

Nintendo products are MUCH more expensive than anywhere else in the world is this covered in this mystery 25% tax too ?

I wish we could all import iPods and Nintendo products so the Core Group can be closed down.