Channel Conflict at Apple

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:


Case Code : MKTG108 For delivery in electronic format: Rs. 500;
For delivery through courier (within India): Rs. 500 + Rs. 25 for Shipping & Handling Charges


Case Length : 19 Pages
Period : 1976-2005
Pub Date : 2005
Teaching Note : Not Available
Organization : Apple Computer, Inc.
Industry : Computers
Countries : United States of America


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.


• Hybrid channel system, channel functions, and channel integration.

• Exercise of power by a company (channel leader) over the channel members.

• Channel conflict and resolution.


  Page No.
Introduction 1
The Dawn of Apple 1
From Apple to Lisa and Macintosh 2
Exit of Jobs and the Decline of Apple 4
Re-Entry of Jobs 4
The Introduction of iPod 4
The Apple Online Store 5
Apple Goes Retail 6
The Trouble Begins 8
Apple Revises the Terms and Conditions 9
The Conflict Gathers Momentum 10
Consumers and Dealers File a Class Action Lawsuit 11
Conclusion 11
Exhibits 13


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.

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