A bigger bite of Apple

Apple has continued to see strong sales over the last year, despite predictions that the recession would dent its momentum. Its sales – though down – have been resilient enough that the vendor has returned to the top five best-selling PC vendors in the UK, according to recent figures from IDC.

With sales stronger than some rivals, and the stylish image of the brand, now might seem like a great time to start selling Apple products. However, it is well known that Apple’s hardware carries low margins, so what about the peripherals market?

Just as with Windows and Linux-based systems, peripherals are a strong margin maker. Perhaps this is even more true for Apple products, thanks to a fan base willing to pay more for design. However, that desire for design, as well as function, means it can be harder to sell peripherals if you stock the wrong ones.

Luckily, unlike the PC industry, there are fewer concerns over compatibility, allowing retailers to concentrate on which products will sell and which won’t. "Like all of Apple’s products, its own peripherals are an absolute joy to use and are hard to match," explains Ingram Micro’s senior business manager for Apple, Darren Tobin. "That said, there are many third party vendors with some fantastic peripherals and obviously when connecting these to your Mac you know they’re likely to work straight out of the box without worrying about drivers."

Another area where Apple and its third party partners’ products often differ from their PC counterparts is in the packaging. While it may seem like a minor detail, effective visual merchandising is a well-known method of boosting sales. "Vendors often pay particular attention to the finer details when it comes to the product and packaging of their Mac compatible range due to the type of customer they are trying to market to," adds Tobin.

As mentioned previously, one strong area of Apple’s marketing is in its brand and many of those who purchase the products are willing to buy into that brand – at a premium. However, as Tobin adds, it is crucial that retailers and resellers recognise that when looking to attract Mac users’ attention: "Apple’s end users are not afraid of spending good money on peripherals, but they do need to be good products."

Another area that is performing well is education, claims Westcoast’s marketing director, Alex Tatham. "Sales are up, especially in areas such as the Isle of Man and the Channel Isles where the tax breaks mean the cost of Apple equipment is much lower. However, there are also sales on the mainland, especially in Academies."

He adds that where they are buying Apple hardware, there are opportunities to up-sell peripherals that go with them.

However, there are other potential benefits to schools increasingly purchasing Apple equipment, namely children using the products and then wanting them at home. "Where that filters down to the consumer market will depend on how successful children are at getting their parents to spend more than they normally would on a computer," he said.

"Possibly Apple’s most popular products at the moment is its range of iPod and iPhones, which consumers want or need accessories for," adds Richard Nuttall, networking and product specialist at Enta. "From Enta’s point of view iPod and iPhone accessories are also proving to be very popular with resellers and therefore consumers too. Belkin have a strong portfolio in this area and are bucking the trend, in terms of sales, during the current recession."

THE QUICK SELL
Of course, many retailers and resellers are cautious in the current climate. So when looking at expanding into new areas you may want to know which product is currently performing well and will therefore be a minor risk.

"Storage is performing very well at the moment," claims Tobin. "Mice and keyboards are also performing well." Much of this can be put down to the recent boom in sales of laptops as desktop replacements – something that was highlighted by GfK recently. "We’re also seeing a big upsurge on sales of networking peripherals in the Mac market."

However, Tatham is coy about naming a particular sector that is performing well. "Yes, certain areas are doing well, but I would strongly advise against dipping your toes into the Mac market. If you are interested, then becoming authorised by Apple is vital, otherwise you won’t receive the discounts that your rivals will, and you’ll be out competed on price. Yes, Apple’s customers are willing to spend more on the same product category, but that doesn’t extend to individual products, and they are still just as likely to look for the cheapest deals as their PC using brethren are."

GAME, SET AND MATCH
Recent months have seen a number of incentives and schemes launched to help retailers and resellers diversify into Apple hardware, with the latest example being Ingram Micro’s Match marketing programme.

"We have developed an integrated marketing campaign called ‘Match’ to promote Apple and complementary vendors that builds on Apple’s premium position in the market place," explains Tobin.

Much of the focus of the new scheme is to drive attention of new and existing products to current Mac resellers, as well as Ingram’s wider PC-focused customer distribution base that could benefit from moving into the Mac arena.

"The aim is to increase the awareness of specific brands and increase product sales within the Apple community. Match will also educate and enable resellers to sell Apple-led solutions and encourage attached sales by highlighting the complete Apple compatible range and portfolio of products carried by Ingram Micro, and demonstrate how this represents an opportunity for growth."