Apple, Retailers Headed For Showdown

Thomas Santos, president of MacAdams Computing, a San Francisco-based Apple retailer, said he and five other Apple retailers are within weeks of possibly being assigned a trial date stemming from a lawsuit they filed in 2003 against Apple. That date could be named on Jan. 25, 2005, Santos said.

Santos claims Apple intentionally withheld adequate inventory from MacAdams and other retailers in order to stock up Apple's own retail outlets and online store. The lawsuit also charges Apple with underpricing its retail partners, denying warranty claims made by certain retailers and poaching customers from retailers, said Santos.

Calls to Jane Rauckhorst, senior manager of Apple Retail Store Media Relations, were not returned.

Santos traces Apple's behavior toward retailers from when the Cupertino, Calif., computer maker opened its online store. "When they first opened up their online stores in 1997 they started holding back popular products to sell online as opposed to through us dealers," said Santos. "Then this tactic became even more pronounced when they began opening their own stores."

According to Santos, approximately 170 independent Apple retailers, representing more than 300 storefronts, received only 1,500 Apple iPods from May to June 2003. During that same period, 32 of Apple's own computer retail outlets received 12,501 iPods for their inventories, with another 15,000 iPods shipping to them 30 days later, said Santos.

Santos said he has the shipping and billing invoices from Apple and its retail stores to support his claims. "Apple has a public Web site, and we managed to get on it and find these billing invoices," he said.

Because of a lack of inventory of Apple's most popular products, business for MacAdams has fallen by about 90 percent, said Santos, who added that Apple has also "de-authorized" MacAdams as an Apple reseller. "They claim we hacked their Web site, which is totally false," said Santos of the reason MacAdams lost its Apple authorization.

As part of his crusade against Apple, Santos runs a Web site that encourages ex-Apple employees, Apple retailers and consumers to act as whistleblowers when encountering unethical behavior by Apple.