This article highlights how independent retailers and distributors find it hard to make money while selling Apple products due to its stringent pricing norms that benefits Apple itself ( own stores). The pricing rules of Apple ensures minimum profit to any seller outside of Apple often making it unviable if you don’t have scale. (Redington has scale of course).
But Apple being Apple, in order to extract as much profit from the value chain can make it more and more difficult for others to sell it’s product- this is an advantage and a disadvantage for this co
+ve : Competition reduces as players exit, leading to consolidation( Apple has however continued to have only 2-distributors for India- Ingram and Redington). Apple continues to remain Apple of customers’ eyes due to premium status and market expands (Apple mkt share in India- 4.4%, Middle East - 30%)
-ve : anti-trust fines on Apple and distributors, lower margins may erode gains of volume increase
Since Apple contributing 30% revenue of Mobility segment, what are your views on this significant risk?