Kogan CEO's dire warning about Apple

by Chris Jager  |  Tuesday 1 March 2011
Kogan CEO's dire warning about Apple

Russlan Kogan, the controversial CEO of Kogan Technologies, has predicted the death of the Australian retail industry at the hands of Apple within the next few years.

Kogan was speaking at Media Connect Kickstart 2011, where technology journalists and industry members converge to discuss emerging trends in the industry. Not one to mince words, Kogan opened with: “you might not know it yet, but the biggest retailers in Australia are Apple’s bitch.”

Kogan claimed that traditional brick-and-mortar retail stores rely heavily on the sale of Apple products to stay afloat. In 2010, 30% of all JB Hi-Fi’s sales were attributable to Apple products and accessories, Kogan claimed. He believes that when Apple moves its business to an online model, its retail partners such as JB Hi-Fi will be left in the lurch.  

Kogan believes that Apple's products are unique enough to find an audience without the assistance of third-party retailers. "If the iPad has only been available to buy from the Apple iStore, it would have barely affected its sales at all," Kogan said. "...Retailers are relying on the genius of Apple to stay alive."

Kogan believes that Apple will “pull the pin” on traditional retail stores within one or two years. When that happens, many big retail chains will go out of business. He concluded that the future of retail lies in online stores such as eBay, Amazon, the Apple iStore and - surprise surprise - Kogan.

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Comments: 10
cootified
1 March 2011
 I must say, he is correct.
But more importantly, if you are a retailer, you're only option is to adapt or innovate.
You can't just sit there and whinge because someone else thought up of a better process, known these days as an 'ecosystem'

That said, any retailers ambitious enough to try and compete with Apple, they will need to create a new ecosystem, not just a product.


Comment made about the PC & Tech Authority article:
Kogan CEO's dire warning about Apple?
Russlan Kogan, the controversial CEO of Kogan Technologies, has predicted the death of the Australian retail industry at the hands of Apple within the next few years.

What do you think? Join the discussion.
gone4good
1 March 2011
 I think he's correct in that Apple will pull the plug on their traditional retail partners. They are opening more and more Apple Stores so why would they want to compete with themselves?

However I don't agree that it will have a detrimental impact on retail sales. I'd like a response from JB HIFI to confirm this 30% figure. That's very little retail store space given to a big 30% of their retail traffic. At that level you'd think they would become mini Apple Stores. To add the margins on Apple products are quite low compared to other products. There's no doubt it would have a big impact, but no where near as big as Kogan suggests.

They should be more concerned about the continued growth in online sales.
Sid Spart
1 March 2011
 $ony And MS are also doing this with their PSP PS3 And Xbox the get retailers sell their hardware which acts as a Trojan Horse for their Content Gateway Stores riddled with Digital Restrictive Management(DRM).
petermi14
1 March 2011
 I tend to agree that traditional retailers need to seriously rethink their business model. Online sales are going to become more pervasive - the Internet has ensured that the world is now a 'global village' and retailers have to get used to the idea that they ARE competing directly with companies from other countries for our business - not just companies in Australia. So margins and costs will have to be completely re-evaluated (downwards). They will either have to find a competitive model or sink.
moonflower
1 March 2011
 I bought 3 Blu ray multi region players from Kogan. Perfect and excellent price. Had a problem with one...Kogan after sales cannot be beaten. Replaced.
My mate and his missus have just got one. He texted asking where I buy my Blurays in America (Amazon). Bought a parrot cage off ebay, now getting some metal filing cabinets. Kogan boss knows what he is talking about. Going to buy an E reader thingy soon off him.
petergaskin
1 March 2011
 Its all about providing service. And people will still pay for good service on major purchases. So as long as traditional retailers can provide an appropriate level of service and adequate range of products, then they still ahve a good chance of surviving.
After buying a pc from Dell once - will need to be a very good bargain before I take this route again.
looking at going to a local pc store - where i can actually discuss what I think i want - and hopefully they will be able to translate that into want I need.
gone4good
1 March 2011
petergaskin wrote:
looking at going to a local pc store - where i can actually discuss what I think i want - and hopefully they will be able to translate that into want I need.


They are just about extinct here in Newcastle. There are only a couple left where there once was many. It wasn't online retailing that killed them, but the fortnightly computer fairs. Very few local stores could compete against the fair trader from Sydney offering cash prices to offload excess stock.
petergaskin
2 March 2011
 Not all lost in Adelaide - although very little presence of pc makers as reviewed in various pc mags
umbria
2 March 2011
 Big fan of Kogan, BUT - in a customer relations disaster, I pre-ordered a PVR from them last year, after confirming in their FAQs that you could transfer its TRP-formatted MPEG free-to-air recordings off the device for archiving.

Stock was delayed, but when it arrived I spent a week trying to get the file archiving to work. I emailed tech support and was told that the FAQ didn't apply to this model of PVR, which uses a proprietary disk format that does not permit copying single files off.

So I asked for a refund due to the device not having the advertised feature, and was told that change-of-mind refund is not permitted after 7 days. I hadn't changed my mind - the advertised feature was missing!

I jumped through all the Consumer Affairs Victoria hoops but Kogan to date refuse to refund or even credit the item. CAV told me I will have to take them to court - for $299 - which is not practical as I live in NSW.

Kogan - your future will be soured if you drop the ball on excellent customer service. Failure to give model numbers to your PVRs means that I have a right to a refund if a PVR feature described on your FAQs is missing on one of your PVRs.

I will still buy from you in future and even recommend you, but this is not a happy chapter in our dealings. The door is open if you want to contact me. - FY
Slatts
2 March 2011
 That would have to be one of the most friendly on line complaints I've read.

The ball is indeed in your court Mr Kogan...

:)
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