Abstract

Apple Computer, Inc. (Apple) was the leader in the personal computer (PC) market until IBM PC and its clones gained popularity. Apple’s market share slipped in spite of the popularity of its Macintosh (Mac) range of computers, which were sold through authorized resellers and large retailers. To regain its market share, Apple started selling online (1997) and through company-owned retail stores (2001). The authorized resellers alleged that Apple showed undue preference to its stores during the shipment of its products. They accused Apple of following unfair practices and channel strategies aimed at eliminating them. The case describes Apple’s approach to retailing and puts forth the arguments of the resellers and details of their lawsuits.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Hybrid channel system, channel functions, and channel integration
• Exercise of power by a company (channel leader) over the channel members
• Channel conflict and resolution.

Keywords

Apple, Macintosh (Mac), iPod, Lisa, iTunes Music Store (iTMS), Personal Computer (PC), Graphical User Interface (GUI), Steve Jobs, Steve Wozniak, IBM, 1984, Reseller, Online Store, Retail Store, Class Action Lawsuit , PARC, Xerox, Silicon Valley.