Should Apple Bring The iPhone To The Channel?

Apple continues to dominate the mobility market, selling 31.2 million iPhones 5Ss, a record for the June 2013 quarter. However, solutions providers say the company may need to do more in the channel, including making the iPhone available to resellers.

While Apple has a small but significant base of authorized resellers, the company mainly distributes its own products through Apple retail stores. And while some solution providers like En Pointe Technologies are authorized to sell the iPad and Mac products, the iPhone remains off limits.

"We don't sell [Apple's] iPhones because resellers cannot do that; it's only available for service providers such as AT&T and Verizon," said Naveed Khan, director of vendor management at En Pointe Technologies. "We don't do phones and it's a tough market. But if we can [sell the iPhone], we will."

[Related: Apple Partner Faith Remains High Despite Tougher Competition ]

Apple has made channel inroads with its mobility products in the past; the company signed an iPad distribution agreement with Tech Data in 2010. The partnership helped push Tech Data's tablet sales to $1 billion in 2011, and the distributor said last year that Apple now accounts for more than 10 percent of Tech Data's quarterly revenue.

But, currently Apple restricts the sale of iPhones to third-party wireless carriers like AT&T and Verizon; not even larger national resellers like CDW are authorized to sell the ultra-popular smartphone. Will the iPhone be the next mobile device Apple brings to the channel? Some solution providers certainly hope so, and they believe iPhone partnerships could be mutually beneficial.

Steven Kantorowitz, managing director of mobility at Jericho, N.Y.-based Breakthrough Technology Group, said that while there's strong worldwide demand for Apple products, it will slow down unless the market is opened up more to partners, which can help create additional demand for products like the iPhone.

"At the end of the day, it's the partners that are basically selling [Apple's] products, and if partners are not pushing or talking about it, eventually the buzz is not going to be there anymore," Kantorowitz said.

However, Mike Carper, founder and senior advisor of Signature Mac, said allowing partners to resell the iPhone wouldn't have much of an impact on Apple's ability to compete against the likes of Samsung and other Android smartphone makers.

"Apple has a huge following," said Carper. "People that know Apple products ... are loyal to the Apple product, and they are going to buy the new Apple product."

NEXT: Apple Making Progress With Channel

According to En Pointe Technologies' Khan, Apple has made some improvement in the channel this year. For example, he said, the company is inviting partners to its headquarters in Cupertino, Calif., and giving them more insight into product reselling opportunities and special offers.

"So far this year I see the progress," said Khan. "They are making improvements, but there is more room to improve to capture more market. HP, Lenovo and Dell have already mastered this area while Apple is more new to this."

One area of concern for En Pointe is the education market; Apple's current policy involves selling directly to the education market, said Khan. "We cannot sell to education. We want to but cannot," said Khan. "We have a large education customer base, and a big thing for Apple would be to have a selective channel for the education market. It would be a huge deal for us."

Although Apple seems to have progressed slightly in the channel, Breakthrough Technology Group's Kantorowitz said the company needs to realize that partners are able to help sell devices instead of neglecting them.

"If partners don't feel like they are going to make a living off selling the devices," Kantorowitz said, "then they will think they are going to make a lot more selling something else as equally as good."

PUBLISHED OCT. 22, 2013